WRAL Investigates

Senator: N.C.'s private consulting contracts 'very expensive'

Posted June 1, 2010
Updated June 3, 2010

— More than 150,000 employees conduct the state's business everyday from the highways to college classrooms. But when the agencies look to study an issue or hire top level managers, they often spend public money for private sector help.

“I think it's staring to get very expensive, and we need to be concerned about it,” said Sen. Dan Blue, D-Wake.

Some lawmakers, such as Blue, said they worry government is too quick to pay for private expertise.

North Carolina flag, NC flag, state flag, N.C. flag Senator speaks on N.C.'s private consulting contracts

Records show one of the state's largest agencies, the Department of Transportation, spent $166 million during the past two years on more than 2,500 private consulting contracts, covering everything from road surveys to bridge design to data analysis.

“It shouldn't be surprising that we have that much. We have a good core of people here, but we still require that expertise from the outside to help us meet that schedule,” said DOT spokesman Scott Blevins.

Blevins says that in a $2.9 billion budget, $166 million isn't much. He says private contractors are cost effective because the state doesn't have to hire more full-time talent. In recent years, the DOT spent nearly $3 million on a management and performance study and $6.4 million studying the needs and future of Interstate 95.

To those who argue that the DOT should rely upon the expertise within its department, Blevins says “we don’t have all the expertise we need.”

“We may be double paying a lot of things while we've got somebody on pay roll who's doing something or is qualified to do something and yet we have a contract with a private entity,” said Senate Minority Leader Phil Berger, R-Rockingham.

Despite that concern, WRAL found a wide range of public money paying for private consulting. The community college system spent nearly $75,000 to study the impact of enrolling illegal immigrants. The Town of Cary invested $30,000 for a bus shelter prototype.

The Department of Correction received a study to improve probation, but didn't pay anything because it was performed by a national group for free.

After an executive committee was formed to find a new athletic director at North Carolina State University, the group's first order of business was hiring a search firm for $75,000.

“While it costs money, it's a bigger investment to make a mistake,” said N.C. State Chancellor Randy Woodson. “If you just put a call out on the street and say, ‘Y’all come,’ you're not going to be happy with the folks who walk through the front door.”

Instead, the chancellor says private firms have a broader, more confidential reach to find top candidates who aren't looking for jobs. A private search firm helped bring him from Purdue University.

“I wouldn't be here if it weren't for a search firm that kept me engaged in the process,” Woodson said.

Erica Baldwin of the State Employees Association said she believes the state should rely on it's own workforce instead of outsourcing. For now though, most agencies argue private contracts are an important part of doing the state's business.

“They need to look first at these high priced consultants before they even think about cutting services,” Baldwin said.

When asked if DOT leaders have had a conversation about reducing the amount they spend on outside consultants, Blevins said: “We have not had that conversation.”

The American Council of Engineering Companies argues private consulting can ultimately achieve a cost savings for the state.

Representatives cited a 2008 study by the Polytechnic Institute of New York University which found that the state of New York could achieve significant cost savings by using private sector engineers for the design of public projects. When compared to in-house design costs, outsourced design costs were found to be at least 14 percent lower, based on conservative assumptions.

In addition, ACEC representatives said public money helps the economy with good private sector jobs.



25 Comments

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  • scraitup Jun 2, 2010

    i have worked for the state of nc...let me tell you...they will do anything they want and the common person can do nothing about it..in north carolina...just keep your mouth shut if you want your job

  • DizzyDaphnee Jun 2, 2010

    "In addition, ACEC representatives said public money helps the economy with good private sector jobs."

    Problems IS this is a CLOSED cycle basically helping the SAME people over and over. Not my idea of savings to the state when the same people get by or rich and the other same ones STAY POOR or unemployed or worse yet, work part time for under $8hr. which we all know NO ONE can survive on ANYMORE. I think Senator Blue is totally on target with consult fees and studies.

  • itsnotmeiswear Jun 2, 2010

    The water was backing up in the pipe going under his driveway so my neighbor called the DOT. This was their solution.

