US consulting giant McKinsey is being paid $1.2 million to review CSIRO’s organisational processes and systems to “simplify and streamline” the agency ahead of the next federal budget.
The national science agency will lead the program of work review, but will pay McKinsey nearly $220,000 a month for “initial input” on the review under a contract which began in October and runs to March.
It comes just months after CSIRO was passed over by the government in favour of McKinsey for net zero modelling, and as concerns grow about the outsourcing of core departmental work.
CSIRO awarded the contract to McKinsey in October, just days after Melissa Price took over science portfolio responsibilities from Christian Porter.
The contract was originally published with incorrect tender details that the work, described only as “contractor”, would be worth only $121,000. The error was corrected more than a month later with the correct $1.2 million figure.
A CSIRO spokesperson declined to provide details on contract deliverables or how many McKinsey staff will be used, but said the work relates to the agency’s program of work review.
“CSIRO has initiated a program of work to review, simplify and streamline organisational processes and systems to deliver against our strategy,” A CSIRO spokesperson told InnovationAus.
“A CSIRO-led team is being supported by McKinsey who have been engaged for initial input, and to draw on their experience of working with other organisations with similar programs.”
No other contracts have been awarded for CSIRO’s program of work review. McKinsey’s is slated to end in mid-March, just weeks before the next Federal Budget and potentially ahead of the next election, which could come as late as May.
CSIRO was given a four-year $459 million funding lifeline last year to alleviate the dip in the agency’s commercial activities during the pandemic. The funding was upheld in the May budget, but CSIRO was handed a number of new responsibilities.
The increasing use of consultants is under increasing scrutiny after a recent parliamentary inquiry found it has reached “excessive” levels and is poorly monitored.
The dollar value of federal government contract awarded to McKinsey nearly tripled last year, after picking up much more work from Services Australia and the Digital Transformation Agency.
According to tender records, McKinsey’s only other work for CSIRO was a two-month, $850,000 “business advisory review” completed in June last year.
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When I was in private sector we had internal consultants and auditors to do these jobs./