GOSHEN – State Senator James Skoufis today laid out the details of an intricate no-bid contract scheme he claims was orchestrated by County Human Resource Commissioner Langdon Chapman to enrich his family and others. At the center of the alleged arrangement is an information technology consulting contract with StarCIO whose owner, Isaac Sacolick, is Chapman’s brother-in-law.
Chapman is an attorney by profession and until 1 1/2 years ago, he served as county attorney.
Skoufis alleges that by skirting bid requirements, Chapman funneled hundreds of thousands of dollars of ill-gotten gains to his family. The Senator alleges he quietly renewed and expanded contracts, violated the law by ignoring bidding requirements, fabricated a justification to extend the contract, and stalled to ensure the permanent position was not filled.
According to documents released by the county, Sacolick’s firm, which began its contract in January 2023, has been paid to date a total of $432,640 this year. The company was issued contracts and purchase orders totaling $822,900 to provide fractional chief information officer (CIO) and project management services.
Last Monday, following the discovery of the familial relationship between Sacolick and Chapman, three county legislators led by Genesis Ramos of Newburgh requested information from County Executive Steve Neuhaus on the arrangement including copies of contracts and invoices. County Attorney Richard Golden responded to the request on Friday afternoon.
According to Golden’s reply, the procurement of the contract with StarCIO was fully compliant with county and state laws and a bid was not required. Golden says the original contract and subsequent extensions, regardless of their amount or scope, were fully compliant with the law. As to the personal relationship between Chapman and Sacolick, Golden said the county’s hiring of even close relatives is not prohibited.
In his 2024 budget proposal released in September, Neuhaus recommended the creation of a dedicated county IT department. Legislator Ramos said the contract with StarCIO is unjustifiable, pointing out that the budget request for the full-time position is $125,000 per year.
The quotes
According to the county, three quotes must be obtained to procure a contract for professional services.
Gartner, Inc., an information technology firm based in Stamford, Connecticut was one of the firms that quoted CIO services. According to the company website, Gartner serves a client base of more than 12,000 organizations in over 100 countries with a global workforce is more than 15,000. Skoufis said the document provided by the county was not a quote, but a generic price sheet that he was able to print offline.
The second quote was from Securance Consulting of Tampa, Florida. Securance is a smaller information technology firm of around 30 employees and once again, Skoufis alleged the document provided was a publicly available generic price sheet, and not a quote.
The third quote was from StarCIO of Westchester County. StarCIO quoted $32,500 per month and the company’s website lists no employees other than Sacolick. Skoufis says the document provided by StarCIO to the county was a detailed proposal.
Skoufis, who also serves as the chairman of the State Investigations and Government Operations Committee in the Senate, said he did some research on the quotes. He had investigators contact Securance and Gartner.
Securance indicated they first met with Sacolick and Samantha Sweikata, commissioner of General Services in August, more than eight months after the first contract began.
Representatives from Gartner told Skoufis’ investigators that they never met with or spoke with anyone from Orange County.
Both Gartner and Securance are GSA-approved vendors, and Skoufis says StarCIO is not. Skoufis said the county’s selection of the significantly higher-cost proposal was unjustifiable given the other two vendors are government-authorized providers. He said that both competing quotes were secured months after the contract with StarCIO was inked.
Golden’s letter did not provide a justification as to why StarCIO was selected but did indicate that Chapman had nothing to do with the selection of the firm or overseeing the agreement.
The first contract
The first contract with StarCIO was executed in January of 2023 for $65,000. This contract was for eight days of onsite work and 64 hours of offsite work over a two-month period. At a rate of $507 per hour, Sacolick was to perform “fractional CIO services on an interim and transitional basis.” The contract offered additional service hours at a cost of $5,000 per eight-hour day.
According to Skoufis, this first contract was renewed five times and is slated to run through January 14, 2024, at a total cost of $260,000. The contract was for advisory services only, and no computer hardware or software was included in this agreement. This contract was signed by Harold Porr, deputy county executive on January 17, 2023.
The second contract
The second contract with StarCIO was executed in July of 2023 for Project Management Network Architecture and runs concurrently with the first contract. Under this agreement, StarCIO brought in Blaine Munro as the principal employee to serve as project manager. The arrangement requires Sacolick to provide general oversight.
The agreement, with an initial term was six months, required Munro to work up to three days per week onsite and allowed for two days of offsite, for a maximum of 40 hours per week. No work requirements for Sacolick were outlined.
The total amount owed by the county for services for the first six months was $218,400, with the renewal term also costing $218,400. The contract also has an automatic renewal feature that obligates the county to a new term if the agreement isn’t canceled at least 60 days before the end of service. No computer hardware or software was part of this agreement.
Skoufis took specific issue with the second contract because he says the total contract amount of $608,400 well surpassed the $99,999 no-bid threshold. This contract was signed by Alicia D’Amico, county director of Operations, on July 13, 2023.
The third contract
The third contract with StarCIO was executed approximately one month after the second agreement and was for project management of the Agile Transformation Program. This contract runs concurrently with the first and second arrangements. Under this agreement, StarCIO brought in Malissa Clingman as the project manager with Sacolick providing project oversight. Contractually, Sacolick had to meet with Clingman at least once per week.
