Big Four consultancy EY more than doubled the value of its federal government contracts in the second year of the pandemic, increasing revenue from the Commonwealth by $124.9 million in a single calendar year.
EY was paid $237.8 million by Australian government departments and agencies during the 2021 calendar year, up from $112.9 million in 2020, an increase of 109 per cent, according to analysis of AusTender data by InnovationAus.
The dramatic revenue increase of $124.9 million puts EY at a similar level to long-time federal government favourite consulting giant, KPMG.
These figures relate to the actual dollar amount paid to EY during the calendar year 2021, rather than the value of the contracts awarded in the year.
The 2021 analysis reveals a continued trend of more money going to large consultancies since Covid-19 hit the previous year.
Two massive deals from Foreign Affairs and Health Departments paid EY more than $54 million dollars in 2021 and will net the company another $50 million over the life of the contracts.
The Department of Foreign Affairs and Trade contract is for “Australia’s Infrastructure Initiative for Southeast Asia” and was signed in late 2020. It runs for just over two years for a total of $67.1 million. The deal reportedly makes EY the prime contractor in a consortium of professional services firms for the DFAT program.
The Department of Health handed EY a $36.6 million contract for “Aged Care Financial Managmeent [Sic] Advisory Services” in 2020. This contract was initially for only $3.7 million, but was rose to nearly ten-times the original value over 10 amendments.
The two contracts paid EY around $150,000 every day in 2021 and are part of six especially lucrative contracts it held last year, collectively earning the company nearly $100 million.
A single Home Affairs contract for “ICT Professional Services” paid EY more than $10 million for less than a year’s work, equal to $29,869 per day.
The Department of Infrastructure, Transport, Regional Development and Communications also paid the consultancy $10.5 million last year to assist regional organisations, governments and communities to develop their projects for the second round of the Inland Rail Interface Improvement Program.
This contract will eventually pay EY more than $17.8 million when it ends in June this year.
The Department of Defence also awarded EY a $10.9 million contract last year for “Strategic Planning Consultation Services”. This contract ran for just five months, paying the company more than $71,000 per day.
The Tax Office also paid EY $11.2 million in 2021 for the “Provision of ICT Professional Services”. The contract was extended and will run to the end of March 2022 for a total of $15.9 million. Details of this contract have been kept secret for commercial reasons.
Outputs from a two-year, $2.7 million Department of Finance contract may also never be released. Labelled only as “Commercial Advice” the contract has been tagged “Protected Cabinet”. It started one year ago and runs until the end of this year, earning the firm more than $4,00 everyday.
The escalation in public money paid to consultancies has caused alarm among public sector groups, Labor and the Greens. The Opposition has promised to improve AusTender reporting and to lessen the reliance on consultancies through a revamped public service if it wins government.
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