‘Outrageous and indefensible’: PwC assessing govt grants under $2m Industry contract

Denham Sadler
National Affairs Editor

Global consulting giant PwC is assessing government grant applications as part of a near-$2 million contract with the Industry department which the public sector union has branded “outrageous and indefensible”.

Last month the Industry department awarded PwC a $1.9 million contract running from 12 January to 30 June for “surge capacity and capability uplift”.

A spokesperson for the department elaborated slightly on what work PwC will be doing for the government.

“The department has engaged PwC through an open tender process to provide capability support services and expert advice to AusIndustry to support the delivery of grant programs and the government’s priorities,” the Industry department spokesperson told InnovationAus.

Big dollars, big contracts

The spokesperson would not reveal which programs PwC will be working on as part of the contract, but confirmed it may include the assessing of grant applications.

“The program support PwC is providing to the department is of a general nature and is not specific to any one program, or set of programs. PwC contract staff are being engaged to provide general and wide-ranging support functions which may include assessing grant applications,” the spokesperson told InnovationAus.

The Community and Public Sector Union (CPSU) has slammed the outsourcing of core Department work, saying it can and should be done in-house by APS staff.

“This contract looks like yet another example of the Morrison government paying exorbitant rates for consultants to do work that can and should be done by the public service,” CPSU assistant national secretary Michael Tull told InnovationAus.

“While the department says this contract is to assist with a surge capability the fact is that the design, assessment and approval of grants schemes is bread and butter work for this Department. This is not work that should need to be sent outside to be done.”

Big four consultancy PwC has now been paid more than $5 million in the last year to complete a range of reviews and reports for the Industry department, as concerns over “privatisation-by-stealth” and outsourcing in the public service continue to grow.

The department has not released information on how many PwC staff will be working with AusIndustry as part of the latest contract, and what individual PwC workers will be paid.

But in a response to a question on notice about a PwC contract with the Department of Agriculture, Water and the Environment, it was revealed that the daily rates of some staff at the consultancy was as high as more than $5000 per day.

This is significantly more than it would cost for a member of the public sector to complete this work, Mr Tull said.

“While we have not seen the details of this contract we are seeing similar contracts on other agencies where consultants are charging between $1800 to more than $5800 per day for work the APS would do for a tenth of the price,” he said.

“The mark ups we are seeing are simply outrageous and indefensible. If the Department is genuinely having trouble with staff numbers and workloads the solution is for the Morrison government to stop wasting money on consultants and suppressing public sector wages, and allow the Department to pay their own staff better and offer them opportunities to apply or extend their skills.

“Paying consultants $5000 a day is not a solution, and looks to the public like an outrageous waste.”

In the second half of last year the Industry department handed PwC three contracts worth a total of nearly $3 million for a range of internal work.

This included a $940,000 contract for inputs on a review of aspects of commercial operations of the Industry department, a $961,000 deal for a different review of the department’s corporate services, and another for $939,000 for professional advice on a department review.

In September last year, Boston Consulting Group was paid $400,000 for just one week’s work for the Industry department, while McKinsey was handed $1.3 million to help the department with its net-zero emissions by 2050 plan, despite the national science agency also bidding for this work.

The Industry department also enlisted McKinsey’s work across 2021 to provide advice on the local manufacturing of mRNA vaccines.

This continual reliance on big consultancies is damaging the internal capacity of the APS, Mr Tull said.

“There are talented staff in the Department who can do this work, and many others across the public service who could apply their experience or who would benefit from a chance to build their skills,” he said.

“Every time public sector staff are denied an opportunity to do work like this is a missed opportunity to develop APS capability and leads staff to look elsewhere for career development and advancement – which in a competitive and tightening labour market is a dangerous approach for an employer to take.”

Do you know more? Contact James Riley via Email.

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