EY’s Health dept revenue triples during COVID

Denham Sadler
National Affairs Editor

The value of Ernst & Young’s contracts with the federal Health department tripled during the pandemic, with fellow Big Four consultancy PwC doubling its work for the department in the same time.

According to an InnovationAus investigation, UK multinational professional services firm Ernst & Young (EY) enjoyed an increase in the value of its federal government contracts by more than 30 per cent in 2020 compared to the previous year.

This was driven by an increase of 246 per cent in work with the Health department, including on aged care services, Australia’s medical and vaccine stockpile, and financial modelling.

Health boom: EY triples Health department revenue, PwC doubles

PwC in the meantime doubled revenue from contracts with Health during the pandemic year of 2020, compared with 2019.

To calculate these figures, InnovationAus analysed all contracts active in 2019 and 2020 as posted to tenders.gov.au. The tenders.gov.au website reports any contract that is active in that period.

To calculate the calendar year spend, InnovationAus measured the length of each contract, calculated the daily expenditure for that work, and multiplied that figure by the number of days each contract was active during the periods being investigated.

Last year was shaped by the ongoing COVID-19 pandemic, with the focus and spending of the government centred on the health crisis. There was a significant uptick in the reliance on outsourcing and private consultants across a range of departments and projects, particularly those involved with the direct response to the pandemic.

Overall, government contracts increased by more than $20 billion or 6 per cent, reaching $331.275 billion in 2020.

Some of the contracts secured by EY relating to the COVID pandemic include for the development of a demand model for demand and distribution of aged care services, financial modelling, and advice on the onshore manufacturing of vaccines, which netted the firm $440,000.

EY landed a $1.5 million contract to conduct an audit of Australia’s medical stockpile and was awarded $558,000 to undertake a COVID vaccine system readiness review.

The firm also signed a contract worth $237,000 to conduct a review into the risks associated with the supply of personal protective equipment for the national medical stockpile.

The largest contract EY landed with Health last year was for aged care financial management advisory services, which is worth $15.5 million.

Big Four consulting firm PwC’s revenue for government work remained stable in 2020, but this was mainly due to some significant contracts coming to an end, with the firm still landing a huge amount of federal work during the pandemic.

This came primarily from the Health department, with the value of this work for PwC more than doubling, from an overall value of $6.6 million in 2019 to more than $14.1 million during the 2020 pandemic year.

These contracts included an $800,000 job for the provision of IT audit services, a portfolio review of project and program management practices worth $3.5 million and for governance and project management maturity services for $1 million.

The firm also landed a contract worth $8.1 million for “business advisory services supporting provider viability”, and completed work developing two residential aged care quality indicators.

PwC’s work with the defence department also nearly doubled in 2020, reaching $127 million. This work makes up nearly 70 per cent of PwC’s overall government contracts.

Do you know more? Contact James Riley via Email.

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