The Bleeding Has Started - Legacy Replacement Project - $85.0M - Accenture

Legacy Replacement Project - $85,076,693 – Accenture

On February 26, 2021 NYCERS finally awarded the Legacy Replacement Project (LRP) contract to Accenture. The cost of the contract is $85,076,693. The LRP is supposed to be a five-year project. It was first proposed in the spring of 2015.

I have been writing about the LRP for the last six years. My first post was in 2015. My most recent post was in 2020. This boondoggle started in the spring of 2015 and has been dragging along ever since. Thank god the legacy systems built by civil servants have lasted over 40 years.

On of April 8, 2021, in support of the LRP project , the trustees adopted a massive increase in the NYCERS FY-2022 admin budget. The amount approved was $136.0M. As contrast, the budget in FY-2015 was $55.0M. This is at the same time as the mayor is cutting the medicare benefits of NYC retirees.

I have no hope that this lunacy will stop. After a six year delay in the start of this project, the trustees at the board meeting were thanking Liz Reyes for her great work on the project. What can you expect from people who are brain dead.

Accenture LRP Contract

The initial work, Phase 0, is a ten-week effort by Accenture to analyze its contract plans and possibly propose changes but with no cost increases. This phase may be longer than ten weeks. At the end of this phase either side can opt out of the contract without penalty or cost.

The second part of the contract, Phase 1, is scheduled to start July 1, 2021 and end December 31, 2021. The five-year term of the contract gives us an end date of June 30, 2026. I wonder who will be in the White House then.

Other Contracts Linked to the LRP Project

1. NYCERS has paid Gartner, the consulting firm, $7.1M since FY-2015.
2. Risk advisor to the Board of Trustees. The contract was awarded to Linea Solutions, Inc. on 7/21/2020 at a cost = $4,598,496 with a period of five years.
   • Will need to be place until 6/30/2026.
3. Quality Assurance advisor (projected award date - April 30, 2021) to NYCERS staff for the project. Contract being negotiated. Cost unknown. Period five years.
   • Will need to be in place until 6/30/2026.
4. Mainframe maintenance for five years while the LRP is being implemented. Contract awarded on 2/11/2019 to Blue Hill Data Services. Cost = $3,894,000. Period of five years.
   • Will need to be place until 6/30/2026.
5. FileNet maintenance for five years while LRP is being implemented. Open RFP issued on 11/7/2019. Cost unknown.
   • Will need to be place until 6/30/2026.
   • NYCERS has allowed this system run out of support both from Microsoft and IBM.
6. Roughly 30 computer consultant contracts, each averaging $150,000 per year. Yearly cost of $4.5M
7. Office reconfiguration in FY-2020 that cost $3,448,080.
   • In FY-2000 NYCERS moved into 133,000 sq. feet of totally brand-new class A office space. It was the most modern office space in the NYC government. It rivaled anything in the private sector. God help us what they have done to that office.
8. Customer Relationship Management (CRM) software. Contract was awarded to Accenture, the same firm with the LRP contract, on 8/8/2018
   • at a cost = $14,832,123, with two modifications:
   • $654,000 as of 6/1/2020, and
   • $138,780 as of 12/24/2020.
9. In FY-2019 and FY-2020 NYCERS paid Accenture $11,575,713, and $4,381,360 to a third-party firm for licenses & support as part of the CRM project.
   • Not sure what the value of the CRM is to the NYCERS membership.
10. A replacement IVR system contract was awarded on 12/29/2020 to Genesys Telecommunication Labs. Cost = $712,885.
    • The first phase of this system is promised to be in place by 4/30/2021. It will entail switching over from in-house Avaya interactive voice response (IVR) system to a cloud-based phone system integrated with the CRM system. At this point Genesys will not have an IVR in place.
    • Phase 2 does not yet have a timeline, scope of work, or I suspect a price tag. It is not clear whether Phase 2 is covered by the initial cost figure.
    • Phase 2 is the part where Genesys will create the new IVR system. Sounds like Avaya needs to stay in place until after Phase 2 is completed.
    • I do not see how this will solve the call center chaos that exists at NYCERS. In spite of the obvious, there is no word of increasing the call center staff.
11. At the Dec 10, 2020 board meeting the Trustees adopted a resolution approving the ten-year LRP project at a cost of $279.0M.
    • Not sure what value this has except to warn everyone that a tsunami is coming.

