Con­sul­tants’ costs com­ing

Nal­cor mak­ing changes to dis­close more in­for­ma­tion about Muskrat Falls em­bed­ded con­trac­tors

The Aurora (Labrador City) - - EDITORIAL - BY JAMES MCLEOD

Nal­cor En­ergy says it will re­write all con­sul­tant con­tracts to im­prove trans­parency on the Muskrat Falls project.

Last week, the Crown com­pany pro­vided more in­for­ma­tion about the hun­dreds of “em­bed­ded con­trac­tors” who make up the over­whelm­ing ma­jor­ity of the Muskrat Falls project man­age­ment team.

On av­er­age, each em­bed­ded con­trac­tor costs Nal­cor $908 per day for Lower Churchill project (LCP) man­age­ment ser­vices, although the ac­tual daily rates fluc­tu­ate sig­nif­i­cantly.

At the low end, an ad­min­is­tra­tive as­sis­tant work­ing on the project costs $187.92 per day. At the top end, a “spe­cial­ist” costs the com­pany $2,360 per day, on av­er­age.

The Muskrat Falls project is be­hind sched­ule and bil­lions of dol­lars over bud­get.

Ear­lier this year, The Tele­gram filed a se­ries of ac­cess to in­for­ma­tion re­quests try­ing to get a bet­ter un­der­stand­ing of the hun­dreds of em­bed­ded con­trac­tors who make up about 90 per cent of the Muskrat Falls project man­age­ment team.

These work­ers have Nal­cor email ad­dresses, and in some cases they have sign­ing author­ity to au­tho­rize Nal­cor spend­ing, but be­cause they’re not tech­ni­cally Nal­cor em­ploy­ees, they don’t show up on rou­tine salary dis­clo­sure lists.

Nal­cor re­fused to tell The Tele­gram how much in­di­vid­ual con­trac­tors get paid, and re­fused to pro­vide the names of the com­pa­nies that ac­tu­ally em­ploy the con­trac­tors.

Since then, The Tele­gram has ap­pealed the case to the prov­ince’s in­de­pen­dent Of­fice of the In­for­ma­tion and Pri­vacy Com­mis­sioner. As part of that ap­peal process, Nal­cor pro­vided some ad­di­tional in­for­ma­tion, and re­vealed it is tak­ing steps to pro­vide greater trans­parency.

“Presently, this is as much in­for­ma­tion as Nal­cor can pro­vide, how­ever, be­gin­ning in 2018, Nal­cor has de­cided to in­clude a clause in all new con­tracts and con­tract re­newals for project man­age­ment ser­vices (which in­cludes all con­trac­tors on the LCP) that will en­able re­lease of con­trac­tor rates,” ac­cess and pri­vacy of­fi­cer Suzanne Hol­lett wrote in an email. “This will pro­vide com­plete trans­parency on this is­sue on a go-for­ward ba­sis.”

In­di­vid­ual em­bed­ded con­trac­tors aren’t nec­es­sar­ily pock­et­ing thou­sands of dol­lars per day. In some cases, the con­trac­tors are one-per­son cor­po­ra­tions where the in­di­vid­ual con­sul­tant would get all the money. In other cases, com­pa­nies known as “body shops” hire out their em­ploy­ees to work as em­bed­ded con­trac­tors, pro­vid­ing short-term project man­age­ment help. In those cases, the com­pany takes a profit mar­gin.

But ac­cord­ing to in­for­ma­tion pre­vi­ously pro­vided to The Tele­gram, many of the Nal­cor em­bed­ded con­trac­tors have been work­ing full-time on the project for years.

As of Septem­ber, 178 em­bed­ded con­trac­tors had been em­ployed con­tin­u­ously by Nal­cor for at least four years.

The Tele­gram sub­mit­ted an in­ter­view re­quest to Nal­cor for this story, but re­ceived no re­sponse by dead­line. With­out fur­ther ex­pla­na­tion, it’s not clear why Nal­cor is wait­ing un­til 2018 to start chang­ing con­sul­tant con­tracts to al­low for more pub­lic dis­clo­sure.

It’s also not clear whether there will be any changes made so the pub­lic can know which com­pa­nies em­ploy these con­trac­tors, giv­ing a clear sense of who the money is ac­tu­ally go­ing to.

The lim­ited data Nal­cor pro­vided this week does shed light on the ex­pense as­so­ci­ated with em­bed­ded con­trac­tors. The six ad­min­is­tra­tive as­sis­tants hired as em­bed­ded con­trac­tors cost, on av­er­age, $309.75 per day.

Most of the job cat­e­gories are suf­fi­ciently vague that the ag­gre­gated data doesn’t pro­vide a lot of clar­ity. For ex­am­ple, Nal­cor em­ploys 24 peo­ple who are sim­ply cat­e­go­rized as “man­age­ment” at an av­er­age cost of $1,220.35 per day.

The five peo­ple who are clas­si­fied as “in­spec­tor” get an av­er­age of $634.34 per day and the 25 peo­ple who are clas­si­fied as “se­nior in­spec­tor” cost Nal­cor an av­er­age of $903.20 per day.

The sin­gle big­gest cat­e­gory of em­bed­ded con­trac­tor is “in­ter­me­di­ate en­gi­neer,” which in­cludes 36 peo­ple who cost Nal­cor, on av­er­age, $723.57 per day. Mean­while, 13 ju­nior en­gi­neers cost an av­er­age of $434.15 per day and 23 se­nior en­gi­neers cost an av­er­age of $1,005.88 per day.

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