Poor contract management costs the City of New Orleans $4 million on a single project

150px-no_crime_camera1Don’t you love a scandal?  This month, it is the turn of the City of New Orleans Office of Technology, who according to the New Orleans Inspector General, may have been criminally negligent in the management of contracts in relation to a recent city-wide initiative to place 1,000 CCTV cameras in an effort to prevent crime on the streets of New Orleans.

 A recent investigation conducted by the Inspector General found that the City of New Orleans Office of Technology “did not exercise effective contract oversight” in the administration and management of the City’s ‘Crime Camera’ project.

As a result of poor supplier contract management, the City of New Orleans has paid $4 million over its initial budget and has only managed to deploy 240 out of a planned 1,000 security cameras throughout the city.

City of New Orleans Council representative, Stacey Head says:  “We have a huge Contract Management problem in this city … and need to change the process”

Technology has a significant role to play in Contract Management.  Effective management of contract milestones or obligations should be something that an organisation should be able to take for granted with the assistance of Contract Lifecycle Management software. 

The City of New Orleans has shown that without proper processes and systems in place to manage contracts an organisation can leave itself exposed to huge cost overruns, penalties and undue risk.  The return on investment on the implementation of a comprehensive Contract Lifecycle Management solution in this case would have been enormous.  I suspect that the City of New Orleans are not alone.


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