History: NYCERS Administrative Expenses 2000 - 2020

The following is a chart of NYCERS administrative expenses from 2000. The information comes from NYCERS Comprehensive Annual Financial Report. As a point of reference NYCERS had an annual budget of $8.8M in FY-1996, the last year NYCERS was part of the city budget.

NYCERS Admin Expenses

Fiscal Year	Personnel Expenses	Contracts & Consultants	Phone, Mail, & Printing	Rentals	Software, Hardware, Support, Supplies, & Maintenance	Depreciation & Credits	Total
FY-2020	$45,736,806	$11,337,750	$1,173,896	$6,870,614	$12.548,240	$0	$77,667,306
FY-2019	$43,717,712	$15,884,418	$1,114,263	$6,637,959	$14,719,873	$0	$82,073,325
FY-2018	$40,444,145	$4,310,427	$1,072,077	$6,348,888	$7,513,233	$0	$59,688,770
FY-2017	$39,505,894	$3,829,758	$1,561,282	$5,909,352	$8,864,342	$0	$59,670,628
FY-2016	$37,950,289	$4,687,929	$1,360,397	$5,453,383	$7,230,989	$0	$56,682,988
FY-2015	$37,368,409	$3,652,,154	$1,336,002	$5,037,893	$7,239,560	$0	$54,635,018
FY-2014	$33,571,938	$3,773,082	$1,269,387	$4,863,720	$6,952,691	$0	$50,430,818
FY-2013	$33,064,087	$3,102,385	$1,078,411	$4,674,442	$6,797,095	$0	$48,666,420
FY-2012	$32,623,085	$3,088,256	$1,096,186	$4,796,584	$9,780,637	$0	$51,384,748
FY-2011	$31,748,443	$4,108,186	$995,415	$4,741,621	$4,780,811	$0	$46,374,476
FY-2010	$31,527,659	$5,434,495	$1,041,471	$4,278,903	$6,678,071	$715,000	$49,675,599
FY-2009	$30,187,604	$4,043,775	$914,311	$4,047,949	$8,198,354	$1,430,000	$48,821,993
FY-2008	$28,344,427	$6,401,744	$997,316	$4,138,211	$6,687,716	$1,430,000	$46,999,000
FY-2007	$27,123,219	$2,677,793	$1,055,233	$5,203,902	$4,205,095	$1,430,000	$41,695,242
FY-2006	$24,992,543	$3,124,688	$1,497,895	$4,797,895	$4,472,246	$1,406,132	$40,291,469
FY-2005	$24,474,710	$3,039,970	$827,277	$4,454,258	$3,118,356	$1,392,296	$37,306,867
FY-2004	$22,631,504	$3,124,800	$845,391	$4,192,543	$3,375,187	$1,430,000	$35,559,081
FY-2000	$15,990,745	$1,587,290	$718,686	$1,531,536	$2,691,719	$725,000	$23,244,976

So, With an Unlimited Budget, I Guess Five Months is Good Enough for an Option Letter.

In December 2019, I wrote a complaint about how NYCERS was taking six or more months to produce final benefit letters for newly retired members.

At the March 11, 2021 Board of Trustees meeting, the "Chief Operations Officer" reported to the trustees that NYCERS was now getting the benefit letters out in five months and had met its goal. She also asked if she could stop reporting to the trustees about the benefit letters as long as she was meeting the five-month goal. The trustees agreed to the request.

I am sorely tempted to call the trustees stupid but that is not accurate. The decision they agreed to was stupid just like paying $245M/yr for bad investment advice.

First of all, five months is a poor goal. The traditional goal is three months. Second, they now have no way of knowing whether this goal is being maintained. Third, this is the key monthly production figure for NYCERS along with the number of loans issued each week. It should be the highlight of the executive director's monthly report to the trustees.

Note: There is no civil service title at NYCERS for chief operations officer. In fact the legal civil service title is deputy executive director and there is another person in that position. That person is legally responsible for the functions being assigned to the "COO". I suspect, however, that person is on her way out. Here we have the Dilbert Principle in full bloom.