The CIA has paid more than $10 million to a management consulting firm advising senior U.S. intelligence officials on a broad reorganization that agency Director John O. Brennan began earlier this year, current and former U.S. officials said.
The agency also is requiring some of its departments to surrender portions of their annual budgets in an effort to collect enough money to cover other costs associated with the restructuring, officials said.
The payments to the firm, McKinsey & Co., have been viewed with skepticism by some at CIA headquarters and on Capitol Hill at a time when the agency is confronting significant new security threats as well as pressure to trim costs.
Several current and former U.S. officials said they were surprised by the magnitude of the consulting contract, an arrangement that officials said Brennan did not mention to workers when he announced the reorganization or explain to lawmakers in briefings.
“What is the rationale?” said a U.S. official familiar with the contract. “When you’re talking about millions and millions of dollars, there ought to be a reason why the money is being spent.”
The sum paid to McKinsey represents a tiny fraction of a CIA budget that is believed to exceed $12 billion annually. But current and former U.S. officials said they could not recall a previous case in which the CIA had hired an outside consulting firm at such expense.
CIA spokesman Dean Boyd declined to comment on the contract or overall cost of the reorganization, but said the agency is “implementing this plan within our existing budget and without seeking additional funds from Congress.”
A spokesman for McKinsey in Washington declined to comment.
McKinsey, which specializes in advising companies on management issues and corporate restructurings, was hired to help carry out what CIA officials have described as one of the most ambitious reorganizations in the agency’s history.
Under a blueprint that Brennan announced in March, the agency is breaking down the major directorates of espionage and analysis that have dominated the CIA’s bureaucratic structure for decades.
Instead, the agency is creating hybrid units that combine analysts and operators in centers focused on specific regions, such as the Middle East, or security issues including weapons proliferation. The new units are modeled on the CIA’s Counterterrorism Center, or CTC, an organization whose power and influence surged after the attacks of Sept. 11, 2001.
U.S. officials said that McKinsey was enlisted last year when Brennan created an internal advisory group to evaluate proposals for restructuring the agency.
Beyond the size of the payments, CIA veterans said the expenditures are likely to be regarded as frivolous among agency officials who often oppose any effort to divert agency resources from its core mission of espionage.
“It’s probably a good thing to bring in outside perspective at a time when you’re doing something this challenging,” said a former senior U.S. intelligence official. But, he added, “there is a skepticism and cynicism toward spending money on anything except mission.”
Others said that hiring McKinsey may help Brennan overcome internal opposition to the reorganization, citing instances when the workforce largely ignored bureaucratic initiatives, counting on their ability to outlast directors, who often are replaced every few years.
“This place is famous for doing a rope-a-dope,” a former senior CIA official said. “By bringing in McKinsey, he’s got an independent overseer not only to drive the process but report back the results.”
The CIA has long employed outside companies and contractors for roles ranging from providing security at agency bases overseas to maintaining vast computer systems. But the spy agency has been less inclined to solicit management advice from outsiders.
In 2005, when Robert Grenier was chief of the CTC, he brought in consultants from Booz Allen Hamilton to overhaul the center’s organization at a time when al-Qaeda was regrouping in Pakistan.
But the effort was viewed with disdain by Grenier’s boss, José Rodriguez, who scoffed at the idea of turning to management gurus for guidance on how to organize the hunt for terrorists. In his recent book, Grenier wrote that he got approval for the plan just months before he was pushed out of the job.