HART is farming out management of most of the rail project to consultants who cost upward of $500,000 a year per person. They sit inside HART’s office but a state audit questions their accountability.
Always Investigating pressed HART’s CEO on whether they’re getting what they’re paying for.
The state auditor unveiled the pricey consultant details in the second of a three-part report on the city project. On the one hand HART says it’s a market rate they need to pay to get experts. But HART’s CEO told me they hadn’t been getting enough in the way of expertise and management from the consultants until recent changes.
The state auditor showed how just about all of HART’s design and construction executives are staffed by contractor HDR Engineering, and it costs taxpayers $9.6 million dollars a year. Each one of the little blue boxes (see pages 8 and 9 of the audit) means it’s an HDR consultant embedded inside the HART office, and not a civil servant in the role.
“It jumps out to us that the top level of management, the one just below the CEO on the construction side, it’s all blue. It’s all consultants,” said state auditor Les Kondo. “It jumped out to us as ‘wow.’”
Wow because it costs taxpayers $505,000 annually per head, or $42,000 each every month on average for each of those blue boxes. It’s a practice even the Federal Transit Administration’s oversight process had called into question, saying that the costly farming-out of consulting and management services left HART with less ownership and accountability.
“We have a project that has almost doubled in cost yet whose accountable for delivering the project, is it HART or is it these consultants?” Kondo said. “They should transition some of these consultant employees, the embedded consultants to HART employees.”
HART’s CEO says you can’t get people for these jobs at civil-servant rates, and due to the finite end of their role when the building is done.
“We’re pretty much building one line, our main line,” said HART CEO Andrew Robbins. “So that really limits our ability to employ city employees, pay them the type of salaries the market suggests they should be paid.”
Always Investigating pointed out that what Robbins calls a one-off project is still years-long, and far from its target 2025 end of the building phase, and asked the HART CEO what would be entailed in cutting back on the cost of contracted management?
“That’s what I do on a regular basis quite frankly,” Robbins said. “I have made reductions in the overall administrative costs since I’ve been here.”
Both the auditor and the HART CEO pointed out that the half-a-million dollar rate per consultant includes salaries, benefits and other fringe costs.
“That’s typically 45 percent on top of just a straight wage,” Robbins said, “so it’s important to understand when the auditor reports the average cost per HDR employee, that’s an all-up amount.”
Always Investigating asked HART’s CEO: Even if it’s divided by half that’s still a quarter-million dollars per person; couldn’t HDR be giving HART a better rate?
“Well, we compete that contract,” Robbins said, “so this is really a market rate.”
Always Investigating asked, can HART make changes in the future?
“There certainly is an expiration date and we always have the ability to recompete it yes.”
We asked, what will HART be looking for in future consulting deals, now that so many details of that price per head are public?
“If we’re going to continue to use a consultant to provide personnel for us, what we also want to make sure is that they also provide their expertise,” Robbins said.
That wasn’t always the case among the embedded ranks raking in the big bucks for project management, but according to Robbins he has tried to crack down since coming on as CEO.
“We didn’t feel they were providing enough on the expertise side from an executive management standpoint,” Robbins said. “The good news is they have responded to that and we now are visited by their executive management on a monthly basis and they get involved with project management issues.”
Robbins said HART will whittle the number of consultants down between now and 2025, and that perhaps 10 to 20 percent of consultants could be transitioned to city employee rates and ranks.
Click here to read the full audit.
Click here to read the auditors summary.