Should Governments Pay Procurement Consultants $4.5-6K+ per day?

Spend Matters UK/Europe introduced and has been closely following a story examining how Alix Partners, a turnaround and operational consulting firm better known in the US market than Europe, was able to convince the MOD (Ministry of Defence) in the UK to pony up some serious cash in a no-bid situation -- some £12M (nearly twenty million US bucks). Our trusty UK Correspondent, Peter Smith, suggests in one of his latest posts tracking this no-bid tender that the MOD has responded to Spend Matters requests into the matter. Read between the lines of the story as you wish, but the MOD apparently suggests that they're no US government agency or department procuring the services of Blackwater or Halliburton without a competitive process.

Specifically, "it wasn't technically a single-tender, MOD tell us," yet "it was awarded without open advertising, under the 'negotiated procedure without prior publication of a contract notice' but 3 potential providers were interviewed before choosing Alix." Peter provides further insight into the news when he clears up any speculation that "MOD also tell me that the 'previous colleagues' connection between an MOD executive and an Alix Partners senior guy that we previously referred to is pure coincidence -- we have no reason to disbelieve that, as they both worked at a huge global firm." Right.

Perhaps after all of the response rhetoric -- you've got to read the pudgy excuses that the MOD provided to Peter, they're hilarious -- it may sound like "less dodgy" of a tender. Yet what's most interesting is that the MOD refused to comment on the alleged day rates they're paying -- "our information being that Alix are charging £3-5000 a day plus bonus." The MOD suggests that this information is "commercially confidential" which, if I were a UK citizen, would have me up in arms knowing that Alix are charging more than typical blended rates for McKinsey and AT Kearney, two of the most expensive (and experienced) firms in the supply management space. Cleary, Britain's austerity programs don't extend into the MOD procurement transformation and sourcing/category strategy programs!

Jason Busch