SPR 27-702: Improving Transparency and Accountability in Consultant Fee Proposals

Fee proposals list the number of hours consultants intend to have personnel work on a project and their associated fees. These proposals document contract negotiations with KYTC. Although personnel assignments documented in a signed contract should accurately reflect the consultant’s anticipated division of labor, post-project audits have routinely documented instances of negotiated hours (and costs) diverging significantly from what personnel actually logged. Usually this takes the form of low-level staff (e.g., EITs, technicians) with modest hourly cost rates working more hours than were negotiated, while more experienced and expensive personnel (e.g., project engineers, highway designers) tally fewer hours. Left un-checked, this dynamic imposes financial risks on the Cabinet and sets precedents that will reverberate through future contract negotiations. Long-tenured KYTC staff have the experience and insights required to minimize these organizational risks, however, impending retirements will leave behind tremendous knowledge gaps that could weaken the agency’s ability to hold consultants accountable.