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New York firm gets $1 million contract to review ODOT

EO MEDIA GROUP - A New York company will conduct a review of the Oregon Department of Transportation.The state has awarded a nearly $1 million contract to New York-based McKinsey & Company to conduct a long-awaited management review of the Oregon Department of Transportation before lawmakers approve a transportation package in 2017.

State officials in late July nixed a previous contract with John L. Craig after revelations about his close ties with ODOT and an unearthed email showing he had sought to replace the agency’s director.

Lawmakers have said they want an independent, third party review to ensure that ODOT is operating efficiently before they approve a transportation package in 2017. That legislation — one of Gov. Kate Brown’s priorities as governor — could hike gas taxes and fees on drivers and funnel hundreds of millions of dollars in additional funding to the agency.

In an effort to get a review started before the 2017 session, the Department of Administrative Services launched an emergency process for selecting a new contractor. DAS reached out to several firms with experience in management reviews and received proposals from McKinsey and Boston Consulting Group, said Matt Shelby, a DAS spokesman.

Brown selected McKinsey based on the recommendations of the DAS procurement team, said Bryan Hockaday, a press secretary in Brown’s office.

“McKinsey had the most responsive proposal, and they are a national company recommended for their expertise,” Hockaday said.

McKinsey has about a month to deliver an initial work plan for the review, Hockaday said. The contract is technically scheduled for completion Feb. 28, but may be extended by either party with 30 days' notice.

“My understanding is that there is no timeline," said Rep. Cliff Bentz, R-Ontario, co-vice chairman of a legislative committee charged with crafting the transportation package. "The most important thing is to have a complete and comprehensive audit and not have it hurried or rushed or some slap-dash thing that doesn’t answer all of the questions that we want to have answered.”

“It is an expensive audit, just slightly under $1 million but ... this a multi-billion dollar agency," Bentz said. "It’s going to require a significant amount of work. The instructions given to the auditor are detailed and thoughtful and it’s going to take considerable time to produce a product that will help us make decisions about the agency, so I am happy for the focus on quality and not expediency.”

Craig, who won the original $350,000 contract to do the review, oversaw the agency’s $1.3 billion outsourced bridge repair and replacement program for six years. He stepped down as program manager of Oregon Bridge Development Partners just 15 months ago.

After questions arose whether Craig’s connections with ODOT employees presented a conflict of interest, a transportation commissioner dug up an old email from Craig in which he appeared to be seeking agency Director Matt Garrett’s job.

Tammy Baney, chairwoman of the Oregon Transportation Commission, received the job solicitation email from Craig in January.

She said she didn’t read the entirety of its contents until after Craig landed the contract for the ODOT review, when she recalled he had previously reached out to her. After reading the email in July, she recommended that state officials revoke his contract.