Three meetings, one minister, a $27m contract … and a $135m blowout

An American tech giant held three meetings with then cabinet minister Stuart Robert before securing a $27 million federal contract that snowballed into a $135 million project, sparking strong criticism from a parliamentary inquiry into how the deal was done.

Robert held the meetings while the federal minister in charge of the National Disability Insurance Agency, without any public servants joining him in two of the discussions before the project began.

The findings are part of a parliamentary report released on Wednesday that called for the auditor-general to examine how the winning bidder for the project, software company Salesforce, paid for meals and other benefits for federal officials.

Former cabinet minister Stuart Robert.Credit: Rhett Wyman

The final report adds to the committee’s interim findings about Robert and his close friend, David Milo, a consulting firm chief who approached Salesforce to help it seek deals with the NDIA and other agencies.

In its interim report, the committee referred some of the matters to the National Anti-Corruption Commission so it could use its “forensic accounting expertise” to examine the connection between Robert and Milo and any companies bidding for federal contracts.

David Milo, CEO of Synergy 360.

The head of the inquiry, Labor MP Julian Hill, said the Salesforce project left him surprised there was no explicit weighting on price in the value-for-money assessments in the initial decision to use the company’s software and services.

“The sizes of the contract variations were significant, now $135 million up from $27 million,” he said.

“A substantial proportion was due to significant changes in scope. Other vendors were basically denied the opportunity to tender for the product ultimately being delivered.”

The report found that Synergy 360 approached Salesforce in May 2019 to help it seek federal business and set up the first meeting with Robert in Parliament House in the first week of June, followed by a second meeting eight days later.

The NDIA launched a tender in July that year to consider Salesforce and other options for a customer-relationship management system, but it shelved this and launched a new tender in November and selected Salesforce as the preferred bidder in March 2020.

Robert held a third meeting with Milo and Salesforce executives in September 2020 in Sydney, with no record of any government official joining the group.

The final report by the Joint Committee of Public Accounts and Audit found that NDIA staff did not make any declarations about any gifts or hospitality from Salesforce.

When Salesforce provided written evidence to the inquiry, however, it revealed 118 instances of hospitality and gifts from the company to NDIA officials over about four years, including golf outings, drinks and meals. The committee has not named the individuals but has suggested the auditor-general start a further inquiry into those who received the benefits.

“The premise stated by NDIA for its hospitality policy is that none of its officials should accept gifts that could be seen to compromise their integrity. This was clearly not followed,” said Hill.

Robert kept in regular contact with Milo and his consulting firm, Synergy 360, after he was named the federal minister for government services and the NDIS in May 2019, according to a cache of leaked emails revealed by this masthead in November 2022.

Robert, who resigned from parliament in May last year, was government services minister and minister for the National Disability Insurance Scheme from May 2019 to March 2021, a period when agencies such as Services Australia and the National Disability Insurance Agency decided big contracts with companies that paid Synergy 360.

Robert had known Milo for several years before becoming a cabinet minister and was also close to another friend, John Margerison.

The final report from the inquiry focused on the use of taxpayer funds on the Salesforce project, against the backdrop of the links between Robert, Milo and Margerison.

Anthony Daly, a former worker at Synergy 360 and former husband of one of the firm’s top managers, said in a sworn statement to the parliamentary committee in June last year that he had helped arrange for Margerison’s company, United Marketing, to receive a 20 per cent stake in Synergy 360 in September 2017.

“Ultimately, this arrangement was designed to facilitate the flow of funds through United Marketing and onward to Stuart Robert,” Daly said to the committee.

Margerison has rejected those claims and denied that he stood to gain financially from Synergy 360, while Milo has denied any wrongdoing.

Robert said in June he did not believe he had ever met Daly and thought it was an “extraordinary abuse of privilege” for the parliamentary committee to release Daly’s sworn statement.

“At no time have I ever been paid for any advice or guidance in any form,” he said after the committee heard from Daly.

“At no time did I lobby to assist any firm in such a manner. I also reiterate that Mr Margerison and Mr Milo have both said publicly that no payments were ever made, nor sought.”

Government Services Minister Bill Shorten sought a review of contracts linked to Synergy 360 after this masthead’s reporting in November 2022, and he said on Wednesday this had led to “disturbing allegations” and concerning decisions such as those examined by the parliamentary committee.

Indian tech giant Infosys confirmed it paid Synergy 360 fees of $16 million for assisting it with big government contracts, but Salesforce paid the consulting firm a much lower amount.

Salesforce told the inquiry that none of its meetings with Robert and Milo were related to its tendering for NDIA contracts and said it had made a direct bid for the work without paying Synergy 360 a fee for winning the contract.

“Synergy 360 was not engaged as part of our bid for the NDIA tender,” Salesforce told the committee.

“That was a direct bid with our sales and professional services team. Overall, Synergy 360 was paid $214,200, including GST, by Salesforce, over a period of 24 months. The Synergy 360 consulting contract was terminated in June 2021.”

A company spokesman said trust was a key value for the company.

“Salesforce employees are required to comply with its code of conduct and other policies, including those relating to offering gifts or hospitality to customers,” he said.

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