CONSULTANT WATCH

What we found


THE BIG PICTURE

by Dylan Bernhardt, Rafique Bhuiyan, Britton Gray, Paige Kreutzwieser, Kendall Latimer, Rebekah Lesko, Creeden Martell, Carlos Prieto, Taylor Rattray, Ashley Robinson, Alec Salloum, Eric Westhaver, and Virginia Wright

April 21, 2015

The provincial auditor’s December 2014 report broadly stated consulting expenses had grown to $120 million, with lax reporting on what services were delivered. Our task was to seek out the details of these contracts.

After an exhaustive search of multiple sources, the Consultant Watch team successfully identified consulting companies and individuals conducting $117.7 million worth of business with the province in the year 2013-2014.

We compared this to the previous year, 2012-2013 ($113.9 million). We then did the same search all over again for two historical comparison years, selecting 2008-2009, the first full year of a Sask Party government ($40.5 million), and 2005-2006, the last full year of an NDP government ($27.6 million).

Every effort was made to identify what companies actually did before placing them on the consultancy list. Where the class was unsure, companies were flagged for follow-up. 

 “Throughout the investigation process, students were able to eliminate certain flagged consultants. These consulting businesses provided clear, obvious and credible information about the services they provided,” wrote student Paige Kreutzweizer in her summary report.

“Others did not.”

Students also looked at the context of rising consultancy, including the fact that Central Services took over the expense-heavy Information Technology Office, formerly in the ministry of economy. However, with the ITO showing lower expenses in the past, other factors come into consideration, in particular the government’s staff reduction plans.  

The province’s turn to consultants marks an ongoing shift from long-term staff to short-term external help. The argument is, you save more in the long run by contracting out. In the last provincial budget, it was stated 1,900 staff positions have been eliminated since 2010.

Similar to what other researchers have found, the Consultant Watch team did not have sufficient information that could quantify the dollar value of the staff reductions. Further obscuring the matter, it appeared there was a certain level of individual back-and-forth migration between staff positions and consultancies.

As it stands, Consultant Watch can only report on what we identified as cost spending on consultants. We must leave it up to the government to identify the cost savings.

“What the students have done is open the door for even deeper investigation on where the government is spending its money,” said Kreutzwiser.

In this spirit, data spreadsheets, web links and summaries are provided for each ministry on this site, in the hope that researchers, journalists and members of the public can use them as starting points in their investigations.

TOP 5 CONSULTANTS

 

John Black & Associates

Lean consultants who promote ‘The Toyota Way to Healthcare Excellence.’ There were the top-paid consultants over the past two years, earning $9,994,986 in 2013-14 and $10,573,428 in 2012-13 under contract to the Ministry of Health. 

 

CGI

CGI Information Systems & Management Consultants have worked with multiple ministries for over a decade. They earned $6,301,343 in 2013-14 working for Health and Central Services. CGI is an IT and business consulting company based in Montreal, Quebec, with an office in Regina.

Fujitsu Consulting

Fujitsu Consulting earned $7,602,639.00 between 2012 and 2014, contracted to the ministries of Central Services and Economy. They are an IT consulting company headquartered in Tokyo, with an office in Regina.

 

Paradigm Consulting Group INC

Paradigm Consulting Group INC earned $7,725,730.00 between 2012 and 2014. A Regina IT consulting firm, they have worked with the ministries of Central Services, Economy, and Education.

Solvera Solutions

Solvera Solutions earned $4,304,061 in 2013-2014 and $3,888,461 in 2012-2013 under the Ministry of Central Services. They are Regina-based tech consultants, who have also done past work with the Ministry of Economy. 

WHERE ARE THEY?

Saskatchewan seeks advice locally and around the world. Here’s a selection of some of the companies consulted, with the locations of their local and/or global headquarters. 

THE BREAKDOWN

ADVANCED EDUCATION

Report by Dylan Bernhardt

Spending on consultants in Advanced Education is relatively marginal. Of the years examined, the ministry spent the most on consultants in 2008-2009, at $533,711. In 2005-2006, advanced education was not a ministry, and expenses were folded in with K-12 education spending.

