| Releases
& Statements
For Release: Tuesday, November 21, 2006
Contact: Frank Sobrino,
Press Secretary
O: (212) 669-4193
Statement
of Public Advocate Betsy Gotbaum for
City Council Hearing on No-Bid Contracts
Thank you Chairman Jackson
for holding this important hearing, and giving me the opportunity
to make a statement this morning.
Since 2002, I’ve
watched the Department of Education give away an estimated $270
million in taxpayer dollars by skirting the competitive bidding
process. In 2001, before Mayor Bloomberg took over the school
system, the Board of Education awarded eight no-bid contracts
worth over $1.3 million; by 2002, the new Department of Education
had awarded 32 no-bid contracts worth nearly $12 million, a 300%
increase in total contracts and a 787% increase in their dollar
amount.
Each step of the way,
I’ve called on Mayor Bloomberg and Chancellor Klein to justify
their out-of-control spending. The parents and educators of our
city’s 1.1 million students deserve to know how the DOE
spends its money.
Yet time after time,
the DOE doles out millions of dollars in secret, most recently
to the corporate “turnaround” firm Alvarez and Marsal.
It is clear that the DOE didn’t do its homework before going
ahead with this $17 million, no-bid giveaway. In fact, Chancellor
Klein himself said that he didn’t even know about the firm’s
work in other cities.
Even a cursory check
of Alvarez and Marsal’s track record in St. Louis would
have been enough to raise suspicions. In St. Louis, Alvarez and
Marsal was called in to improve the school district, and left
it in shambles.
Mayor Bloomberg and
Chancellor Klein have both claimed there's a $200 million savings
at stake in restructuring the Department of Education's financial
operations. And the Chancellor has claimed that Alvarez and Marsal’s
work has produced savings that sent almost $50 million to our
schools.
Where are these mystery
“savings” that the Chancellor is touting so highly?
The DOE has slashed its budget and cut back on custodians, drug
education programs, and school bus service. It seems to me that
if Alvarez and Marsal was hired to save money for the Department
that we should be seeing an increase in services to the schools,
not a dramatic reduction.
And where is the accountability?
What process, internal or external, holds the DOE responsible
for its wild spending? Are we really going to sit by idly as the
Department continues to award no-bid contracts without consulting
its stakeholders – our students, parents, and educators?
The DOE should not be granted any special exemption from the competitive
bidding process that all city agencies are required to follow.
After looking at the Department’s history, it’s clear
that we can’t trust them to act on their own.
A competitive bidding
process assures parents that the Department of Education isn’t
wasting money that could be put to better use in the classrooms.
We must stop throwing taxpayer dollars out the window with secretive
no-bid contracts.
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