The New York-based consulting firm, Alvarez and Marsal, has been awarded two efficiency study contracts in Wyoming totaling $2.175 million through the Government Efficiency Commission. A&M makes more money for each new efficiency study they conduct whether the state saves any money or not.
Former Gov. Matt Mead wanted to help the state become more efficient, and I believe he tried hard and I am thankful for his efforts. Now this monster task is in Gov. Mark Gordon’s hands and I wish him the best.
In testimony to the GEC on May 2, A&M recommended Wyoming spend $45-$55 million more with the hope of saving over $200 million in the 2023-2024 budget, yet there doesn’t seem to be a single guarantee. Pat Arp, Gov. Gordon’s chief of staff, pointed out that A&M’s current $2 million study has stopped short of showing if and how the savings can be implemented.
A&M has conducted similar multi-million dollar efficiency studies for Kansas, Louisiana and North Carolina and the savings there seem uncertain at best. Is it asking too much to have A&M verify the exact amount these other states saved?
Mark Howard, A&M’s Denver-based consultant, then took the floor to remind us that we are right where we need to be (after we’ve spent $2 million). A&M has introduced a set of ideas to introduce savings, he said. They have a very long list of ideas, but the next step would be to invest $10 million to recover savings. He also added that such studies are not new, but “the studies are done, you farm out all the recommendations, nobody knows what happens.” I guess the initial $2 million just got their teeth wet.
With the new software A&M purchased for the state, it will be the state’s responsibility to track any savings. Is this setting up Wyoming’s state employees to bear the blame if no savings are ever realized?
Many of A&M’s recommendations do not seem feasible and others are already being implemented.
When responding to questions about educational savings, A&M offered up their Kansas study. Spoiler alert: According to the Kansas Board of Education, their recommendations seem to have never been acted on there. Yes, JW Rust, a consultant at A&M, used an example of a savings recommendation that was never implemented, but failed to mention that to the panel. One of their Kansas recommendations was to slash teacher benefits. Did we not already know that would save money?
I was relieved that when A&M was asked how to handle some of their other recommendations they didn’t suggest one of their consultants gain a government position, as happened in North Carolina. The Raleigh News & Observers reports that Rudy Dimmling, who is a consultant for A&M, was being paid roughly $800,000 per year for his consultancy services before being appointed as the state’s Medicaid Finance Director at an annual salary of $175,000. And now it looks like he is back to consulting for A&M.
When looking at A&M’s “Shared Services” handout located on the WyoLeg.gov website, it appears that A&M is also recommending we spend $10 million more for a few other recommendations. This is not a typo. The “investment” for a recommendation would cost around $10 million. Yes. And then if we actually do some of this, we are possibly looking at spending more money.
Chris Cowley was introduced at the GEC hearing as A&M’s “supply chain and logistics” person and seems to be based in Seattle. He is also their “Wyoming guy” but I could not find him listed on the A&M website. Mr. Cowley mentioned that hard dollars are not the only thing A&M is looking for. (Uh oh! I am starting to view statements like this as a disclaimer for later when no savings are realized.)
In their initial $280,000 study, A&M barely mentioned strategic sourcing, suggesting that $126 million in current state contracts — copier purchases for example — could benefit from being strategically sourced. Now it seems they have someone ready to explore this field at taxpayers’ expense.
For the past three years, I have been advocating for only a strategic sourcing proposal where payment is based on the percentage of savings. It was probably foolish to think A&M would have watched a revenue stream walk out the door.
Also, according to A&M, it sounds like “everyone has to be on board” or this won’t work out. How will we know if future elected officials will even be committed to this?
Why don’t we wait and see if the current $2 million study ends up savings us any money before biting off another $45 million?