Ernst & Young will be paid $3.3 million per month over the next year to continue its data and analytics work at the Australian Taxation Office, with the lucrative contract almost doubling in value to $85 million.
As questions over the rampant use consultants in government grow in the wake of the PwC tax leaks scandal, the tax office earlier this month awarded EY a 12-month extension worth $39.7 million to an existing contract.
Listed only as “provision of ICT professional services”, the contract relates to the ATO’s data and analytics program, which the ATO has previously said requires “in-depth experience in big data and cloud services”.
EY was originally brought in by the ATO in June 2021, under a nine-month contract worth $11.3 million, but the price tag subsequently skyrocketed through a series of amendments that began less than six months into the contract.
Another four contract amendments worth $69 million have now occurred in the last 12 months, including the most recent $39.7 million increase, which is described as “additional fund[ing] for contract extension”.
A spokesperson for the ATO told InnovationAus.com that the contract was “extended for 12 months via existing extension options to 31 March 2024, after being assessed to ensure continued value for money”.
The ATO declined to comment on other details, including whether EY would provide any new data and analytics services as part of the amended contract, or how many people will work on the contract over the next year.
The contract is subject to a confidentiality clause relating to costing/profit information, according to Commonwealth procurement website AusTender. The clause is due to “commercially sensitive vendor information”.
At $85 million, EY’s data and analytics work at the ATO is now its most lucrative tech contract across the federal government, a title previously held by the firm’s $57 million contract with Services Australia for the GovERP system.
EY is the delivery partner on the enterprise resource planning (ERP) overhaul. Like at the ATO, the contract has grown significantly since it was first signed, from $14.5 million to $57 million between November 2021 and March 2023.
Last month, officials from Services Australia revealed that the GovERP program had been “reprofiled”, with $60 million in funding destined for the technology project deferred until the 2023-24 financial year.
EY’s largest non-tech contract, which is for “Australia’s Infrastructure Initiative for Southeast Asia”, is worth $120.5 million.
The use of consultants across government has become increasingly vexed since PwC breached government confidentiality to monetise privilege information through a scheme that helped multinationals minimise tax.
According to an audit, EY received $320.2 million through 1,017 consultancy-related contracts between 2012-13 and 2021-22, putting it behind that of PwC ($423.7 million) and KPMG ($329.4 million).
However, the full extent of contracts is much higher. In 2021 alone, EY was paid $237.8 million for its work with federal government departments and agencies, according to an analysis of AusTender data by InnovationAus.com.
Last week, the Parliamentary Joint Committee on Corporations and Financial Services launched a new inquiry into the structure and culture of Big Four consultancies. It comes as a separate inquiry by the Senate Finance and Public Administration Committee is ongoing.
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