SEC Dumps Millions on Consultants

And critics say it's not getting its money's worth

By Kevin Spak,  Newser Staff

Posted Mar 1, 2012 11:31 AM CST

(Newser) – The Securities and Exchange Commission is, by its own admission, something of an organizational mess right now, so it's done what many corporations have done: called in consultants. In less than a year, the SEC has spent more than $8.5 million on consultants, Reuters reports, hiring first the Boston Consulting Group to suggest reforms, and then Booz Allen Hamilton to follow up on it. Contractors for the companies make as much as $300 an hour, and some critics are questioning whether the SEC is getting its money's worth.

The consultants were hired by the commission's new (and first) chief operating officer, Jeff Heslop, who says he had no choice. "It wasn't like we had a bench of people we could turn to." But critics like Sen. Chuck Grassley think hiring a consultant to implement another consultant's work is a troubling sign. And some are concerned about how the contract was awarded; sources say Heslop tried to expand Booz Allen's contract by millions of dollars without opening it to new competition.

Securities and Exchange Commission Chairman Mary Schapiro is seen testifying on Capitol Hill in this file photo.
Securities and Exchange Commission Chairman Mary Schapiro is seen testifying on Capitol Hill in this file photo.   (Getty Images)
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Why in the world are we bringing all of these Booz Allen folks in here and paying them all of this money to do this work when Jeff Heslop should be able to figure out how to do this? - An anonymous SEC employee
who is familiar with the contract

Spending less than 1% of the budget to rebuild an infrastructure that has serious flaws is not very much money, but the question is what are they getting for the money they are spending? - Jonathan Katz, former SEC secretary

We definitely have tangible, hard saves that can offset this $8 million. - Jeff Heslop, noting that Booz Allen has already identified a wireless card program that cost $43 a month that wasn't being used, and a little-used shuttle service that cost $14,000 a month

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