The three years examined showed progressively less spending in each. Over the past two available years, 2012-13 and 2013-14, spending included:

AGRICULTURE

Report by Dylan Bernhardt

Agriculture’s use of consultants is relatively low. The biggest pay-out in the years examined was to Stantec Consulting LTD during the 2012-2013 period ($295,577). Spending on consulting during this period peaked ($557,363), but dropped to its lowest cost during the following year, 2013-2014 ($120,256). However, it should be noted that two of the 2012-2013 consultants are now Ministry employees, presumably reducing the external payee list while transferring costs to internal payroll (Shelley Jones became Manager of Agriculture Awareness; Gregory Haase became Senior Advisor to the Deputy Minister.) 

 

Payees during the past two available years, 2013-2014 and 2012-2013, included:

CENTRAL SERVICES

Report by Carlos Prieto, Paige Kreutzwieser, Kendall Latimer, Britton Gray, Ashley Robinson

Central Services is a relatively new ministry, created in 2013-2014. It offers service support to some 12,000 government employees, as well as procurement services for information technology and major government projects.

To provide the most accurate historical comparison, we included former ministries and divisions that were folded into Central Services over the years. This includes Government Services, the Information Technology Office, Property Management and the Public Service Commission.

Central Services was singled out by the Provincial Auditor for its rapidly expanding roster of consultants. She found spending of $22 million on 83 consultants, compared to $8 million spent in 2008-2009, a 175 per cent spending increase.

Our research identified $82 million spent on 176 consultants in 2013-2014, compared to $13.6 million spent on 39 consultants in 2005-2006 among the major agencies and ministries that would later comprise Central Services.

Beyond the codes

Our findings were significantly higher in all years for two reasons.

First, the auditor included the former Government Services ministry and Information Technology Office in her data. On the advice of retired senior civil servants, our historical comparison additionally included Property Management and the Public Service Commission, which were also folded into Central Services.

Second, our search was broader. The auditor used the government’s internal MIDAS system’s financial code for specialized technical, technical and management consulting, and the code for system consulting.

Without access to a code search, we instead did a comprehensive review of all the companies listed, searching corporate registry records, company websites, bid documents and other sources to find out how companies identified their services.

As a result, we found many may not have fit into the auditor’s code search but called themselves consultants, in areas such as employee recruitment, market research, organizational planning, communications strategies, and other planning and project management functions.

Obscure descriptions

From this list, we were highly selective which were included in the data. We found a great many described themselves as “consultants” who provide “solutions” to government – whether they were plumbing a building or leasing office equipment.

“A majority of the consultant websites had obscure descriptions which made it challenging to determine who did what, let alone whether or not the were really a consultant,” noted researcher Kendall Latimer.

“(Provincial Auditor Judy) Ferguson was correct when she noted there was no real tracking of what the consultants are acutally doing for the Government of Saskatchewan.”

Therefore, some subjective decision-making had to be employed to determine which individuals and companies were primarily involved in providing advice and/or helping design projects and systems, as opposed to primarily providing a specific good or service to a project. “There were times when I had to delete private companies off of the spreadsheet because they they appeared to be consultants, further deeper research revealed they were not,” said Latimer.

Building the list

For example, we included IT firms that advised on systems design and management. Chief among these, IBM was included because it identifies itself as a consultant, public tenders referred to IBM’s work as consultancy, and it fits within the definition of technical/systems advice used by the provincial auditor. Oracle was also included because it does similar work to IBM. This did not include capital assets, which are found elsewhere in Public Accounts.

Because of the major impact these companies had on the bottom line – over $30 million in 2013-2014 – we have also listed them separately on the spreadsheet.

There were many engineering firms listed. They were included only if they primarily identified their work as consulting, as opposed to performing specific engineering services.

Architects and designers were excluded with the exception of Kreate Architecture and Design. Kreate was included because the firm received $284,188 to conduct design consultations for Lean implementation in 2013-2014. The company received $325,531 the previous year as well, however it fell under capital asset acquisition, so was not included as a consulting cost.

