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HP $55 Million Settlement with U.S. DoJ for Alleged Procurement Process Violations Highlights Stiff Penalty for Denial of Allegations Monadnock Research (VIII N39) - 3 September 2010 MR - The U.S. Department of Justice (DoJ) has reached an agreement with Hewlett-Packard where HP will pay $55 million to settle allegations that it defrauded the General Services Administration (GSA) and other federal agencies. Previous guidance by HP estimated the amount at $47 million. HP has denied that it violated any laws in its settlement. The agreement, and the recent $87.5 million settlement involving EMC in an associated case, highlights the stiff penalty the DoJ is imposing on firms when they deny their failure to comply with Federal procurement guidelines for products and services. Research Note includes: HP settlement details; Summary of allegations and settlements involving numerous other consulting firms in associated litigation; Copies of civil complaints, related documents, and results of government study on whistle-blower lawsuits. (1,515 words) . . . More Capgemini to Purchase 55 Percent of Brazil's CPM Braxis for €233 Million Monadnock Research (VIII N38) - 2 September 2010 MR - Capgemini has reached an agreement with the shareholders of Brazil's CPM Braxis to acquire a 55 percent interest in the consulting and IT services firm for 517million BRL (€233 million). Capgemini also has an option to buy the remaining 45 percent within 5 years. CPM Braxis is the largest Brazil-based IT services firm, serving more than 200 major domestic and international clients, with a concentration in financial services, telecom, manufacturing, and utilities. The deal will allow Capgemini to expand its presence in Brazil to around 6,200 from approximately 700 today. (1,055 words) . . . More CSC Completes Acquisition of Bass & Company Monadnock Research - 30 August 2010 MR - Computer Sciences Corp. (CSC) has closed the acquisition of Bass & Company, a privately-owned strategy and operations consulting firm providing services to clients in electric, gas, and water utilities. CSC says the acquisition will help it better serve global utility clients and supports its strategic industry growth plan to expand the firm's relationships with clients in chemicals, energy, and natural resources. Bass had clients in the U.S. and Europe, allowing CSC to expand its relationships in these sectors globally. Mike Bassignani, will lead CSC's Global Utilities Division, reporting to Bob Welch, president of CSC's Chemical, Energy, and Natural Resources Group. (230 words) . . . More Marin County Push to Replace Problematic SAP Implementation May be Premature Monadnock Research (VIII N37) - 27 August 2010 MR - California's county of Marin has completed a study that recommends the County cut its losses on what it views as a failed SAP implementation, and to pursue "New ERP System" options. But Marin may want to step back and take a closer look at the findings of the report it is using to support that conclusion. An 11 page document published by Marin's Information Systems and Technology group, including findings from independent consultancy Phoenix Business Consulting, concludes that any of the options that involve keeping SAP would be more costly than throwing it out and starting over. Analysis of those findings, however, appears to offer clues into apparent unrealistic expectations similar to what got Marin into its current predicament. This is the same system at the center of a dispute that resulted in a $30 million civil fraud action filed by Marin County against Deloitte Consulting in June. Research Note includes analysis of report findings and report PDF. (1,795 words) . . . More Deloitte UK Fiscal 2010 Consulting Revenues Down 4 Percent to £459 million Monadnock Research - 26 August 2010 MR - Deloitte's U.K. business has reported revenues of £1,953 million for the year ended 31 May 2010, down just under 1 percent, or £16 million below fiscal 2009 levels. Profits were £590 million and £873,000 per partner. Consulting segment revenues were £459 million, down by 4 percent. The impact of the recession was felt most in the fist part of Deloitte's fiscal year. The second half showed improved results, especially in financial services. The manufacturing sector also showed strong growth, and there were significant new engagements in technology and media. Enterprise cost reduction was the leading service area across all industries, showing that clients remain fixated on the cost side of the business. Risk and regulatory consulting were strong, especially services associated with Solvency II legislation. Deloitte expects growth across most industry areas in fiscal 2011, but anticipates challenges in government and public services. (588 words) . . . More Consulting Client Insights: Vault Top 50 Consulting Firms Monadnock Research (VIII N36) - 24 August 2010 Vault has just published its latest list of the top consulting firms, the "Vault 2011 Consulting 50." This year's ranking is not based strictly on the "prestige" factor, which is a ranking of perceptions by consultants of firms other than the one they work for. That listing is still published, but as a separate ranking. Vault's overall 2011 ranking weighs culture, work/life balance; compensation; prestige; business outlook; and transparency. While the Vault rankings might help firms with their college recruiting efforts, the utility for clients is limited. But taking a contrarian view provides some interesting perspective. This Research Note offers insights into what clients can learn from these rankings, and why high scores in some categories aren't necessarily good