NYC Scrutinizes eProcurement Deal With Ivalua

New York City Comptroller Scott Stringer is scrutinizing the city’s $47 million contract with Ivalua to develop an eProcurement system after a previous report uncovered surging costs and delays in the initiative.

Reports in the New York Daily News on Thursday (June 6) said Stringer issued a statement about the overcharges.

“This raises red flags,” he said. “Private companies cannot be allowed to overcharge taxpayers and under-deliver services.”

The comptroller’s remarks followed previous Daily News reports this week that found Ivalua’s project with New York City’s Department of Information Technology and Telecommunications, which began in 2016, started out as a $30.5 million initiative to connect 40 city government agencies to procure online. Since then, however, costs have increased to $47 million, according to report.

The financial details of the project were first uncovered by watchdog Checks and Balances Project, which also found that a similar project for Dallas, Texas cost the city under $50,000 a year. New York City has so far spent $27.5 million on its deal with Ivalua.

“It appears New York City taxpayers were ripped off,” said Checks and Balances Project Executive Director Scott Peterson in a statement.

The publication noted that Ivalua reportedly had no prior experience in the public sector.

“Our office scrutinizes and asks touch questions in concerning situations like this to protect taxpayer dollars and the public interest,” Stringer added in his statement. “We are determining which of the tools at our disposal will best help get answers for New Yorkers and ensure accountability.”

In another statement, The Mayor’s Office of Contract Services, which is now in control of the contract with Ivalua, said it would not be appropriate to compare the contract with that of the city of Dallas, describing the comparison “like comparing na aircraft carrier to a canoe.”

Ivalua raised $60 million in funding last month, propelling the company to a valuation of more than $1 billion. Tiger Global Management and Ardian Growth led the equity round in the company.