Another $2m McKinsey vaccine contract hidden

Denham Sadler
Senior Reporter

Multinational consulting giant McKinsey was paid nearly $2 million over three months late last year by the federal health department to assist with the Covid-19 vaccine rollout. But the contract was kept hidden until last month, with the government blaming human error.

The Department of Health awarded McKinsey a $1.859 million contract for “strategic supply chain support services”, running from 29 September to 18 December last year.

But details of this contract were not revealed publicly on AusTender until 10 May, in breach of the government’s own procurement rules.

Vaccine value: McKinsey paid another $2m to investigate onshore manufacturing

A spokesperson for the department said this was due to human error.

“The contract for this work had not been posted to AusTender as it had been incorrectly registered in the department’s Financial Management Information System as being exempt from reporting,” the spokesperson told InnovationAus.

“The error was discovered during the department’s routine assurance activities and the correction was made as quickly as practicable.”

The Health spokesperson said that procurements of Covid-19 vaccines, treatments and related goods and services are exempt from public reporting rules “in order to protect human health in the context of the Covid-19 global pandemic”.

The McKinsey contract was initially registered as exempt from public reporting under this clause, but this was a mistake by the department. The work by the consulting giant did relate to the vaccine rollout.

“Given the scale and complexity of Australia’s Covid-19 vaccination program, the Australian government, through the Department of Health, has procured services to inform and support the rollout through the provision of expert knowledge and skills, including from McKinsey & Company, to augment its own functional expertise, including with program delivery, logistics, administration of vaccines and data support,” the department spokesperson said.

It’s the second McKinsey contract in recent weeks revealed to have been hidden from the public, with a $2.1 million deal to develop a business case for local mRNA vaccine manufacturing capability not posted publicly until months after the work was completed.

This was also against procurement rules, with the industry department blaming an “administrative error”.

The final report that McKinsey produced as a result of this $2 million contract will also not be made public.

It was also revealed at Senate Estimates last week that the department had paid McKinsey a further $2.1 million to assist with the mRNA manufacturing capability procurement process. This contract has not yet been posted publicly.

McKinsey enjoyed a sharp uptake in its federal government work during the first year of the Covid-19 pandemic.

The dollar value of its contract nearly tripled in 2020 compared to the previous year, reaching $50.6 million. This figure is now closer to $55 million with the two previously unreported contracts last year.

One of these contracts was worth $660,000 and was awarded in August last year. As ABC News revealed last week, this work resulted in McKinsey producing an “eight page summary of publicly-available vaccine data” after four weeks of worth, and no “specific advice” to government.

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