Property management firms that appeared to be mainly leasing property were excluded. However, some property-related firms more broadly described their work as advising government on procurement and management of property; such firms were included.

Communications firms were not included. However, we noted that many provide services that cross the line into consulting, such as strategic communications planning and market research. (see ‘The Communicators‘).

Findings

Even after selective culling, the list of companies was long. Consultancy in Central Services vastly outpaced growth in all other ministries. The nearest competitors in 2013-14 were Health, at $17.2 million and Highways, at $7.4 million. Aside from the $30 million IBM contract, the next-largest suppliers we identified in 2013-2014 included:

For a full listing of all companies contracted under Central Services – including those we excluded – readers should consult the Public Accounts Volume II reports. Our selected list is provided in a downloadable spreadsheet, below. Given the complexity of the research task, we invite readers to alert us to any errors or omissions.

ECONOMY

Economy is a new ministry, formed in 2012 and making its first full appearance in public accounts in 2013-2014. In addition to absorbing the Ministry of Energy and Resources, it includes immigration, economic development, Tourism Saskatchewan and labour market development. Although new, it’s already made a significant impact on consultant spending, even after shedding the high-cost Information Technology Office to Central Services.

For 2013-2014, we identified 12 firms conducting approximately $4 million in services, making it one of the government’s biggest spenders on outside consultants. Only three other ministries spent more, the ministries of health, highways and central services.

This was significantly more than previous spending we tracked through the ministries and departments it absorbed, which according to our findings amounted to $1.7 million, including approximately $1 million spent in the former energy and resources ministry (see spreadsheets below). 

In 2013-2014, more than $1.5 million was spent on Fujitsu Consulting, headquartered in Tokyo. The reason for this dramatic jump likely lies in the fact that Fujitsu recently finished building a new state-of-the-art data centre in Regina, presumably allowing the government to keep down some costs and assist the growing provincial economy. However, the amount of money paid to Fujitsu across ministries is more than almost every other consulting company hired by the Saskatchewan government, eclipsed only by Seattle-based Lean advisors John Black and Associates.  

From Tokyo to Saskatoon to Washington

Fujitsu Consulting took up the greatest share of the budget, at $1.5 million. The reason for such a dramatic jump likely lies in the new state-of-the-art data centre the company has finished building in Regina, presumably allowing the government to keep down some costs and assist the growing provincial economy.

Also over the $1 million mark was the Information Service Corporation, which belonged to the Government of Saskatchewan until it was privatized in 2013. It is now a publicly traded company owned by shareholders.

Another company is Saskatoon-based Insightrix Research, which received a $215,000 payment for their services. Insightrix, with head offices in both Saskatoon and Horsham, Australia, recently gained internet fame for a viral video made by the company, which depicts actors using common Saskatchewan slang, complete with subtitles for unknowing viewers.

Aside from the video, Insightrix has worked closely with the Ministry of Economy and its predecessors, getting a 2012/13 contract worth $237,000 from the Ministry of Advanced Education. The part of the Ministry of Advanced Education that hired Insightrix was absorbed into Economy in 2012.

Standing among the private companies is one non-profit, FPInnovations. The group describes itself as a forestry research organization that has worked in Saskatchewan’s lumber industry. Headquartered in Pointe-Claire, Quebec, FPInnovations is described on the company’s website as a “private, non-profit forest research centre” that that works to help “Aboriginal peoples and communities in Saskatchewan improve entrepreneurial efforts necessary to marketplace success.”

Finally of note, the economy ministry also made a contribution to the services of Nelson Mullins Riley and Scarborough, contracted to lobby Washington politicians on behalf of Saskatchewan.

EDUCATION

Report by Kendall Latimer

The Ministry deals with early learning and child care for Kindergarten through Grade 12 education, literacy, and library sectors. The Ministry supports the sectors through funding, governance and accountability. Formerly, both K-12 and post-secondary education were under the same department, called Learning. Today, post-secondary institutions are under the Ministry of Advanced Education.

