Deloitte Consulting, “Inside Track” of State Contract

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“Representative Boasted had Inside Track!”

by Tom Aswell

20130905-063514.jpgTen companies have responded to that request for proposals (RFP) calling for the consolidation of information technology (IT) but because of the number of submissions, the scheduled awarding of the contract was moved back “seven to 14 days,” according to an email to bidders by Neal Underwood, assistant director of Statewide Technology.

One of the vendors being mentioned as the potential winner of the contract, expected to be worth millions of dollars, is Deloitte Consultants, one of three companies that met regularly with Division of Administration (DOA) representatives and state IT executives over the past year in discussions of what services they could provide the state. Moreover, a confidential source said a Deloitte representative has already confided in several persons that the company “had a good shot” at winning the contract because it had been meeting with state officials over the past year.20130905-063816.jpg

That scenario evokes memories of the privatization of the Office of Group Benefits (OGB) a couple of years back. DOA brought Goldman Sachs in to help formulate the RFP for the privatization and the Wall Street banking firm was subsequently the lone bidder—at $6 million.Goldman Sachs subsequently withdrew from the project in a dispute over indemnification but re-bid when the RFP was issued a second time. Blue Cross Blue Shield of Louisiana eventually landed the contract to administer the agency’s claims.So now we have Deloitte working with state officials for a year to help formulate the RFP and the company is now said to have the inside track to winning the contract. Déjà vu all over again.

At least two other companies, including IBM, were said to have held meetings with the state in the months leading up to the issuance of the RFP. One of those reported to have attended those meetings was Northrop Grumman but that company was not one of the 10 companies submitting proposals, sources say.Several other companies reportedly requested permission to attend the pre-proposal meetings but were denied the opportunity.

The meetings would seem to fly in the face of a July 19 memorandum from Richard “Dickie” Howze, interim state chief information officer, to DOA section heads and Council of Information Services directors in which he cautioned against any contact with potential vendors during the RFP process at the risk of possible termination.

“During this procurement process it is crucial that you and your staff do not have any contact with vendors who are potential proposers or who may be part of a proposals as a subcontractor regarding this RFP or other related RFPs,” the memo read.Besides Deloitte and IBM, companies submitting proposals included Dell Marketing, First Data, Gabriel Systems, Information Services Group (ISG), KPMG, Peak Performance Technologies, RNR Consulting and Tecknomic.

Even though the RFP was only for “Information Technology Planning and Management Support Services,” the state wrote into the RFP that the vendor awarded the planning RFP would not be precluded from the implementation of the consolidation, in effect guaranteeing the winner of the planning contract the contract for implementation of the plans.

It also alluded to recommendations for “potential legislation to support effective implementation and administration” for “effective governance models for the statewide centralized IT services organization.

”It was not immediately clear why “potential legislation” would not have been addressed during the 2013 legislative session and prior to the issuance of the RFP as opposed to issuing a contract and then attempting to address legislative issues as they arose during the course of the contract.

In conjunction with the RFP, DOA also issued a request for information (RFI) for business reorganization (and) efficiencies planning and implementation consulting services which would seem to be an exercise in redundancy given the fact that a similar efficiency study was conducted during the tenure of former Commissioner of Administration Angele Davis and that yet another such study is already underway using Six Sigma methodology.

Six Sigma is a methodology that employs tools and techniques for process improvement. The concept was pioneered by Motorola in 1981 and is widely used in different sectors of industry.Just as with the RFP for the planning and management support services, several vendors responded with proposals. Oral presentations, as with the RFP, however, were limited to a select few companies, including Deloitte, McKinsey & Co., Alvarez & Marsal and CGI Technologies.

McKinsey & Co. is primarily an organization offering internships to trainees for conservative political causes. Gov. Bobby Jindal, who seems hell bent on privatizing virtually every agency and service in state government, worked for McKinsey & Co. for less than a year in the only private sector job he has ever held.

The RFI required that vendors, among other things, present their approach/methodology to identify operational efficiencies, experiences in other governmental settings, and the areas of governmental services “that would produce the maximum benefit.”

Portia Johnson, executive assistant to Commissioner of Administration Kristy Nichols, sent an email to companies who submitted responses to the RFI. That email said:“Thank you for your interest in RFI 107:01-000001238 Business Reorganization Efficiencies Planning and Implementation Consulting Services. Due to the vast response and in the interest of time, the State has chosen several vendors representative of the industry to interview. Although you have not been selected to proceed in the process, we have taken any documents submitted by you under advisement.”

Said another way: “You have been eliminated for consideration because we have other vendors with whom we prefer to do business. But we are going to go through your proposals and we will probably steal some of your ideas and you won’t get a dime for your efforts. Thank you for your trouble.”

CNSI and the federal investigation of its $200 million contract with the Department of Health and Hospitals (DHH) and the ensuing resignation of DHH Secretary Bruce Greenstein, who had maintained continued contact with his old bosses at CNSI during the bidding, selection and contract awarding processes;

Biomedical Research Foundation (BRF) and its inside track advantage by virtue of its CEO/President also serving on the LSU Board of Stuporvisors, which issued the contract to BRF to run the LSU Medical Center in Shreveport and E.A. Conway Medical Center in Monroe;

Goldman Sachs helping to write the RFP for the takeover of OGB and subsequently being the only bidder on the RFP;

Meetings between state officials and vendors for a year leading up to the issuance of an RFP for the consolidation of IT services in more than 20 departments within the state’s executive branch;

Folks, we’re starting to detect a trend here.

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