Consultants’ costs coming
Nalcor making changes to disclose more information about Muskrat Falls embedded contractors
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.