Downsizing help

January 7, 2002

Throwing Money at Consultants

Getting it backwards with consultants Why would a government ministry ask high priced consultants to do work of lower priced staff that are being fired? Consultants have a role when problems are well defined and outside expertise is necessary, but consultants are not a substitute for competent management or competent government.

The Ministry of Human Resources is about to reallocate its scarce resources from poor people to well off consultants. If Mike Smyth of the Vancouver Province and Bill Tieleman of the Georgia Straight are correct, BC could be headed for the same problems as Ontario - Problems that were harshly criticized by Ontario's Provincial Auditor.

This is not small potatoes. In Ontario, the consultant was authorized to bill up to $180 million plus additional expenses not covered by a cap in the contract. The Ontario Auditor wrote "We also note that at March 31, 2000, the project's cost pool totaled $146.7 million ($117.4 million Andersen Consulting, $29.3 million Ministry) and the benefit pool totaled $116.2 million, so the cost pool exceeded the benefit pool by $30.5 million; payments to Andersen Consulting totaled $95.6 million." In December 1999, Ontario's Standing Committee on Public Accounts passed a motion saying "no further payments should be made to Andersen Consulting until the primary objective of implementing new technology is met and overall benefits exceed costs."

The Provincial Auditor also suggested Ontario's project allocated benefits to the consultant that ought to be attributed to Ministry staff. In particular, the Auditor wrote "As a result of the continuing significant differences between the rates charged for Andersen Consulting and ministry staff time, our concern remains that under the renegotiated agreement Andersen Consulting is still receiving a disproportionate amount of the benefit pool in relation to its work effort."

Phase one of the BC government's Request for Proposals is copied below. Read it and think about why high priced outside help is necessary to do the job that experienced, and less expensive, public employees could do. Of course, those would be the public employees who are receiving layoff notices in a few days.

7.1 Basic Requirements and Deliverables for Phase 1

Basic requirements:

The Proponent's approach and plan should include the following components:

a corporate vision and definition of an Alternative Service Delivery Model,

definition of the Ministry's high level business requirements, and known systems requirements and constraints,

alternatives for service delivery,

evaluation of the alternatives, including business, policy, systems impacts and technology alternatives, risks, costs and benefits,

recommendations,

high level strategy and plan.

Deliverables:

The required deliverables for Phase 1 are described below. The Proponent may propose additional deliverables, and may break down the following deliverables into components with decision points.

A Statement of Work including the topics to be included in the analysis, a detailed plan for delivering the Basic Requirements listed above, and a list of the Ministry representatives to be interviewed. The Statement of Work must be approved by the Executive Sponsor before further work can begin.

A brief Preliminary Findings document setting out preliminary conclusions following review of Ministry documentation and interviews with Ministry representatives. This document will include an outline of the points to be covered in the Report and Recommendations document, which must be approved by the Executive Sponsor.

A Report and Recommendations document including:

the Basic Requirements listed above,

an analysis of the applicability of the work done in selected other provinces to the BC Government's welfare changes,

a cost/benefit analysis of each service delivery alternative including the financial savings that would be achieved, in sufficient depth to form the basis of a Business Case,

recommendations on the technologies that could best be employed in an Alternative Service Delivery Model, including consideration of "make or buy" options, and

a high level strategy and plan for implementing the recommended Alternative Service Delivery Model.

The Report and Recommendations document will be delivered in iterations as follows:

Draft Report intended for review and comment by a small audience to be named by the Executive Sponsor,

Final Report

At the Ministry's option, an Executive level presentation of the highlights of the Final Report.

Project Management services to provide quality assurance, and ensure delivery of the deliverables on time.

That last requirement is particularly surprising. If you wanted quality assurance wouldn't you want an independent manager or auditor to keep track of the project? Are the libs really asking the fox to guard the hen house? Since they are asking the consultant to tell them what they need, they probably are also asking the consultant to tell them whether it has been delivered - whatever "it" is!

January 3, 2002

Changing Welfare's Mission

An example of the sham of staged cabinet meetings is seen by comparing Human Resources Minister Murray Coell's presentation to the November 7th show with the details of his ministry's Request for Proposals.

During the November 7th staged cabinet meeting, Coell laid out a vision and mission statement with which few would argue. His slide presentation showed:

Vision:      "British Columbians achieving their full economic and social potential."

Mission:    "To provide services that move people into sustainable employment and
                  assist individuals and families in need."

Coell's presentation called for "performance based outcomes leading to sustainable jobs." Nothing was said about "Alternative Service Delivery" yet the Request for Proposals posted on the BC Purchasing Commission's website on behalf of Coell's ministry calls for precisely that with emphasis on privatization, outsourcing and downsizing.

The scoring system for accepting any bid to do consulting work for the Ministry of Human Resources is weighted so that no proposal will be considered unless it meets the following requirement:

"Alternative service delivery experience:
Demonstrated experience in a senior role on projects in other provinces involving alternative service delivery models, such as downsizing, outsourcing of traditional public sector services, negotiations involving partnering with the federal government, creative financing or public-private partnering, privatisation, or similar objectives in designing or implementing alternative ways to provide government social service programs. Higher points will be awarded where the relevant projects involved delivery of social services. Skills in change management, business process design, and IT-concentrated projects will not be sufficient to satisfy this criterion."

This requirement suggests that the fix could be in for who the government wants as its contractor for privatizing and downsizing social services in British Columbia. Most importantly, for a government that constantly harps on measuring by outcome rather than by process, little in the Request for Proposals is outcome oriented. That weakness is covered by one general requirement for "a cost/benefit analysis of each service delivery alternative including the financial savings that would be achieved, in sufficient depth to form the basis of a Business Case." Anyone could recommend a rate reduction that would have far more impact on the ministry expenses than something like a new phone system, but how would the social impact of pushing more people into crime for survival be measured?

The Request for Proposals references the list of programs currently provided by the Ministry, as shown on its website, and the presentation Minister Coell gave to the November 7th staged cabinet meeting. It is more than unfortunate the RFP doesn't focus on what Coell claimed as his ministry's vision and mission. Is the real mission privitizsation and downsizing at the cost of "services that move people into sustainable employment and assist individuals and families in need"?