Is a New IT System Worth $487M?

In the spring of 2015, NYCERS initiated a five year project (LRP) to modernize its IT systems. It was supposed to cost $132M and take five years.

It is now 2023, and the first phase of the replacement project is still in test. NYCERS has already budgeted $329M as of FY-2024 for the project and is projecting another $158M as of FY-2027, the new end date for the project. That adds up to a total of $487M. NYCERS unfortunately has a track record of underestimating future costs. So we should expect a higher total cost assumimg completion of the project.

The NYCERS budget was $55.2M in FY-2015. If you project a 3% increase every year, the FY-2024 budget would be $72.0M. The actual budget for FY-2024 is $165.9M.

In 2014, the City experienced a runaway IT project, CityTime. You can read the DOI report on the NYC.gov website. Just search for "CityTime" on the website. The LRP project is starting to look a lot like the CityTime project. There is no evidence of corruption but there is a lot to support a conclusion of gross incompetence.