for your business or your project. The top 10 firms for the current ranking are: (1) Bain, (2) BCG, (3) McKinsey, (4) Analysis, (5) Cambridge Group, (6) Deloitte, (7) Oliver Wyman, (8) A.T. Kearney, (9) Triage, and (10) Conseo. (2,210 words) . . . More Diamond to be Acquired by PricewaterhouseCoopers for $378 Million Monadnock Research (VIII N35) - 24 August 2010 MR - PricewaterhouseCoopers LLP has entered into a definitive merger agreement where it will acquire all of the outstanding shares of Diamond Management & Technology Consultants for $12.50 per share in an all-cash deal. The transaction represents a premium of 31 percent to Diamond's closing share price of $9.54 on 23 August, valuing Diamond at around $378 million. The acquisition is expected to be completed in the fourth quarter, pending shareholder approval and anti-trust clearances. The deal has already been approved by the boards of both firms. Diamond will be absorbed within PwC's Advisory group following the acquisition. (Research Note includes acquisition details; Diamond client industries, service areas, and geographical focus; staffing and operational metrics; transaction risks and motivation; PwC/Diamond Merger Agreement; and MR consulting client perspective. 1 chart. 1,600 words) . . . More URS Settles Minneapolis Bridge Collapse Litigation Monadnock Research (VIII N34) - 23 August 2010 MR - Survivors and those who lost loved ones when the Minneapolis I-35W bridge collapsed have settled their cases against URS Corp., a multinational engineering services firm. URS says the entire $52.4 million settlement will be paid by its insurance carriers. The families sued URS asserting negligence when it failed to properly evaluate the bridge's structural integrity after being hired by the State of Minnesota to provide engineering services. The settlement includes a provision that URS will contribute $1.5 million toward the construction of a memorial honoring those who died. According to the Associated Press, the settlement calls for $48.6 million of the funds to go to victims. Robins, Kaplan, Miller & Ciresi (RKMC) led a team of 17 law firms in Minnesota representing 103 clients. RKMC says that more than 130 of its attorneys and staff contributed over 20,000 hours pro bono in the last 3 years on related cases, making it the largest pro bono effort in the firm's history. (Research Note includes copies of 3 original complaints and exhibits; 1,200 words) . . . More UK's Independent Offers Scathing Editorial on Management Consulting Practices Monadnock Research (VIII N33) - 20 August 2010 MR - Johann Hari has offered a scathing report of management consulting in an opinion piece in the UK's Independent entitled, "The management consultancy scam." We cite it here to offer a heads-up to readers that might find themselves fielding questions about the assertions proffered by Hari as notorious norms, and not isolated examples of dubious firm practices. The Hari piece quotes "Ripoff" author David Craig and "Management Myth" author Matthew Stewart. The article also refers to Craig's recommendation that clients should tie fees to outcomes. MR's perspective reiterates highlights of our past recommendations and what to look out for with performance-based alternative fee structures, and how to structure those agreements. (440 words) . . . More Apple Global Supply Manager and Accomplice Indicted in Alleged $2.5 Million International Kickback Scheme Involving Six Suppliers Monadnock Research (VIII N32) - 19 August 2010 MR - Paul Shin Devine, a California-based Apple Computer Global Supply Manager, and Andrew Ang of Singapore, were charged in a 23 count indictment that alleges the two orchestrated a procurement kickback scheme. Devine worked on the side as a consultant, most recently through his consultancy CPK Engineering, selling trade secrets and favorable treatment to prospective Apple suppliers. One of Devine's alleged clients, Cresyn Co. of South Korea, claims that it was under the impression its consulting agreement was directly with Apple. Devine, who is facing wire fraud and conspiracy charges and lives in Sunnyvale, Calif., was arrested and made his initial appearance in U.S. Federal Court on 13 August. In addition to wire fraud and conspiracy, the grand jury charged Devine with money laundering and engaging in monetary transactions with criminally-derived property. The alleged kickback scheme dated back to February 2007 or before, through August 2010. The charges hold stiff penalties for Devine, which could be up to 430 years in prison, $6.75 million in fines, and additional restitution and damages realized by Apple. (Research Note includes copy of complaint. 710 words) . . . More Consulting Leadership News: Bain, CSC, Lodestone, Trianz, Navigant, and Mercer Monadnock Research - 19 August 2010 MR - Bain Partner joins South Africa leadership team. CSC appoints President of Business Development for North American Public Sector practice. Lodestone names Partner to lead new Paris office. Trianz appoints Vice President of Management Consulting. Navigant Appoints Two Managing Directors and Two Directors in Energy Practice. Mercer appoints principal and new team to launch new UK investment consulting business; Leader of new Edinburgh-based Financial Strategy Group. (1,435 words) . . . More FTI Completes Transaction Acquiring FS Asia Advisory Monadnock Research - 19 August 2010 MR - FTI Consulting has completed its acquisition of FS Asia Advisory Limited of Hong Kong. FTI says the acquisition is intended to significantly expand its presence and breadth of capabilities in Asia. FS Asia Advisory ("FS") was founded in 1985 and has operations in Hong Kong, Shanghai, Singapore and