Spending on consultants in 2013-2014 was slightly less than under the previous government, although it should be noted the former Dept. of Learning had a larger mandate, as stated above. In 2005-2006, Dept. of Learning consultant contracts amounted to $1.5 million. In 2013-2014, the Ministry of Education’s spending was just under $1 million.

Top earning firms of the last two available years, 2013-2014 and 2012-2013 included:

Additionally, the ministry contracted the communications/brand building company ARCAS Group at $245,081.

ENVIRONMENT

Environment frequently relies on consultants, for everything from international trade law advice to national resource management strategies. Thirty-six companies were identified, earning a combined $2.5 million in 2013-2014. The highest spending of the four years examined amounted to $2.8 million in 2012-2013, significantly up from $1.4 million in 2005-2006.

The top earning companies over two years (2013-2014 and 2012-2013) were:

EXECUTIVE COUNCIL

Report by Ashley Robinson

Executive Council is in charge of providing research, analysis, records management and policy advice to the Cabinet. They coordinate policy development and government communications. They are in charge of coordinating the management of relations with Canadian and foreign jurisdictions and are responsible for trade policy. They also coordinate manage matters relating to official protocol, provincial honours, awards and French language. They also provide administration services to the Lieutenant Governor and support to the Premier.

 

Executive Council did not use consultants in the two historic comparative years examined, 2005-2006 and 2008-2009. In 2012-13 they contracted Vancouver-based IT and management consultants Sierra Systems ($145,306). Also on the list was Nelson Mullins Riley & Scarborough, a U.S. law firm on a multi-year contract to lobby Washington on behalf of the province ($51,570).

 

The following year, $121,663 was spent on payments to Seattle-based Pacific Northwest Economic Region, an inter-governmental networking and lobbying group, and to Blast Radius, a communications consulting firm headquartered in Chicago with an office in Vancouver.

 

In summary, the following firms were included in payments of the last two available years, 2013-2014 and 2012-2013:

No outside firms were used in 2005-2006 or 2008-2009.

FINANCE

Finance is in charge of carrying out all central agency duties and functions for the Government of Saskatchewan. The ministry is responsible for operating the treasury board, management and control of the province’s finances, developing economic and fiscal policies, and supporting the Government in being accountable to the public for use of funds.

 

Finance has used a few consultants over the years. Between 2012 and 2014, $474,841 was awarded to Karen Lys of KML Consulting to manage the ministry’s Hyperion data base project. The ministry also turned to KPMG for advice during this time. Just three services were used during 2013-2014 and 2012-2013:

 

In the past, the Ministry turned to Marsh Canada Ltd for risk analysis ($60,000 in 2008-09) and the Conference Board of Canada for economic forecasting ($55,950 in 2008-2009). CGI figured highly during the last year of the NDP government ($444,042 in 2005-2006), but did not appear in the other years examined. In earlier years, the ministry had contracts with Oracle, the former employer of KML Consulting’s Karen Lys.

The diversity of financial advisors declined over the years, with KPMG LLP becoming the Finance Ministry's primary consultants

GOVERNMENT RELATIONS AND MUNICIPAL AFFAIRS

  • Government Relations and Municipal Affairs is a light user of consultants, spending just $719,806 between 2012 and 2014 ($345,550 in 2013-2014 and $374,256 in 2012-2013). However, spending is noticeably higher than in 2005-2006, when no consultants were hired, and 2008-2009, which was under $100,000.
  •  
  • KPMG, which provides a wide range of financial management and analysis services, marked the biggest expense over the two most recent years. Other services for 2012-2013 and 2013-2014 included:

Of note, several individuals listed as suppliers became government employees the following year.

 

HEALTH

Report by Taylor Rattray and Creedon Martell

The Ministry of Health uses the highest number of consultants after Central Services. We identified 38 firms and individuals paid a combined $17.2 million in 2013-2014, up from $14.7 million the previous year. This is significantly more than the consultants we identified in 2005-2006, which numbered seven and earned $3.6 million.

