MPI dissatisfied with consultant on IT project, NDP says

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This article was published 17/05/2023 (887 days ago), so information in it may no longer be current.

Manitoba Public Insurance raised concerns internally about work done by global consulting giant McKinsey and Company to deliver the auto insurer’s troubled Project Nova via a nearly $10-million untendered contract, according to documents released by the Manitoba NDP.

The two-page, internal email correspondence from March 15, 2023, was tabled by Opposition Leader Wab Kinew Wednesday.

The document, redacted partly by the NDP, contains the subject line “Align on next steps RE: McKinsey” and summarized management discussions on the consultant’s progress on Project Nova as well as options and next steps proposed by officials to address shortcomings with McKinsey’s work.

Names and other identifying information in the email were redacted.

Based on the email, MPI officials felt McKinsey was not following industry best practises in its work for the corporation and suggested a meeting with the consultant to “share feedback one more time” and to request a corrective action plan.

The firm was first hired to help deliver MPI’s massive, $290-million technology modernization project in September 2021 under a $2.3-million, untendered contract for a diagnostic assessment of Nova.

In February 2022, MPI awarded McKinsey a second, untendered six-month contract to oversee Nova, and extended that contract for a six-month period in October, for a total contract valued just under $10 million.

According to the correspondence, McKinsey was said to have failed to document key decision points to achieve goals, and align to MPI’s regulatory and legislative requirements. It was recommended to document “facts of misses against the contract.”

In question period, Kinew accused the Progressive Conservative government of pressuring the Crown corporation to pay McKinsey, despite concerns identified in the email, in order to wind down its contract with the consulting giant.

“This e-mail chain that I’m sharing with the public today shows that there are very serious concerns about the lack of work that McKinsey has done to earn that $12 million,” Kinew said.

“This is an issue that’s costing Manitobans money,” he said.

Premier Heather Stefanson said the Tories have taken action to address concerns the government has had at MPI related to untendered contracts, executive staff turnover, financial projections, hiring plans and other issues identified by the Public Utilities Board.

“We have made a directive to (MPI) to ensure that there’s a competitive process when it comes to procurement of goods and services at MPI,” Stefanson said. “There’s been a number of other directives that have taken place to ensure that we’re moving in the right direction, and we’ve also asked for an external organizational review to take place as well.”

Under the procurement directive, MPI requires ministerial approval to amend an agreement for goods or services that was a direct award. According to an access to information request released by the NDP, McKinsey had been paid $3.3 million under the February 2022 contract as of March 29, 2023.

In a statement, MPI communications manager Kristy Rydz said it’s unfortunate day-to-day internal discussions are being made public “without full context of the situation.”

“The work ultimately provided by McKinsey met MPI’s requirements, and we are extremely satisfied with the outcomes of McKinsey’s advice and its support in delivery of Release 3 pre-discovery,” Rydz said, referring to the phased approach to rolling out the consumer products that make up Project Nova.

She explained that not long after work on the latest phase began, MPI management met to discuss questions related to McKinsey’s recommended approach to the job.

“Discussions of this nature are part of the normal course of business and are critical to vendor management,” she said, noting McKinsey provided services that contributed to successful launches of earlier and upcoming product releases.

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“MPI is proud to deliver value for Manitobans and is committed to completing Project Nova on time and on budget,” Rydz said.

Justice Minister Kelvin Goertzen, who is responsible for MPI, was not in the chamber for question period Wednesday.

In a statement, a spokesperson for his office said the Manitoba government was not part of the communications tabled by the NDP.

“This is an internal MPI issue,” the spokesperson said. “The contract is between MPI and the service provider, not the Manitoba government.”

danielle.dasilva@freepress.mb.ca