Feds hire 'cuts' consultant at $90,000 a day

The federal government is paying a high-powered management consultant firm almost $90,000 a day for advice on how to save money.

Deloitte Inc. was hired on Aug. 15 on a $19.8-million contract to advise the federal cabinet and senior officials on ways to balance the books by 2014.

The contract is to advise "senior and elected officials on public and private sector best practices in improving productivity and achieving operational efficiencies." It expires March 31.

'Engaging private sector advisers who have been successful with cost-saving operational reviews will better enable ministers and deputy heads not only to compile their individual cost-savings proposals but also to provide practical advice on what to look for and how to execute their plans.' Heather Hume, spokeswoman, Treasury Board president Tony Clement

There is also an option for a one-year extension. The federal government invited a select group of 20 "pre-qualified" firms to bid on the work on July 11, rather than use a fully open tendering process.And documents describing the work required were supplied directly to the invited bidders, instead of on a tendering website for anyone to see.

The Canadian Press obtained a copy of the "statement of work" under the Access to Information Act.

Deloitte will advise the government on the Strategic and Operating Review, a year-long exercise announced in the March 22 budget which will eventually trim $4 billion from $80 billion in annual program spending.

Tony Clement, Treasury Board president, has asked 67 departments and agencies to submit two scenarios this fall, one with cuts of five per cent, another with cuts of 10 per cent.

Opposition MPs said the government was spending too much on consultants at the same time as cutting services for Canadians.

"A day's pay for this consultant is more than a year's pay for frontline Service Canada workers," said NDP MP Jean Crowder, the party's critic for human resources and skills development.

Finance Minister Jim Flaherty says there's a lot of expertiseto draw on in the private sector.

"With respect to spending, we certainly are opposed to reckless spending," he said. "Private sector advice is valuable, its important, its essential."

"When we reach our goal of $11 [billion]savings over four years it will be well worth Deloittes cost which will be under 2/10ths of one percent," he wrote from his Twitter account.

Transfer payments won't be touched: Clement

A nine-person committee headed by Clement will vet the proposals. The results will become part of Flaherty's spring budget.

Clement has said transfer payments to individuals and the provinces will not be touched.

To date, the government has provided only minimal information about the timelines and process.

Deloitte's final reports are due to be delivered in February, suggesting the spring budget is to be released in March, the traditional time frame. The firm provided training sessions for officials over the last month, as well as management tools to help the committee review the spending-cut proposals expected in October from more than five dozen departments and agencies.

The contract also calls for advice on consolidating the government's far-flung data centres, a centrepiece of the current belt-tightening exercise.

The government has already paid PriceWaterhouseCoopers a $2.5-million fee for advice on how to reduce 308 data centres to about 20. Deloitte must also provide an information specialist to advise on "disposing of information," and "co-ordinating Access to Information and Privacy Act requirements." The expert will also be "responsible for the efficient and systematic control of the creation, receipt, maintenance, use and disposition of records."

Bell, IBM among other invited bidders

A spokeswoman for Clement defended the contract, saying Ottawa needs the best advice available for reducing costs.

"Engaging private sector advisers who have been successful with cost-saving operational reviews will better enable ministers and deputy heads not only to compile their individual cost-savings proposals but also to provide practical advice on what to look for and how to execute their plans," press secretary Heather Hume said in an email.

"As always, our government is committed to maintaining an open, fair and transparent procurement process while obtaining the best possible value for Canadians."

Hume declined to respond to further questions about the review, saying they are "cabinet processes."

Other firms invited to bid on the $20-million contract included Ernst & Young, IBM Canada, Bell Canada and Accenture Inc.