The District has failed to pay its technology vendors on time for three consecutive pay periods, leaving dozens of subcontractors on the hook for millions of dollars in salaries and other financial commitments.
David Umansky, spokesman for the D.C. Office of the Chief Financial Officer, told The Examiner on Monday that payment has been delayed because there is a “discrepancy” between purchase orders for tech work and the amount billed. The invoices amount to millions of dollars.
“We are questioning those,” Umansky said.
He was unable to provide further details, except that the issue stems from invoices filed for work in the Office of the Chief Technology Officer. OCTO was rocked earlier this year by a bribery scandal involving kickbacks and pay to nonexistent employees.
The District retains temporary IT workers through the year-old, $75 million Information Technology Staff Augmentation program. Through ITSA, prime contractor Optimal Solutions and Technologies hires and pays vendors at capped rates — saving millions of dollars, accelerating the hiring process and freeing the city’s procurement staff to work on other projects.
But if OST does not receive timely payment from the District, the firm claims, it cannot pay for the work performed. Such has been the case at least four timessince November 2008, according to documents obtained by The Examiner.
“Unfortunately, payment delays continue to occur, and these issues have been escalated within the District’s finance area for resolution and for process improvements to mitigate any future delays,” OST project manager Brian Cole wrote in a Nov. 25 e-mail to vendors.
In May, the actual vendor pay date was four days later than the scheduled date. October and November were four and five days late, respectively. And the scheduled Nov. 28 pay date remained outstanding on Monday.
Vendors, meanwhile, must still must pay their employees on time even if the business is not collecting from OST.
“It absolutely hurts us because we’re paying our employees every two weeks; we’re paying their workmen’s comp, their insurance and their taxes, and we expect to be paid,” said Laurie Collins, owner of D.C.-based LC Systems.
ITSA was the brainchild of former District Chief Technology Officer Vivek Kundra, who is now the federal chief information officer at the White House.
Promises of ITSA
» 95 percent of awards filled by D.C.-based businesses
» $10 million annual savings on IT staff costs
» Improved transparency