    Last week 7 DOT employees showed up in front of my house with 5 dump trucks, a nice 4WD backhoe, 2 crew cab pickups, and a pressure washer. After they got there, they sat around for 30 minutes smoking cigarettes and waiting for a supervisor. He was the guy towing the pressure washer. Then they unloaded the backhoe and used it to dig out less than a foot deep section of a ditch that was no longer than 6 ft. You would not have filled up a wheel barrow with what they removed. They then used the pressure washer to clean out the pipe. If I took a water break, I could have done it myself in 15 minutes with a shovel and the next rain storm would have cleaned out the pipe. The 7 guys were here at least an hour and a half.

    I'm guessing a CONSULTANT was involved.

  • GroupOfPricklyPears Jun 2, 2010

    "contractors tend to know the job better and want to get it done the right way, the first time". Hmmm, didn't the state have to spend millions more on paving/re-surfacing do-overs?

    Is it true that some consultants do the bidding of those who hire them? Is it easier for those who hire consultants to blame and hide behind consultants if something goes wrong with a project whether it is hiring a chancellor or advising on who should get a contract for a construction job? Consultants don't make expensive mistakes? Horse feathers! I agree with Berger, Blue and Baldwin. In my view, what we may need instead of consultants in NC government and all the entities therein is honorable leadership - plain speaking, public servants who are worthy of our precious votes. Have you met one yet? I'm fed up with the seemingly endless duplicity.

  • nanasix Jun 2, 2010

    $166 MILLION DOLLARS WOULD HAVE PAID A LOT OF TEACHER'S SALARIES. The waste in state govt. is unbelievable. If the Atty. Gen. or Gov. would ask for an audit of the SOS/Corp. Div it would show our state is loosing millions of dollars every year as a result of the SOS not doing her job. I've never seen such NEGLECT AND MALFEASANCE OF DUTY, as seen under her realm. A request was made to the State Auditor for an audit, and no one reacts when I've laid the evidence in their hands. Is every state employee covering for another one? It would really take some investigative word to check the connections between consultants getting our money, and those pushing for specific firms to get the jobs??? Just a thought.

  • pbjbeach Jun 2, 2010

    ebuck51
    the issues that you spoke about an the bogging down issues are call the states speceficiations an these contractor are well aware of twhat is required of them in the first place when they are bidding on these contract an then when the once actual get the job/ contract they don want to perform as required an produce a quality product for the taxpayers of this state they are actually footing the bill to pay them in the first place. these contractor now a days are wanting to rush through this projects an not abide by the state speceficiations as that they view the speceficiaitions as regulations an since the bush admin they want every aspect to be totaly deregulated thank you

  • rand321 Jun 2, 2010

    oh, 166 million is not a lot of money. But we have the state trying to get money from internet sales affiliates and other revenue enhancements for every penny possible.

    The State needs to do a better job of making sure taxpayers are not overpaying not only in bad times, but flush ones as well. We never need to have a Mary Easly type affair again!

  • pbjbeach Jun 2, 2010

    edbuck51

    As a former ncdot employeei take personal issue with your coments here in most cases it is the states own personnel that wants to get things done an according to the ncdot spec's but because of some pol's interferrence in along with the protecting of some big an powerful business enity in this state they arent actually allowed to do their jobs duty's. the states mangers have got it to the point that state inspector arer so heaely layden with paper work that they are able to actual dotheir jobs an it has been intinally planed by the ncdot mangers this way just in order to keep the states own personnel tied up to the point that they can enforce an propery oversight the contractors work thank you

  • edbuck51 Jun 2, 2010

    contractors tend to know the job better and want to get it done the right way, the first time; not like a gov't employee who feel like I have justify my position and bogs most things down in paperwork and procedure

  • Finz Up Jun 2, 2010

    The brightest of minds and ability work in the private sector hence the reason you tap private consultants. The problem here (as has been pointed out) is that these contracts are often open ended and laced with corruption which means the job gets done "right" but at a higher cost than should be.

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