Finance sets firm deadline on PwC government consulting ban
The Department of Finance has barred PwC Australia from applying for government work until 1 December 2024 while it continues its review of the firm’s public engagements.
On Thursday, Finance published a procurement note on its website, adding an expiry date of 1 December 2024 to PwC Australia’s ability to bid for Commonwealth contracts.
While PwC itself is barred from applying for government tenders, Anthony Klan reported that the Australian government had awarded more than $700,000 to “PwC’s Indigenous Consulting.”
Government procurement site AusTender recorded two new contracts for the firm, which Finance considers “separate” from PwC Australia.
These new contracts were published on AusTender on the same day as the department’s procurement note affecting PwC Australia.
Last year, the Department of Finance posted an open-ended note addressed to all federal agencies on its website, reminding procurement officers that they must consider previous behaviour including confidentiality breaches when assessing tender applications.
The note was taken as an effective ban on PwC Australia from procuring government work following revelations the firm had misused confidential government information.
It gave no guidance as to how long the ban might operate, nor did it specify any way for a wrongdoer to win back Finance’s good graces.
This latest procurement note adds a clear minimum horizon before which PwC will be unable to tender for government work, though it is doubtful whether normal relations between the two parties will resume for some time.
While there has been some suggestion that the fixed deadline in the procurement note provides a way back for the firm to the government work, it is worth remembering that the firm sold its government consulting arm to Allegro Funds last year.
Moreover, Finance’s review of the firm is ongoing, meaning its status as a prospective government contractor – capacity issues aside – is less than certain.
“In recognition of the significant number of outstanding investigations still underway into PwC Australia and PwC International and the timeframes set out by PwC Australia in its response to the Independent Review of Governance, Culture and Accountability (Switkowski Review), PwC Australia has agreed with the Commonwealth that it will temporarily cease new contract engagements with Australian Government entities captured by the Commonwealth Procurement Rules until 1 December 2024,” said Finance.
The deadline poses a mandatory minimum cessation. Upon expiry, Finance said it would provide a further update.
The note also said Finance has taken responsibility for the government’s response to the tax leaks scandal and that its examination of the firm’s “ethical soundness” is ongoing.
“This timeframe will allow PwC Australia further time to implement the Switkowski Review recommendations and for the current investigations and inquiries to be progressed.”
It also reiterated the reminder it gave last year to procurement officers that they should consider performance history when fielding applications for government work.
Greens Senator Barbara Pocock wrote on social media yesterday that the 1 December 2024 deadline is “premature to consider paying PwC after the firm’s egregious betrayals of the [Australian] people and their [government].”
Government advisory, which made up around one-fifth of the firm’s billings in FY2023, is a shrinking sector generally.
From 1 July, all federal government departments will be required to publish targets on bringing a certain share of their core work in-house to build internal Australian Public Service (APS) capacity.
Andrew Danks, first assistant secretary of procurement at Finance, said the department was still preparing stricter conflict of interest disclosure rules.
Deputy secretary of the department’s commercial group, Richard Windeyer also said Finance will develop a central register charged with recording contract terminations.
Where contracts will continue to be awarded, the APS Strategic Commission Framework encourages agencies to favour small businesses, First Nations businesses, and specialist suppliers including not-for-profits, peak bodies, community-controlled organisations, and universities.
Before entering office, Prime Minister Anthony Albanese committed to rebuilding the APS, reversing a historic gutting over the past decade in the form of job cuts and outsourcing.
This included a promise to abolish the APS’ staffing caps introduced in the 2015–2016 federal budget which aimed to keep the headcount at or below 2006–2007 levels of 167,596 employees.
The 2022–2023 budget included a “moderate uplift” in staffing numbers to an estimated 173,558, as part of a $3 billion budget trimming exercise clawing back on outsourcing and labour hire.
In its most recent budget, the government forecasted an increase of approximately 10,000 APS staff over the 2023–2024 period.
“Labor’s policies will improve efficiency in the APS, end the years of wasteful spending and boost jobs in service delivery to ensure Australians are able to access high quality services when and where they need them,” said Prime Minister Albanese.
