Lawmakers select first choice for state consulting contract

Kansas lawmakers have named their first choice for a state consulting contract worth $3 million.

The Legislative Budget Committee on Friday voted to begin negotiations with Alvarez & Marsal Public Sector Services. David Javdan, the firm’s managing director, described it as a “turnaround firm” when speaking to lawmakers.

“We don’t write pretty reports that sit on the shelf. We implement and execute,” Javdan said.

Lawmakers called for an efficiency study of state government during a session in which they filled a massive budget shortfall by increasing taxes and cutting spending.

Alvarez & Marsal conducted an efficiency study for the state of Louisiana last year.

The firm has also worked with North Carolina, Puerto Rico and the New Orleans schools system, Javdan said.

Rep. Ron Ryckman Jr., R-Olathe, who co-chairs the committee, said lawmakers “appreciated their breadth of experience and expertise in a few areas that are our main cost drivers.”

“The social services and Medicaid piece was a place were they stood out. They had extensive work, expertise and experience in K-12 funding and they had a good knowledge of understanding of the transportation system as well,” Ryckman said. “They did a lot of work in Louisiana in both their education and social services.”

The materials that Alvarez and Marsal submitted to lawmakers Friday boasted that the firm delivered more than $500 million in savings to Louisiana.

A 2014 report from the New Orleans Times-Picayune said the firm’s $4.2 million contract with Louisiana required it to find $500 million in savings. It also said that many of the firm’s recommendations, including closing 18 motor vehicle offices, were controversial among Louisiana lawmakers.

The Kansas contract won’t have a specific dollar benchmark the firm needs to meet, Ryckman said.

The firm also handled the bankruptcy of financial services giant Lehman Brothers, collecting more than $657 million in fees, according to a 2013 CNN report.

Alvarez & Marsal has offices in Kansas City, London, Hong Kong and Sao Paulo. Their selection is not yet final, pending negotiations.

Lawmakers reviewed bids Thursday and Friday from four companies for the contract to perform an efficiency audit on the state government. Part of the sessions were open to the public but the bulk of the meeting time was closed.

That decision drew criticism from the Kansas Organization of State Employees and the Kansas Press Association. Ryckman said the decision to close portions of the meetings was bipartisan and allowed by statute. He said it was done to protect proprietary information of each firm.

“We would love to have it all done in a normal committee process, but due to the sensitivity of the materials it couldn’t happen,” he said.

This story was originally published September 18, 2015 at 4:06 PM with the headline "Lawmakers select first choice for state consulting contract."