Job goes to D.C.-based firm
February 9, 2024
by Michael R. Wickline, Arkansas Democrat-Gazette
Gov. Sarah Huckabee Sanders’ administration has awarded an up to $5.5 million contract for a consultant to help the state’s 15 executive branch agencies become more efficient and improve services to Washington, D.C.-based McKinsey & Co.
The contract will begin Feb. 19 and continue until Feb. 18, 2027, “unless earlier terminated or cancelled in accordance with the Contract or some other writing agreed to and signed by the parties,” according to a copy of the contract. The contract may be extended or renewed by the parties in writing, but the total possible term of the contract may be no longer than seven consecutive years, unless otherwise provided by state law.
The contract with McKinsey & Co. is milestone-based and not to exceed $5.5 million, said Department of Transformation and Shared Services Chief of Staff Alex Johnston. For example, the deadlines for a final revised performance evaluation system and for a final revised pay structure system is June 1.
“McKinsey and Company was awarded the contract because they presented the best proposal at the best value to the state,” the Department of Transformation and Shared Services said Thursday in a written statement.
In its proposal, McKinsey & Co. estimated Arkansas’ transformation could deliver at least $500 million in “annual efficiencies” and 10% to 30% “effectiveness improvements across government processes and services,” based on its experience in other states and an analysis of Arkansas’ data.
The Legislative Council’s Performance Evaluation and Expenditure Review Subcommittee on Tuesday will consider the transformation department’s request for $4.2 million in state restricted reserve funds to help pay the consultant, and the Review Subcommittee will consider reviewing the contract Tuesday. Transformation department funds will cover the other $1.3 million of the consultant’s tab, based on the contract.
The consultant will conduct efficiency reviews on organizational strategic alignment, personnel, procurement, real estate, vehicle fleet management and information technology, state Department of Transformation and Shared Services Secretary Leslie Fisken said in a letter dated Jan. 30 to Department of Finance and Administration Secretary Jim Hudson seeking the $4.2 million in state restricted reserve funds.
“This review will be used to modernize and update both internal and external processes to provide the most efficient operations, eliminate cumbersome processes and, where applicable, better utilize technological resources,” she said.
The state Department of Transformation and Shared Services awarded the contract to McKinsey & Co. after issuing a request for proposals for “strategic management consultant services” on Dec. 18 and receiving eight proposals by the Jan. 16 deadline for prospective consultants to submit proposals.
The transformation department issued the request for proposal after the state’s “pro-bono services” agreement with The Boston Consulting Group, which started Oct.2 and ended Dec. 15.
Under the pro bono services agreement, The Boston Consulting Group agreed to work closely with the Department of Commerce and Department of Transformation and Shared Services “to assess how well Arkansas state agencies are operating effectively,” including identifying “opportunities to streamline the government in order to enable the government to serve Arkansas Stronger.”
Last month, Fisken said “Our team will review every bid that comes in, so we are not favoring one over the other” when asked whether The Boston Consulting Group is the favorite to receive the strategic management consulting contract through the department’s request for proposals.
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