Manila, providing services in the areas of corporate finance, restructuring and turnaround, corporate advisory, and corporate recovery services. (485 words) . . . More Hewitt to Acquire EnnisKnupp; Sets Meeting Date for Vote on Aon Merger Monadnock Research - 14 August 2010 MR - Hewitt Associates has entered into an agreement to acquire EnnisKnupp, a leading provider of investment advisory services to large institutional investors. The deal will more than double Hewitt's existing investment consulting clients and supports its global expansion plans. EnnisKnupp provides a range of investment consulting services to corporations, public funds, endowments, foundations, non-for-profits, and Taft-Hartley plans. Hewitt stockholders of record at the close of business on 16 August 2010 are entitled to vote on Hewitt's proposed acquisition by Aon at a special meeting now scheduled for 20 September 2010 at Hewitt's corporate offices in Lincolnshire, Illinois. (800 words) . . . More U.S. Feds Demand Qualified Transparency for Consultancy Executive Compensation Monadnock Research - 14 August 2010 MR - The U.S. Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have issued an interim rule amending a federal regulation mandating the U.S. Office of Management and Budget (OMB) to establish a free, public, website containing full disclosure of all Federal contract award information. The rule requires contractors to report executive compensation and first-tier subcontractor awards on contracts expected to be $25,000 or more, except classified contracts, and contracts with individuals. (275 words) . . . More Unprecedented Public Sector Deficits Demand New Approach to Government Finances in Major Economies KPMG and Oxford Economics - 14 August 2010 KPMG and Oxford Economics - A rethink of the way that governments operate, combined with tough cuts to public budgets, is critical if Western industrialized economies are to reduce the major public sector deficits they have incurred in dealing with the recession, a new study from KPMG International and Oxford Economics has found. The KPMG/Oxford Economics study found that maintaining status quo, with current government fiscal policies left unchanged, G7 deficits could reach as much as 200 percent of GDP over the next 10 years and over 300 percent in Japan. (1,165 words) . . . More Ernst & Young Launches Capital Advisory Affiliate Monadnock Research - 13 August 2010 MR - Ernst & Young LLP has launched an affiliate, Ernst & Young Capital Advisors, LLC (EYCA), a newly formed broker-dealer. EYCA joins the global network of Ernst & Young firms, offering a broad range of transaction and capital advisory services, including capital structure advisory, capital raising, restructuring, and special situations finance to middle market and larger corporate clients as well as creditors and other investors. Several members of the team join E&Y from Bank of America Merrill Lynch. (513 words) . . . More Computer Associates Buys Virtualization and Cloud Consultancy, 4Base Monadnock Research - 12 August 2010 MR - CA Technologies has acquired privately-held 4Base Technology, a virtualization and cloud infrastructure consulting firm. Terms of the transaction were not disclosed. According to CA, 4Base will become its Virtualization and Cloud Strategy practice within CA Services. (400 words) . . . More KPMG Acquires Performance Management and Business Intelligence Consultancy, Analitica Monadnock Research - 12 August 2010 MR - KPMG's Performance and Technology (P&T) Advisory group has acquired Analitica, a leading Business Intelligence (BI) and Enterprise Performance Management (EPM) consulting firm. The company will be absorbed into KPMG BI practice within its P&T group. The acquisition enhances KPMG's expanding advisory arm, while accelerating the company's goal to become a major player in Hyperion Planning implementation, where Analitica's has particular expertise. (310 words) . . . More British Gas Key Issues Upheld On Accenture Appeal Monadnock Research (VIII N31)- 10 August 2010 MR - GB Gas Holdings Limited (Centrica) received favorable rulings on 7 of 8 preliminary issues on appeal by Accenture from lower U.K. Commercial Court rulings on contractual language interpretations and issues to be heard at trial. The appeals court also found that nothing much was likely to turn on the difference between its interpretation and that of the lower court on the issue found in favor of Accenture. The net affect of the contract language interpretations upheld is that material defects could combine to create a "Fundamental Defect" that would trigger greater Accenture liability, if proven. The case is scheduled to begin on 3 October 2011. Centrica filed its £182m lawsuit on a problematic SAP implementation in May 2008. Research Note includes case background and analysis of issue not upheld on appeal, and court decisions. (930 words) . . . More Tetra Tech Acquires EBA Engineering Consultants Monadnock Research - 9 August 2010 MR - Tetra Tech has acquired EBA Engineering Consultants, Ltd. (EBA), a privately held scientific and engineering services firm with more than 600 employees and 10 offices located in northwestern Canada, bringing Tetra Tech's Canadian workforce to about 1,800. The firm provides services in the areas of natural science, engineering, and arctic engineering to the mining, energy, and related infrastructure sectors. This is Tetra Tech's second major acquisition in Canada, following the purchase of Wardrop Engineering in 2009. EBA will join Tetra Tech's Environmental Consulting Services practice, and will operate as a wholly owned subsidiary. (315 words) . . . More More News More Research Notes More Firm Research