Feds still spraying money at Deloitte through a firehose

James Riley
Editorial Director

The first two years of the pandemic have been a winner in Canberra for consulting giant Deloitte, which has grown revenue from federal contracts by nearly 70 per cent, or $109 million additional dollars.

Deloitte revenue from federal government contracts for calendar year 2021 as reported to AusTender amounted to $265.3 million.

This was a 23 per increase – or $51 million – over the 2020 calendar year, when Deloitte enjoyed $214 million worth of federal business.

These kind of staggering year on year growth rates among the Big Four accountants and the top tier management consultants like McKinsey and Boston Consulting Group have become routine. They are shocking, of course, but hey, we’ve been shocked before so we’re getting used to it.

Let’s not forget that the accountants EY increased its federal government revenue last year by $125 million over its 2020 revenue. That’s growth of 109 per cent off an already large base of more than $112 million.

Parliament House

I mean seriously, EY is a service company. In this incredibly tight employment market, where did the EY geniuses even find enough warm bodies to provide an $125 million worth of additional services? That’s really quite an achievement, so hats off to the EY boys.

Back to Deloitte’s happy pandemic in Canberra. Before we all become entirely immune to shock and outrage, its worth looking at where the Deloitte growth has come from.

The value of Deloitte work performed at Services Australia grew by more than 400 per cent for the year 2021 over the previous calendar year. That’s $29.8 million in 2021 compared to $5.8 million in 2020.

The mullet-stunning growth rate is most likely exaggerated by a small accounting change (for indeed Deloitte is an accounting partnership after all) in which substantial programs of work that were started as Digital Transformation Agency projects.

We can surmise this by looking at the dramatic fall in Deloitte work performed for the DTA, which was worth $29.9 million in 2020 reduced to just $2.1 million in 2021. The bulk of the work value transferred from the DTA was related to the MyGov rebuilt, the project known as GovDXP.

Let us remember that GovDXP started life for Deloitte as a sub-$1 million single-supplier tender to build the prototype of a new front-end. That single piece of work grew in value from that single uncontested tender to $33 million while performed at the DTA.

Its worth remembering also that the GovDXP project designers made the controversial shift to a content management system from Deloitte global technology partner Adobe – with the DTA abandoning the open-source drupal based GovCMS system that it had spent five years arm-twisting federal departments to standardise on.

The DTA has never said publicly where that basic technology decision was made – inside the Deloitte team or within the DTA. Regardless, the decision is worth tens of millions of dollars far into the future.

But that’s ancient history. In 2020, the project moved to Services Australia. Whatever work is being done on the project is harder to track. While still referred to publicly as GovDXP, the project is no longer using the GovDXP label within the AusTender website, effective rendering this happy jaunt opaque.

All we can see is that in 2021 when Deloitte’s business at Services Australia jumped by $25 million, the Deloitte business at the DTA fell by $27 million.

So, while the brains trust behind this project strive for the least transparency possible, we can surmise that GovDXP remains a Deloitte project worth tens of millions of dollars annually as it grinds on into the future – iterating its way to an endless bounty, with no incentive to complete.

Finally, it is similarly worth noting what valuable partner that Deloitte has been to the Industry department during the two pandemic years.

Specifically, Deloitte’s value to the Industry department grew by 110 per cent, from the $9.8 million worth of work it performed for the department in the 2019 pre-pandemic year to the $20.6 million it performed for Industry in 2021.

Yee haa! There sure is a whole lot of consultin’ going on.

Do you know more? Contact James Riley via Email.

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