Government of the State of New York (CityTime)

In July, 2011 the mayor of New York Michael Bloomberg demanded from Science Applications International Corporation (SAIC) system integrator to compensate more than $600 million received by the company for implementation of the program CityTime project – the system of salary accrual by the municipal employee.

In the letter to the CEO of SAIC Walter Havensteyn (Walter Havenstein) Bloomberg noted: "The city, in project implementation of CityTime in reasonable time and within the budget corresponding to the size of a system and its complexity relied on integrity of SAIC as one of leading companies of the country regarding software technologies".

CityTime was started in 2003, with the budget of $63 million, but its cost considerably grew since the moment as the project rose – within nearly ten years.

Recent charge of the project manager from SAIC, Gerard Denault and also the criminal charge brought in the relation of the SAIC system engineer Carl Bell who developed the software and recognition of his fault "are extremely disturbing, bring up questions of the corporate liability of SAIC, need of internal control on prevention of leaks and fight against fraud", - Bloomberg added. Denault and Bell charges of bribes, fraud and money muling are brought.

Besides, charges were brought to Redi Allen and Padma Allen recently – the married couple heading the company - TechnoDyne system integrator - the main subcontractor of SAICV the CityTime project. The federal authorities claim that they of Alyona together with other participants developed the scheme of rollbacks which is taking away millions of dollars from the project.

The federal authorities also claimed that SAIC received disturbing messages of informers about a project status in 2005, Bloomberg in the letter said: "It is unclear what was done by SAIC at that time for investigation of such serious charges". Though New York and "received a working system which will improve our managerial opportunities..., because of the fact that the project, apparently, is soiled by fraud and schemes of rollback the city should not be damaged", - the mayor added. SAIC should return about $600 million and also provide means for "payment of investigation and mitigation of consequences of this question", - he wrote.

Irrespective of the mayor on Wednesday the statement was made by the inspector John Liu saying concerning the agreement with Bloomberg's office that the contract with SAIC is stopped. The agreement orders "gradual transfer of system management from external consultants to city employees to save more than $20 million a year".

Bloomberg and Liu exercise joint control over the city agency of services of financial information (FISA) managing the CityTime project. Liu is considered as the potential applicant for elections of the mayor in 2013 and in public criticism of management of Bloomberg of city finance refers to CityTime problems.

In turn SAIC stated that it "understands and shares the indignation expressed by the city concerning expected fraud from former employees and subcontractors of the CityTime program. These actions are infringement of everything what we support as the company". It is said in the statement distributed by e-mail on Thursday.

The company also "is ready to discuss the acceptable solution of this question, considering scope of expected fraud and that fact that SAIC delivered a system of which the city spoke this week as working well", said in the statement.

According to analysts, the city should use all legal levers to return the spent money, however according to them the project suffers from ambiguity of the administrative responsibility which can interfere with establishment of a clear boundary of responsibility legal. Also it makes sense to review requirements of the main project: whether it is necessary in the present form and that it is necessary to make to move forward unlike continuation of development of the former project, Michael Krigsman, the CEO of consulting company Asuret spoke of a situation.