Organizations such as the Kaizan Institute, John Black and Associates, Lean Advisors (Canada) Inc. and Syntegrity focussed on lean management and organizational change. There were also some consulting physicians, as well as groups involved in health care policy development and IT management.

The implementation of Lean appears to have increased spending in the ministry. Lean consultant John Black & Associates was the highest paid consultant, earning over $20 million by the end of the 2013-2014 fiscal year. It was recently announced that the government is ending the contract, suggesting that spending in this area should be expected to decline, if not in the current 2014-2015 fiscal year, then in the next.

In common with some other ministries, there was some blurring between employee-consultant lines, with some individuals appearing to simultaenoulsy be government employees and/or consultants depending on the source of information.

The top-earning contracts between 2012 and 2014 were:

The fourth-highest earning company, Health Conveyance, became a matter of public interest after owner Corey Tochor was elected as a Sask Party MLA in 2011. In June 2012, the province’s conflict of interest commissioner, Ron Barclay, granted a temporary exemption that allowed Health Conveyance to finish up a four-year contract while Tochor arranged the company’s sale. He is no longer listed as an owner. 

 

THE EXPLODING HEALTHCARE PIE

Between 2005 and 2014, the number of consultants contracted by Health — and their bills — exploded. In 2005 there were seven consultants earning a total $3.6 million. By 2014, 26 firms took home over $17 million.  

HIGHWAYS

Highways and Infrastructure loomed large in the last provincial budget, with the government pledging $576 to upgrade the province’s roads and bridges.

The ministry also stands tall in consultant spending, ranking third behind Central Services and Health in our review. We identified 45 consultants earning $7.4 million in 2013-2014. This was a big jump from the $2.7 million spent in 2008-2009, and just over $1 million spent in 2005-2006.

Over the past two years of public accounts, engineering consultants were the most in demand, followed management consultants. There were also a few forestry and environmental consultants hired by the ministry.

Top consultants over two years, between 2012 and 2014, were:

Management consultants included:

JUSTICE

The Ministry of Justice handles a wide variety of departments and services, including the courts, criminal justice and prisons. The ministry also provides civil legal services for the government, and support for victims of crime. Several boards and committee fall under the ministry, such as the Film Classification Board and the Victims Compensation Appeal Committee. In 2013-2014, the Ministry of Corrections, Policing and Public Safety was folded into Justice.

Many individuals on the payee list provided services that would not be considered consultancy, in the sense of providing management advice. These include chaplains, justices of the peace, psychiatric assessors, mediators, legal services and First Nations cultural advisors. Their expenses are not included in the tally.

However, the ministry also avails itself of general management and technology consultation. In 2013-2014, this amounted to $1.6 million. This is not a high amount compared to other ministries, but it was a significant jump from the previous year, when only two consulting firms were hired, costing $189,998. The 2008-2009 comparative year showed an equally low level of consultancy, while 2005-2006 was again a higher-spending year, mainly due to work carried out by CGI Information Systems and Management Consulting.

Top-earning Justice consultants in 2013-2014 were:

LABOUR RELATIONS AND WORKPLACE SAFETY

This is a new ministry, and spending on consultants is relatively low. Previously, labour had a home with advanced education and training. In 2013-2014 just one firm was hired.

    • Ascent Management ($79,040) is a management consulting firm that specializes in “bringing ideas to life.”

PARKS, CULTURE AND SPORT

    • Parks, Culture and Sport offers a substantial amount of funding to community organizations and programs, ranging from the now crippled Active Families Benefit tax, the Royal Saskatchewan Museum and a few Francophone initiatives throughout the province. The ministry has experienced some ebbs and flows in its staffing but it has remained a fairly consistent entity.