Under this arrangement, Clingman works up to three days per week onsite and two days offsite, totaling up to 40 hours per week. Once again, no specific work requirements for Sacolick, aside from his once-per-week meeting with Clingman, were specified.
The agreement, which was also six months in duration and had an auto-renewal clause, cost the County $208,000 for the initial term, and another $208,000 for the renewal term.
Once again, Skoufis took issue with the third contract for exceeding the no-bid threshold. The third contact is listed on county documents totaling $816,400 and was signed on August 31, 2023, by County Executive Steve Neuhaus.
Orange County’s continuity exemption
A procurement rule, County Attorney Rick Golden says, was used in the procurement of the various contracts was County Procurement Policy Part x.C.1.n. This rule permits the Department of General Services (DGS) to request a continuity exemption for vendor services.
In July, the department requested a continuation exemption stating that the contract “assures the prudent and economical use of public money in the best interests of the taxpayers.” The justification also noted that continuing the arrangement with StarCIO was justified because it “guards against favoritism, improvidence, extravagance, fraud and/or corruption.”
The exemption request also indicated the continuation was necessary to support public safety programs, which seems inconsistent with statements made by Orange County District Attorney David Hoovler at an October 19th public safety committee meeting when IT system transition was discussed.
When asked by Legislator Ramos about the progress on his division’s record management system, and the relationship with the county’s interim CIO, Hoovler said the project was behind schedule.
“The project is at least a year behind, and it has hindered us tremendously,” said Hoovler. He reported that he does not deal on a regular basis with IT and that the department was comprised of “all contractors.” He concluded by stating, “We are at least a year behind and it is killing us, killing us.”
Earlier this year, county officials granted the exemption. Skoufis held that the continuation of the contract was a violation of policy and the law because the total contract far exceeded the no-bid threshold.
StarCIO
Sacolick’s biography on StarCIO’s website lists his experience as having served as a chief technology officer in startups and a chief information officer in transforming organizations. His biography says he has written books, authored more than 800 research and whitepapers, and speaks at more than 50 events annually on technology-related topics. StarCIO has been in business since 2006.
Skoufis charged the contract is really with Sacolick himself, not his firm, calling into question the legitimacy of StarCIO. According to contract documents, the company listed its address as 2005 Palmer Avenue #1082, Larchmont, NY 10583. Skoufis revealed this is not a corporate headquarters for the firm, but rather a PQM mailbox and shipping store located in a strip mall.
Other documents list 9 Stewart Avenue in Tuckahoe as the company’s address. Westchester County property tax records indicate that is Sacolick’s home.
Skoufis also called into question the firm’s registration with the Department of State. He says the firm’s corporate registration has been expired since 2008.
The alleged motive
According to Skoufis, the home Sacolick owns at 9 Stewart Avenue entered foreclosure earlier this year, shortly after he began his first contract with the county. Skoufis alleges Sacolick had personal financial problems and the low-show, high-compensation contracts were awarded to him at a time when he needed funds the most.
Alleged delays and omissions
Skoufis charges that the initial contract for $65,000 was “artificially low” to avoid triggering a bid process. He believes that it was planned from the beginning that the contract would rapidly expand after being first introduced at a low amount that wouldn’t raise any flags.
Skoufis said Chapman played an influential role in the rapid growth of his brother-in-law’s technology contract. Skoufis pointed out that Chapman, as the Human Resources commissioner, would have been the individual tasked with finding a replacement for Sacolick. Skoufis says Chapman was incentivized not to fill the job because each day that passed was another Sacolick was paid for additional services.
Legislator Mike Anagnostakis said that at a recent Ways and Means Committee meeting he asked about the CIO position. He said county officials intentionally kept legislators in the dark about Sacolick’s contract and didn’t mention the county was in contract with a fractional CIO. “To me, that means there are other people involved,” remarked Anagonstakis.
Golden, in his letter to the legislature, indicated Chapman had nothing to do with the contract procurement and in fact, Chapman did not sign any of the contract documents or approvals. The county’s contract form has a place for the Human Resources Commissioner to sign for approval, which was left blank on all three contract documents.
A call for further investigation
County Legislator Michael Paduch called on Republicans who control the legislature to convene the body and vote to remove Chapman from his role if he doesn’t immediately resign. Paduch also called for an oversight hearing so legislators can question commissioners under oath.
Legislator Laurie Tautel said the contract should be immediately canceled because it is in direct violation of public procurement policy.
Legislator Mike Anagnostakis added that Chapman has job protection in the form of a six-year term of office as per state law, unlike other commissioners. He transitioned from county attorney to HR commissioner about 1 1/2 years ago.
Skoufis said that in the coming days, he would be making a formal request for a criminal investigation into the matter. When asked to whom the request would be sent, he said he would be reaching out to the State Attorney General, the FBI, and Orange County District Attorney’s office.
“Every single county legislator and the county executive after today needs to make a decision,” said Skoufis. “Are you on the side of taxpayers, or are you on the side of Langdon Chapman? The fact is you can’t be on both sides.”
Orange County officials were not immediately available for comment.
