Did High-Speed Rail help consultants "manipulate" a bid to win a lucrative contract?
Summary
The California High-Speed Rail Authority awarded a $24 million consulting contract to KPMG, despite knowing KPMG’s plan to charge much higher rates than their initially low bid. KPMG billed taxpayers about $2 million more in four months than their bid indicated, leading to questions about bid manipulation and consultant spending.Key Facts
- KPMG’s winning bid proposed average hourly rates around $200 but billed more than double that after winning the contract.
- The contract totaled $24 million over four years; nearly half was spent in the first year.
- KPMG lowered hourly rates for higher-level employees in its bid but charged much higher rates for lower-level staff on actual bills.
- A competing bidder protested, accusing the rail authority of allowing KPMG to manipulate the bid to win.
- No single KPMG invoice reviewed showed billing at the low $35 hourly rate promised for certain positions.
- The rail project has faced delays and lost $4 billion in federal funding partly due to missed deadlines.
- KPMG executives and the rail authority have not fully responded to requests for comment.
- The project is expected to run out of money by 2027 while continuing to spend large amounts on consultants.
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