Culture, Parks and Sport employed six consulting firms in the years examined. These included:

    • Pricewaterhouse Coopers LLP. 2013-2014. $60,109.00: World’s second largest professional services network. It has 157 firms across the world that are under its fold, largely providing tax, assurance, and advisory services. PwC was contracted to oversea Lean implementation across Saskatchewan ministries.
    • Westmark Consulting LLP 2012-2013. $65,575.00: Westmark is a management consulting service provider specifically gauged towards lean structures and businesses. Westmark Consulting LLP is based in Vancouver, run by Greg Shea the co-founder and partner, Haneef Chagani co-founder and partner, and Jie Feng a partner. While it was still operating independently, as of 2014 it came under the control of PwC (Price Waterhouse Cooper).
    • BB Consulting Services. 2012-2013. $60,336.00: The firm was tasked with doing IT for the department.
    • McNair Business Development Inc. 2012-2013. $99,400.00: McNair focuses on marketing and business management in its consulting work. To a lesser extent they also have researchers and ‘thought leaders’, which essentially means speakers and people to conduct seminars. It is based in Regina and is headed by founder and President Doug McNair.
    • Perspect Management Consulting Inc. 2012-2013. $244,002.00: Services are geared towards management strategies and efficiency in the workplace. Additional information was hard to find as the jargon of consulting companies is often unclear. The company was started by Colin Mcallister, who has a history with the government of Saskatchewan as a former employee and consultant, primarily focused on promoting Lean initiatives. His employment with the Saskatchewan government is as follows:
      •  Lean Transformation Leader at Saskatchewan Ministry of Tourism, Parks, Culture and Sport from December 2011 – October 2012
      •  Ogranizational Change Consultant / Enterpise Portfolio Manager Saskatchewan Liquor and Gaming Authority April 2013 – April 2014
      • · Lean Consultant Saskatchewan Gaming Corporation March 2012 – December 2014
    • Trails Work Consulting 2008-2009. $50,383.00: Trails Work is a consulting firm based out of Sioux Falls, North Dakota that provides expertise on snowmobile and ATV trails.

Consulting trends for this department were fairly innocuous compared to other agencies. Across the surveyed years the annual total paid to consulting agencies totalled: $60,109.00 in 2013-2014, $469,313.00 in 2012-2013, $50,383.00 in 2008-2009, and $0.00 in 2005-2006.

The two years under $100,000 represent only one contract each year, which when looking at the 2006-2006 result of $0 being spent on consulting firms not terribly surprising. The 2012-2013 total of $469,313.00 is the largest sum spent on consulting across the board for this department,

Following the trend that has been noted in media reports, more spending on consultants occurred after the Sask Party took office in 2008-2009.

SOCIAL SERVICES

the ministry of social services supports citizens at risk, providing child, family and disability supports. The ministry also supports community-based organizations.

Due to the nature of its work, many of the payments listed involve legal and counselling work connected to serving clients. For example, the Merchant Law Group billed $920,500 in 2012-2013.

Management, communications and IT consultants are less common, although there have been some.

Among the years examined, consultants played a larger role in the past than they do today, with some $860,000 spent in 2005-2006, in addition to an over $3 million IBM contract. IBM’s services are included because SaskTenders describes IBM service contracts as consutling. (This amount does not represent physical assets, listed in a separate section of public accounts.)

In contrast, just over $300,000 was spent in 2013-2014 that could be identified as consulting. In more recent years, the ministry has turned mainly to the California-based National Council on Crime and Delinquency for strategic analysis and management models, as well as McNair Business Development. Additionally, Price Waterhouse Cooper, which holds a Lean implementation contract for the provinces, has been working with Social Services.

Consultants for the two-year period of 2012 to 2014 included:

COMMUNICATIONS FIRMS

The advertising agencies of the past now mainly refer to themselves as communications consultants, offering everything from social media strategies, to market analytics, to speech writing.

The provincial auditor did not include communications in her review, so we also set them aside from our final tallies.

But given that such firms now tread deep into consultation territory, we made note of some of the more active ones over the years. These include:

When they formed the government, the NDP were frequently under fire for government-paid advertising, particularly before election years. You can see this trend in the highest spending year we examined, $7.4 million in 2005-06.

That aside, the communications consultants remained busy in subsequent years examined, most recently taking in $2.5 million.