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DOT Questioned Over Consulting Firm's Price Tag

Posted December 11, 2007

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— The Department of Transportation paid $3.6 million for a report to improve the agency's efficiency and accountability. Agency leaders were questioned Tuesday over why so much money was spent when less expensive options were available.

"We felt with the changes within the department that they [McKinsey & Company] were clearly the most qualified," DOT Secretary Lyndo Tippett said.

Tippett explained the selection process for the management consulting firm to a legislative oversight committee. He said the first phase of the project came down to three firms: Booz Allen Hamilton's bid of $145,000, Mercer Management's price tag of $495,000 and McKinsey & Company's proposal of $1.1 million.

In April, the DOT picked McKinsey & Company. A second phase of the report brought the total paid by taxpayers to $3.6 million.

"There's a lot riding on this so the pressure should be felt by everybody that has their fingerprint on it," State Rep. Ty Harrell, D-Wake said. "The contract information itself with DOT was kinda kept quiet. It wasn't open."

Harrell is among those asking questions about the report and demanding results.

"I want to make certain the dollars that are being spent are definitely being spent wisely," he said.

Sen. Richard Stevens, R-Wake, also has a lot questions, but at this point is not second-guessing the DOT's decision.

"What I don't know is what those firms were gonna do for their fees. It's very difficult to hire a consulting firm just based on a fee," Stevens said.

The 472 page report, released last month, was based in part on confidential interviews and surveys of nearly 9,000 DOT employees and interviews with state leaders.

Workers complained about low morale and a lack of vision. The agency was also accused of having a lack of accountability and being "too political."

The report found that the DOT's structure prevents some divisions from working well with each other and that the agency does not do a good job of recruiting new workers or keeping the good ones.

Employees also said they were dissatisfied with low pay and outdated technology.

Among the recommendations are that the DOT increase accountability and streamline projects. McKinsey employees are to work with the DOT over the next year and half to try and  make the agency more efficient.

40 Comments

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  • HadEnough Dec 13, 2007

    It's diaper parties. These people are morally corrupt. Someone needs to tail them and expose this.

  • Panther Dec 12, 2007

    SEANKELLY 15
    good point, as mothermac said " just want to know what Lyndo Tippett has on our great "Gov". No one else with his job performance would be allowed to stay!" sounds like he also has a good point.

  • mothermac Dec 12, 2007

    I just want to know what Lyndo Tippett has on our great "Gov". No one else with his job performance would be allowed to stay!

  • The Fox Dec 12, 2007

    "We will not be oversold." Love, Lyndo
    Do the Lyndo, do the Lyndo..

  • papa jim Dec 12, 2007

    lyndo tippet needs to be fired and arrested for being a crook

  • seankelly15 Dec 12, 2007

    Panther - I accept your analysis, but here is the problem. The consultant was hired when the I-40 debacle was identified. The senior managment at NCDOT should have been asked to resign along with the folks reporting to them. But, the Director's solution was to commission a report. Second, I agree that you get what you pay for, but at 1.1 million the amount was over twice the lowest bid and a quarter of a million higher than the next bidder - and then price ballooned to three times the original bid. If further analysis was needed, then ask the consultant to perform the work for the 300,000 above the next highest bid, or open the process for another bid. You cannot hire someone at an agreed upon price, seek approval for that appropriation and then, without any oversight, add two million to the price tag.

  • Z Man Dec 12, 2007

    I have to ask just what are the leaders in the DOT being paid to do?. Whose job is it to ensure things run smoothly, departments communicate well, and things get done efficiently? In effect, we are paying these bozos a salary to hire some firm to do their job!

    Man I want a job like that!

  • Panther Dec 12, 2007

    The 3.6 million spent to see what the problems are could be the best money spent. Let me explain. All too often in government officials do not know where to start when it comes to fixing a problem. This is why a consultant is called it .It depends on how in depth the investigation is. A shallow investigation will cost less but not revival the real problems. Remember, you get what you pay for!!! Officials are very cautious knowing the public is watching their every move. They move so slow in one area and the bigger problems overwhelm them. It’s best to get an in depth study done and revamp the whole department. One thing is for sure, our governor will not make the necessary changes because it shows that he was part of the problem. We will most likely have to wait for a new governor.

  • CherryDarling Dec 12, 2007

    "...why so much money was spent when less expensive options were available."

    Because the DOT is used to spending and not having to be accountable at all for what they do and/or spend.

  • WRAL is joe_dirt Dec 12, 2007

    Since government and their agencies such as the NCDOT are not classified as a "business" there is no incentive to increase efficiency, improve operations or orient in the direction of aprofit margin. It's easy to spend other people's money with no formal direction. Is no one watching the watchers?

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