Government consultancy spend nudges $900 million

The federal government is forking our more money for consultants, with expenditure more than doubling over the last ten years.

Auditor-General Grant Hehir

Expenditure on consultancy services hit almost $900 million in the last financial year, an analysis of AusTender data from the national audit office shows.

A report by Auditor General Grant Hehir shows the figure has grown steadily from $352 million in 2012-13 to $888 million in the last financial year, with almost $330 million worth of contracts awarded to KPMG alone.

The ANAO’s latest report on commonwealth government procurement contract reporting shows contracts worth $565 billion have been reported to Austender since July 2012.

Around $107 billion was spent on management, business professionals and administrative services, with this category making up the highest number of contracts (270,500) over the last ten years.

It was also the category that saw the biggest increase, going from 21,300 contracts in 2013 to 37,700 last year.

Most of the contracts, 408,710, were procured via limited tender, with 372,784 going to open tender.

‘Big Four’ dominate consultancy contracts

While the number of consultancy-related contracts has remained consistent at around 4,000 a year, the government is outlaying more for them, the report shows.

Source: ANAO

The top suppliers of consultancy-related contracts were the Big Four of KPMG (1,360 contracts), Ernst & Young (1017), Deloitte Touche Tohmatsu (860) and Pricewaterhouse Coopers (786).

KPMG received the most money for its services, with the government forking out $329.4 million over ten years for 1,360 contracts.

PwC appears twice under two ABNs, as Pricewaterhouse Coopers and Pricewaterhouse Coopers Consulting (Australia). Together, the two listings were awarded 1,205 contracts worth $423.7 million.

$300m contract blowout

The cost of amendments, or ‘add-ons’ to contracts is also increasing.

Amendments made up a third of total contract values across the last ten years. In 2022 the government spent $28 billion on amendments  compared to $4 billion in 2013.

Source: ANAO

A contract for outsourced IT services from the Department of Agriculture, Fisheries and Forestry had 235 amendments since 2009, including 78 over the last decade which saw the value of the contract blow out by $300 million.

There have been almost 209,500 contract amendments, with a value of $182 billion, in the last ten years.

The report does not present any conclusions or opinions.

The ANAO spent $155,500 to prepare the report.

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One thought on “Government consultancy spend nudges $900 million

  1. The ANAO didn’t release the parallel figures. As over the same period the APS shrunk. and the Private sector big 4 profited.

    Sadly ANAO never reveals, The actual derived benefits /quality of advise given As an indicator of Value For Money and the comparison of level of services.

    Its convenient for some in government, as its assumed by Ministers that the big 4 gives superior advice and services.
    And for some Ministers and their staff, A guarantee almost That you can give industry players a contract for a project that dictates the required answer will be provided.
    And No questions will be asked.

    Its a wasteful system that still has little accountability, when many of those who rely on timely and the right advise, are the also Taxpayers who are left paying for services
    So, Service levels reduced in paying for consultancies. Rather than provide the services originally allocated.

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