Four employees of a consulting firm billed more than $200,000 apiece in five months for work on a University of Wisconsin System information technology project, according to a review by The Associated Press (AP), fueling criticism of the university’s spending on a revamped payroll system.
Another 10 employees of Chicago-based Huron Consulting Group reportedly charged at least $100,000 during that time for services on the project, which is behind schedule and over its planning budget.
A review of invoices filed from January through May found all but three of 24 Huron employees who have worked on the project are charging $192 per hour or more, AP said, with top managers billing $342 per hour. One Huron official reportedly has billed $4,100, for 12 hours of work.
A past president of the Association of Information Technology Professionals said he and other IT workers with whom he spoke this week were "just shocked" at how much the firm is billing and said $150 to $175 per hour would be common for such work.
"I think the whole contract is a bad deal for Wisconsin taxpayers," said Larry Schmitz, a Menasha consultant who has worked in the industry for 35 years and helped install payroll systems for the U.S. Postal Service and several state governments. "It’s an open-ended commitment by the university to continue to pay Huron Consulting until Huron Consulting decides when they are done."
Huron’s rates are comparable, but somewhat higher, than what employees of consulting company Accenture charged the State Elections Board for developing a statewide voter database, according to AP. But Accenture’s payments were capped at $14 million through 2010, the wire service reported, while Huron’s contract does not set a ceiling or a cutoff date.
The rates are also much more than the state allows experts in PeopleSoft, the software being used, to charge for routine projects. The maximum payment for those projects is $190 per hour, while analysts make between $100 and $155 per hour.
UW System spokesman David Giroux said the project’s complexity justifies the higher rates. He said Huron was selected after a competitive bidding process.
"We’re talking about a massive undertaking and the kind of project where there are a very small number of companies in the nation that have the skill and expertise to do this," he said.
A Huron spokeswoman turned down several requests for comment on the project, which comes as spending on consultants is under intense scrutiny amid state budget problems.
UW employees with whom the consultants are working had a 2 percent raise taken away last month and will be furloughed for eight days this year. Meanwhile, the consultants’ rates are guaranteed to rise by 3 to 7 percent in January under their contract, AP reported.
"These contractor salaries are a slap in the face to public employees and all the sacrifices they are making," said Bryan Kennedy, president of AFT-Wisconsin, which is trying to organize UW System faculty and academic staff.
Huron is providing management support to UW employees trying to install a new system to track human resources information for its 60,000 employees. It’s a complicated project designed to consolidate dozens of disparate payroll programs into one.
The company’s rates, negotiated with UW officials before the contract was signed in January, do not represent an employee’s pay. They include costs for the employee’s salary and benefits, plus a markup.
The Huron employee who has worked the most hours on the project, at $272 per hour, has billed for $231,000 in fees and expenses through May, AP said.
Huron agreed to reduce rates by 5 percent when any employee reaches seven months on the project and to provide two analysts for four weeks without charge.
UW System President Kevin Reilly has said the current payroll system, in place since 1975, is increasingly unreliable. Its replacement will keep better data, give employees access to payroll information, and improve security for sensitive personal information, he told lawmakers last month.
A first attempt to replace the program failed in 2006 at a cost of $28.4 million.
Planning costs for the latest project have increased to $12 million, AP reported, or $4 million more than initially expected. A timeline and budget for implementation have not been released but are expected to be proposed to the Board of Regents in September. Neither Giroux nor the contract say how long Huron would be involved with the project.
Weekly status reports filed by the company blame a lack of UW staff for delays. UW System project director Lorie Docken said vacancies and reassigning enough employees has been a challenge but the "very complex, high-risk" project remained on track.
The Legislature last month included several provisions in the budget to cut the use of consultants by state agencies, but Gov. Jim Doyle vetoed them. Sen. Julie Lassa, D-Stevens Point, said she would revive the provisions in a separate bill.
University of Wisconsin
Huron Consulting Group