Higher education

Deloitte suing Iowa Board of Regents to keep records secret

Former consultant wants to keep it from releasing documents

Rick Ferraro of Deloitte Consulting LLP responds to a question at a University of Iowa Town Hall meeting in Iowa City on Thursday, October 9, 2014.  (Adam Wesley/The Gazette)
Rick Ferraro of Deloitte Consulting LLP responds to a question at a University of Iowa Town Hall meeting in Iowa City on Thursday, October 9, 2014. (Adam Wesley/The Gazette)

A consulting firm hired by the Iowa Board of Regents to conduct an efficiency review of its three public universities is suing the board to keep it from releasing documents and trade secret information it considers confidential.

Deloitte Consulting LLP, along with McKinsey & Company, Inc. — a separate consulting firm that submitted materials in hopes of landing the efficiency review job — are scheduled to take the board to trial Aug. 17.

The issue stems from a Dec. 29 open records request filed by The Gazette with the Board of Regents for copies of responses to the board’s call for help implementing several efficiencies.

“Deloitte Consulting’s proposals contain Deloitte Consulting’s confidential, proprietary, trade secret information which would cause harm to Deloitte Consulting if publicly disclosed,” according to court documents.

The board in 2014 launched its review and hired Deloitte to undertake the first portion, which involved identifying efficiencies and savings at University of Iowa, Iowa State University, and University of Northern Iowa. Based on that initial phase, which produced a list of possible efficiencies, the board in November issued a call for help implementing the suggested changes, and both Deloitte and McKinsey responded. Neither were chosen for the jobs.

In its request for proposals from consulting firms, the board warned applicants that all responses would be considered public unless a firm specifically requested confidentiality, explained why something should remain confidential, and provided contact information for further questions, according to court documents.

Deloitte, in court filings, said it did that by marking confidential and trade-secret information in its application — including pricing information, proprietary methodology, and client information — and providing an explanation. Officials with McKinsey said they did the same, according to court documents.

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“McKinsey goes to great lengths and takes protective measures to ensure the confidentiality of its highly sensitive information,” according to a petition filed in Polk County District Court. “Even McKinsey’s own executives do not have access to all client lists, price lists, and other sensitive information.”

In addition to The Gazette, Scott Madden Management Consultants out of North Carolina also requested copies of the responses to the regents’ call. Scott Madden also applied for the implementation opportunities and was passed over.

An official with the Scott Madden declined to comment to The Gazette about why it wanted the other firms’ materials.

According to court documents, the Board of Regents in January asserted its intentions to disclose all the responses to its request for proposals unless the firms obtained a court injunction.

The firms did so, stopping the documents’ release in response to The Gazette’s December request. But, because McKinsey responded to a prior Board of Regents request for bids, much of the information at issue already had been released to The Gazette — including client and pricing information.

“McKinsey was surprised and dismayed to find that the Board of Regents disclosed its January proposal to The Gazette without providing notice to McKinsey, as required by the Open Records Act,” according to Gail Brashers-Krug, who is representing McKinsey in the lawsuit. “We will be addressing that failure directly with the Board of Regents.”

Brashers-Krug told The Gazette there’s not much the firm can do to claw back information once it’s out and it’s not planning a separate lawsuit seeking damages from that disclosure. But, she said, the prior disclosure could come up in the August trial, when it hopes to stop further release of its proprietary information.

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