McKinsey & Company, a global consulting firm, is fighting the release of information contained in its contracts and agreements with the University of Texas System.
McKinsey counts itself among the “big three” management consulting firms in the United States, alongside BCG and Bain. McKinsey advises businesses and higher education institutions.
But some of that advice may conflict with a recently enacted law in Texas concerning the spread of DEI and woke policies in higher education.
In 2023, state lawmakers banned universities from establishing a DEI office, using DEI criteria in their hiring practices, or requiring employees or prospective employees to attend DEI training. The restrictions do not apply to academic instruction, student organizations, student admissions, guest speakers, or scholarly research.
McKinsey has a history of advocating for diversity, equity, and inclusion, “LGBTQ+,” and “active allyship.” In June, the Wall Street Journal reported that McKinsey’s claim they had found a link between “racial and gender diversity” and business profits in a 2015 study that became “hugely influential” in the business world has been debunked. The Journal reported McKinsey’s promise of increased profits never came true.
However, the consulting firm continues to advocate for diversity and inclusion policies in higher education.
McKinsey has a relationship with the University of Texas System (UTS)—the parent of UT-Austin and other branch universities.
On October 4, Texas Scorecard sent a Public Information Act request to UTS for its contracts with McKinsey.
On October 16, UTS appealed this request to Texas Attorney General Ken Paxton. In its appeal, UTS stated it took “no position” on the request, but McKinsey “has not agreed to the release of the information at issue.”
Fourteen days later, McKinsey sent its own letter. They objected “to the release of certain information contained” within the requested records. In a letter to Paxton’s office, McKinsey argued the information would reveal “confidential financial information and could give an advantage to [its] competitors if disclosed.”
Representing McKinsey, Stefan Martinez cited Tex. Gov’t Code 552.110 and 1101. This allows contractors to withhold information on their approach to work and any discounts, pricing methodology, cost data, other pricing information, or trade secrets.
“The information McKinsey seeks to redact includes pricing information, which McKinsey holds and treats as confidential and proprietary, the disclosure of which could give competitors an advantage over McKinsey in future [requests for proposals],” Martinez wrote.
North Texas attorney Tony McDonald decried this attempt at hiding information. “It is unfortunately very common for contractors to hide from disclosure using these provisions,” he wrote. “This is something the legislature can fix. Those who profit from government should not also hide those profits from taxpayers.”
Others have tried examining McKinsey’s relationships with universities outside of Texas. Transparency was not optimum in either case.
Last year, The Independent Florida Alligator, a student newspaper, reported that University of Florida President Ben Sasse hired McKinsey on a $4.7 million contract.
The publication successfully obtained invoices for McKinsey’s services. The publication requested the “scope of work” attachment to the contract. They were denied under Florida’s public records laws as “trade secrets” and “business proprietary information.”
In 2019, the Arizona Daily Star reported on a $14 million contract between McKinsey and the University of Arizona. UA President Robert C. Robbins said he hired the firm to provide plans and a roadmap for the future of the university.
But, entire pages of the McKinsey contract were redacted under Arizona’s public records law. The Arizona Daily Star wrote that this “make[s] it virtually impossible for an outsider to tell precisely what the firm did to earn its fees.”
The Star criticized McKinsey for having “relatively little experience consulting for American universities.” It reported that the firm charged the university up to $185,000 weekly.
UTS did not respond to a request for comment before publication.
McKinsey referred us to UTS regarding our questions about contracts with the university system. They had no comment about our other questions, including their firm’s current position on DEI and if they’re still advising universities and businesses to pursue “racial and gender diversity” policies.
Texas Scorecard will continue to examine higher education in the state. If you or anyone you know has information regarding universities, please contact our tip line: scorecardtips@protonmail.com.
