Denham Sadler
July 26, 2019

Fed’s outsourcing gets new spotlight

Government

Fed’s outsourcing gets new spotlight

Big contracts: The Auditor General takes a peek at government outsourcing deals

The federal government’s growing reliance on outsourcing and contract employees in the public service will be scrutinised by a new national auditor inquiry.

The Australian National Audit Office (ANAO) has launched a follow-up investigation to its landmark 2017 report on outsourcing in the public sector.

In contrast to its usual audits, the ANAO will focus on collating all available government contracts and financial details to produce a report, without conclusions or opinions on this.

The ANAO’s Australian Government Procurement Contract Reporting update is set to be tabled in February next year.

“This information report will seek to provide greater transparency on procurement activity in the Australian Public Sector. This information report will neither be an audit nor an assurance review and presents no conclusions or opinions,” the ANAO said in a statement.

“This report will present in a variety of ways, including tables and figures, and publicly available data from public sector procurement activity recorded in AusTender.”

The ANAO’s 2017 version of the report, the first of its kind, found government procurement to be worth $47.4 billion in 2016-17. It also found that 14,000 to 15,000 public servants were classified as tech staff, and about one third of these were contractors.

The report revealed that the cost of an internal ICT worker was about $134,000, while a similar contractor cost $214,000 annually.

The prominence of IT contractors in the public sector became an election issue, with Labor promising to crack down on large tech vendors poaching digital staff from the public sector, and pledging to improve the digital skills within the public sector.

The ANAO has already shone a spotlight on several failed government tech projects that were outsourced to a large external contractor. The auditor produced a scathing report on the NEC Australia and Australia Criminal Intelligence Commission $90 million biometrics project which was shut down last year.

NEC Australia has claimed that the report does not criticism its own performance though and this week commenced court proceedings in the Victorian Supreme Court to recover costs and expenses related to the doomed project.

The federal government’s moves to outsource aspects of its oversight of the research and development tax incentive has also been highly criticised. Earlier this year the Department of Industry, Innovation and Science put out a call for expressions of interest for a supplier to “assist with program integrity functions for the research and development tax incentive program”.

The successful applicant will help to assess whether companies receiving the tax breaks are actually performing activities that are eligible for the scheme.

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