How McKinsey is making $100m and counting) advising the US government’s coronavirus response

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For the world’s best-known corporate-management consultants, helping tackle the pandemic has been a bonanza. It’s not clear what the US government has gotten in return.

that McKinsey had refused to comply with an audit. Instead, the firm went over the head of a contracting officer and found a GSA supervisor who was willing to accommodate the firm. That supervisor worked with McKinsey to improperly inflate the contract prices, the investigators found, part of a troubling pattern of favoritism the supervisor showed toward McKinsey.

The fallout devastated the firm’s U.S. public-sector practice, current and former consultants say. “The public-sector practice was already underutilised after the [GSA] report,” one of them said. “And then it just stopped.” So dependent that McKinsey consultants on the FEMA-HHS task force ended up working in the procurement process, according to a federal official briefed on the task force’s work. That was unfamiliar terrain for the McKinseyites. Crucial medical supplies from surgical masks to ventilators were scarce and the government had solicited offers from any vendors claiming to have access to the necessary supplies.

McKinsey consultants struggled to understand the complicated government procurement rules, according to the federal official. The career procurement officers found themselves rejecting what seemed like every other offer forwarded by the consultants and other task force members, because they ran afoul of various rules. “Even though a career employee can spot the problems quickly, you still have to stop doing your regular procurement work,” the official said. “That delays the whole process.

 

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