Friday, April 4, 2008
Resolution Of Issues Arising From Das’ Strategic Sourcing Initiative
DES MOINES - The Iowa Department of Management (IDOM) and Iowa Department of Administrative Services (DAS) announced that the issues arising from the Department of Administrative Services’ Strategic Sourcing Initiative have been resolved, with consulting firm A.T. Kearney relinquishing its ability to collect up to $225,000 in potential performance bonuses.
Last summer, Governor Chet Culver had ordered the suspension of future payments relating to the project, and ordered a review of the project, after Auditor of State Vaudt had issued a report indicating that, as of that time, the actual savings realized from the effort was less than the consulting fees that had then been paid. A thorough investigation of the matter by IDOM resulted in staffing and other changes at the DAS and negotiations with A.T. Kearney concerning its claim for the performance bonuses.
“As we indicated in our final report to the Governor on this matter, this effort did not yield the original projected savings for a variety of reasons, including a decision by the state to reduce the scope of spending categories to be serviced by this contract. However, it is important to note that many of the contracts negotiated as a result of this process will last for several years and generate future savings significantly greater than the total contract fees”. DOM Director Charles Krogmeier said.
In July when Governor Culver suspended the payment of further fees, A.T. Kearney had been paid its base fees for the second phase of the contract, and may have been entitled to receive additional performance bonuses based on additional validated savings, pending a final audit. The firm has agreed not to seek these bonuses, irrespective of the level of validated savings, in light of the concerns raised by Governor Culver about the phase one bonus arrangement.