The District’s new technology chief is restructuring the city government’s high-priced data and telecommunications system, laying off contractors and senior managers to try to get costs under control.
Upon joining the government in May, Chief Technology Officer Vivek Kundra immediately focused on DC-NET as a “financial problem,” he said Monday. The District-owned voice, data and video system should be self-sustaining, he said, financed by the agencies that use it.
Instead, it was bleeding money.
Working with finance officers and an independent auditor, Kundra said he quickly found the system was being run solely by outside contractors, 96 of them, at a cost of more than $3 million a year.
“My first impression was that from a financial perspective, we were spending way too much money where we didn’t need to, but there’s a better way, an innovating path,” Kundra said.
Kundra said he has since laid off 36 contractors and converted 34 to full-time employees in the Office of the Chief Technology Office. Among those fired were “some of the senior management that I thought had made some of the decisions that did not make any sense.” All told, he said, the move will save the District $263,000 a month and help DC-NET break even by the end of the year.
“We need to run a lean operation to make sure we’re not pumping money into this,” he said.
The $100 million DC-NET was designed to link every government facility to reliable, redundant voice, data and video service on a fiber-optic network of virtually unlimited bandwidth. Former Chief Technology Officer Suzanne Peck pledged cost savings upward of $10 million a year over what the city paid Verizon for similar services.
As DC-NET has expanded, however, the price of telephone service for the District has gone up, climbing from roughly $24 million in fiscal 2004 to an estimated $32.5 million in fiscal 2008.
While keying on the financial side, Kundra said he has not made any major moves to change the technology or “do anything to disrupt critical government services.”
Many D.C. employees have complained of DC-NET’s shoddy, inconsistent service since it was introduced in 1999.
The end of DC-NET?
» Rumors abound that D.C. leaders want out of the phone business.
» A technology spokeswoman says there’s “no truth” to the rumors.
» The technology office added 51 schools to DC-NET this year.
