McKinsey hasn’t landed a government contract since February

Denham Sadler
National Affairs Editor

McKinsey has not been awarded an Australian government contract since February, and the global management consultants landing less than a quarter of the value of contracts from the Commonwealth in 2022 compared to this time last year.

McKinsey had enjoyed a sharp increase in federal government contracts with the onset of the Covid-19 pandemic, nearly tripling the value of contracts in 2020 and maintaining this figure in 2021.

The company received $58.6 million from the Australian government in 2020-21, an increase of 75 per cent over the previous year.

McKinsey was closely involved in Australia’s response to the pandemic, including through advice on the vaccine rollout, the supply of rapid antigen tests. and the establishment of an onshore mRNA vaccine manufacturing facility.

But the firm’s government contracts have dried up during 2022.

McKinsey has not been awarded a federal government contract since February 14, according to the AusTender website. This contract was for simplified trade system services and ran until April 29 at a cost of $1.8 million.

In total, McKinsey has been awarded contracts worth $6.22 million from the federal government in the first half of the 2022 calendar year. This is a sharp decline compared to the the same time period last year, when it landed $24.43 million.

It comes amid growing scrutiny on McKinsey’s tax practices around the world.

French regulators have launched a preliminary investigation into McKinsey over alleged tax fraud following reports by the Senate that the company had not paid corporate profit taxes in France since at least 2011.

A recent report by the Centre for International Corporate Tax Accountability and Research (CICTAR) found that McKinsey pays “negligible” tax in Australia, despite winning more than $145 million in federal government contracts over the last three years.

The report found McKinsey has had a total income in Australia of $850 million since the 2019 federal election but paid only $1 million in tax in Australia in that time.

There is an “aggressive pattern of shifting profits out of Australia”, the CICTAR report claimed.

The new Labor government pledged to cut government spending on contractors and consultants by $3 billion.

While McKinsey has seen its government work plummet this year, a number of its rivals have received lucrative contracts in recent months.

Deloitte, PwC and KPMG have all received a number of contracts from the Commonwealth across the last six months.

Deloitte will be paid $6 million over the next year to assist with the major GovERP project, and will also receive $1.3 million to assist with the delivery of the federal government’s National Space Mission.

PwC has also been awarded a number of contracts in recent months, including one worth $2.25 million to provide data services to the Department of the Prime Minister and Cabinet, and a $3 million deal with the Australian Institute of Marine Science.

KPMG has received lucrative contracts from ASIC, the Aged Care Quality and Safety Commission and the Department of Defence in recent months.

Do you know more? Contact James Riley via Email.

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