The Albanese government’s avowed crackdown on consultants and contractors has secured a potent new piece of evidence after the Australian National Audit Office (ANAO) released its official take on how much agencies have been spending and with whom — for the past decade.
The spending analysis of the so-called ‘coalition of the billing’ is an important milestone in the push to stop internal skills from leaching out of the public sector to policy-as-a-service shops as Finance tries to get far better value for money on the commonwealth’s consulting spend.
The bare-all evaluation is contained in the arrestingly titled “Australian Government Procurement Contract Reporting — 2022 Update”, which looks at reporting from Finance’s AusTender system, the official tale of the tape in terms of spending and deals awarded.
While there is routinely political, departmental and industrial deflection of the levels of consulting spend, the ANAO’s update is pretty well as authoritative as it gets: the government auditor looking at the government’s cheque stubs — it really doesn’t get more irrefutable than that.
Table 4.7: Top 10 suppliers by number of consultancy-related contracts, 2012–13 to 2021–22
| Supplier ABN | Supplier name | No. of consultancy-related contracts | Value of contacts ($mil) | Proportion for supplier (all) | Proportion of total value for supplier |
| 69405937639 | AUSTRALIAN GOVERNMENT SOLICITOR (a) | 2,067 | 71.5 | 16% | 5% |
| 51194660183 | KPMG | 1,360 | 329.4 | 25% | 15% |
| 75288172749 | ERNST & YOUNG | 1,017 | 320.2 | 37% | 26% |
| 74490121060 | DELOITTE TOUCHE TOHMATSU | 860 | 190.5 | 29% | 14% |
| 52780433757 | PRICEWATERHOUSECOOPERS | 786 | 221.2 | 38% | 32% |
| 35740217343 | CLAYTON UTZ | 719 | 48 | 19% | 10% |
| 75304286095 | ASHURST AUSTRALIA | 486 | 25.7 | 17% | 8% |
| 65119369827 | SYNERGY GROUP AUSTRALIA PTY LTD | 425 | 46.1 | 19% | 8% |
| 20607773295 | PRICEWATERHOUSECOOPERS CONSULTING (AUSTRALIA) PTY LTD | 419 | 202.5 | 39% | 27% |
| 63478951337 | MADDOCKS | 391 | 13.8 | 20% | 8% |
Note a: The Australian Government Solicitor operates as a group within the Attorney-General’s Department.
Source: ANAO analysis of AusTender data for contract notices started between 1 July 2012 and 30 June 2022 that were identified as consultancy-related contracts.
Lawyer up
According to the Auditor Office’s dissection of consulting spend, “consultancy-related services” comprised “approximately 12% of all suppliers” over the 10-year period from 2012–13 to 2021–22.
In terms of the sheer number of contracts taken out with agencies, there’s actually some good news, namely that government has learned how to charge itself for its own services, and seems to be pretty good value.
Case in hand, the Australian Government Solicitor (AGS) took out the highest number of consultancy-related contracts by a country mile, chalking up 2,067 gigs, with the nearest law firm, Clayton Utz, coming in sixth, with 719 gigs over the decade.
Why does this matter? Well, considering how far certain departmental lawyers and senior executives went to not get the illegal robodebt shakedown scheme legalled, it seems the rest of the APS is pretty happy with in-house AGS advice.
It’s not bad value either, comparatively. The average cost of an AGS gig was $34,590 versus Clayton Utz’s average of $66,759. Clayton’s pulled in 719 consulting contracts over the decade worth a cool $48 million.
Ashurst came next in seventh place, with an average gig cost of $52,880 based on 486 contracts pulling in $25.7 million over the decade.
Maddocks wrote 391 consulting contracts worth 13.8 million, averaging $35,294 per gig.
Big Four and competitors
In terms of the so-called Big Four of consulting firms, or accounting and audit firms that went into policy, information technology and advisory, KPMG tops the top 10 consulting list at 1,360 contracts over the decade valued at $329.4 million making for an average of $242,205 per deal.
This said PwC, once known as PriceWaterhouseCoopers, came in as two billable entities: PriceWaterhouseCoopers and PriceWaterhouseCoopers Pty Ltd. The latter collected 419 contacts valued at $202.5 million while the latter chalked up 786 contracts valued at $221.2 million over the decade.
Combined PwC collected 1,135 consulting contracts worth $423.7 million, averaging $373,303 per deal according to the ANOA cut of AusTender consulting contract data.
Ernst & Young, now branded as EY, wrote 1017 consulting contracts worth $320.2 million, an average of $313.847 per deal.
Deloitte Touche Tohmatsu inked 860 deals worth $190.5 over the decade, averaging $221,511 per deal, to round out the four-way oligopoly.
Synergy the clear challenger
Perhaps the most notable entry in the league table is local Synergy Group Australia Pty Ltd, which inked an impressive 425 contacts over the decade totalling $46.1 million, coming in at a highly competitive average of $108,470 per deal.
Outside the Big Four consultancies and bulked-up law firms, there seems to be a clear sweet spot for the right advice at a competitive price that has propelled the tech and culture-savvy experts into the procurement gorilla cage.
This should give the Auditor and Finance some hope that real competition could take permanent root around consulting services, strategy and capacity building and renewal as opposed to chronic APS skills loss.
Budget cometh
The fortuitous appearance of the league tables — this piece has examined just one of the most illustrative — is timely given the Expenditure Review Committee will now be going through various policy proposals and budget submissions.
Paradoxically the ANAO-Finance numbers presented are by no means all-encompassing; rather they are tight and comprehensive within a framework, and this in itself helps tell the story of what has been left out, for better or for worse.
That means a lot in terms of tightening reporting parameters and how data is captured. Like them, or loathe them, audits have both a function and discipline that may not be perfect but encapsulates integrity.
For the record, the Boston Consulting Group penned 106 contracts to the value of $106.6 million over the decade.
At least they keep the math simple, at least for those of us pondering what the walk-in fee is worth on the sticker.
Table 4.8: Top 10 suppliers by value of consultancy-related contracts, 2012–13 to 2021–22
| Supplier ABN | Supplier name | Number of consultancy-related contracts | Value of consultancy-related contracts ($ million) | Proportion of all contracts for the supplier | Proportion of total value for the supplier |
| 51194660183 | KPMG | 1,360 | 329.4 | 25% | 15% |
| 75288172749 | ERNST & YOUNG | 1,017 | 320.2 | 37% | 26% |
| 52780433757 | PRICEWATERHOUSECOOPERS | 786 | 221.2 | 38% | 32% |
| 20607773295 | PRICEWATERHOUSECOOPERS CONSULTING (AUSTRALIA) PTY LIMITED | 419 | 202.5 | 39% | 27% |
| 74490121060 | DELOITTE TOUCHE TOHMATSU | 860 | 190.5 | 29% | 14% |
| 20093846925 | AECOM AUSTRALIA PTY LTD | 254 | 137.6 | 25% | 27% |
| 70007347131 | THE BOSTON CONSULTING GROUP PTY LTD | 106 | 106.6 | 43% | 52% |
| 41687119230 | COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION (a) | 360 | 104.5 | 23% | 15% |
| 66055131443 | MCKINSEY PACIFIC RIM INC | 56 | 89.7 | 40% | 47% |
| 39008488373 | GHD PTY LTD | 241 | 72.2 | 12% | 11% |
Note a: CSIRO is a Corporate Commonwealth Entity.
Source: ANAO analysis of AusTender data for contract notices started between 1 July 2012 and 30 June 2022 that were identified as consultancy-related contracts.
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