Santa Clara KPMG Expenditure Raises Red Flags

Posted on March 12, 2017


Back in June of last year, I wrote a post regarding Santa Clara’s procurement practice titled “I Have Waited Nearly 10 Years For This To Happen . . . The Santa Clara Story“.

In that article, I drew comparisons between Virginia’s highly successful eVA program and the program that had been successfully implemented by the County.

However, when it came to light that the County had engaged KPMG to reexamine their procurement practices with the intent of making changes to the program, I could not help but wonder why? Especially since this assessment process would cost the County $1.3 million.

Given the above, I was eager to review all of the documents regarding the County of Santa Clara Procurement & Contracting Management Initiative including the related draft Charter, which I did.

For the sake of both clarity and context, I believe that when you are paid $1 million it should be based upon the value that you provide, as opposed to the time and resources that you expend.

Being devoid of any original or creative thought, KPMG’s output does not come close to justifying the $1.3 million price tag, let alone delivering to County taxpayers “the best value for the tax dollars expended.”

I would encourage you to obtain and review the documents that I have seen to decide for yourself if Santa Clara County spent the $1.3 million wisely. However, and based on not only my assessment but the assessment of other industry experts, KPMG’s findings are merely a derivative of the tired and archaic thinking that has made public sector procurement a punchline rather than a respected practice.

Unfortunately, the story does not end there.

Accessing public records, I have an advanced copy of the agenda for the March 14th, 2017 Board of Supervisors Regular Meeting. You can review the agenda through the following Board of Supervisors & Boards and Commissions link.

You will have to scroll down the document some but when your reach point 42, you will find the following:

County Executive
42. Consider recommendations relating to the Third Amendment to the Agreement with KPMG, LLP for consulting services.
Possible action:
a. Approve Third Amendment to Agreement with KPMG, LLP relating to providing consulting services for countywide contracting, increasing the maximum contract amount by $2,016,000 from $1,342,000 to $3,358,000, and extending the term of the Agreement for a six-month period through December 31, 2017, that has been reviewed and approved by County Counsel as to form and legality.
b. Approve Request for Appropriation Modification No. 172 – $2,016,000 transferring funds from the General Fund Contingency Reserve to the Office of the County Executive. (4/5 Roll Call Vote)
document Agreement/Amendment Printout
a. Attachment 1 – KPMG Third Amendment
b. Attachment 2 – Scope of Work Details
c. Attachment 3 – F85 No. 172 KPMG 3rd Amendment

The County is asking the board to approve a further expenditure of $2 million so that KPMG can provide “consulting services for countywide contracting” without any form of competitive tender.This would bring the total price tag for the KPMG engagement to $3.3 million.

Needless to say, I had to call the County to verify that what I was reading was indeed accurate.

Following a “no comment” response, which is never a good sign, the one refrain that I am hearing over-and-over again is “I wasn’t involved in the process.” Based on a preliminary investigation, it would appear that Santa Clara’s County Executive Jeffrey Smith is the driving force behind this multimillion dollar project.

SCC J Smith

I will be reaching out to Mr. Smith tomorrow morning to request an interview on the PI Window radio show. If granted an interview, one of the many questions, I will be asking, is why has the county bypassed a competitive bid process. In other words, and referring once again to the output that has been provided to date, why not open up the original KPMG findings to competitive review?

After all, if the KPMG work justifies an additional $2 million then shouldn’t it be able to stand the test of external scrutiny?

More on County Executive Smith:

CEO, doctor, lawyer: County executive Jeff Smith needs more business card space

In Year 2086 County Executive Jeff Smith Will Have Last Laugh

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