PwC awarded three new government contracts under new finance rules

The Greens have savaged PwC and the government after the professional services firm was awarded three new contracts despite new procurement rules put in place in May.

Embattled consultancy firm PwC Australia has been awarded at least three federal government contracts despite new procurement rules put in place in May, part of several deals signed with the firm’s government services arm under its new private equity owners.

PwC moved to sell its 1750-strong government consulting business in June in a $1 deal with Allegro Funds after the evaporation of new business for the unit that offers services to Canberra and state governments.

The government consulting business, to be called Scyne Advisory, will only take contracts for government work and is set to be headed by former Federal Court judge Andrew Greenwood.

PwC has said it will withdraw from all government advisory work, or about 20 per cent of the firm’s overall revenue.

Former Federal Court judge Andrew Greenwood will head public sector consulting firm Scyne Advisory.

But the Greens have savaged the deals, inked between PwC and two government departments, as a sign the firm is still winning work in Canberra despite the cloud hanging over its operations. Commonwealth tender documents show five contracts between the government and PwC have been published since June 22.

Of these three contracts started after the Department of Finance put in place new procurement rules in May in a bid to punish PwC and place barriers to further work from the commonwealth.

As part of the deal with PwC, Allegro has gained access to the central procurement panel by purchasing two business entities previously controlled by PwC which are approved suppliers.

The government is understood to be looking closely at Scyne Advisory and considering the implications of the change in ownership from PwC to the new Allegro-backed operation on current and future contracts.

Greens Senator Barbara Pocock said PwC and Scyne should face a ban on new contracts with the government.

“This softly softly approach by the government is clearly not working,” she said. “We are seeing new contracts being awarded to PwC across a range of departments for things such as auditing, IT, legal services and management advisory services. This is wrong and Australians are expecting better. They tell me so every day.”

In May Finance secretary Jenny Wilkinson directed PwC to stand down personnel who had knowledge of or were involved in the firm’s use of confidential government documents to shape tax strategies for tech companies.

Finance also published a procurement note “reminding officials that they must consider the previous behaviour, including ethical conduct, of an organisation when undertaking value for money assessments” for new government contracts.

Finance also moved to vary its management advisory services panel to include clauses allowing the department to remove a supplier and cancel existing and future contracts “in respect of behaviour that is outside the specific scope of the services delivered under the panel”.

Sports Integrity Australia awarded a $20,000 contract to PwC in April, which was published in June, to run a review of the agency’s financial statements to ensure they align with Department of Finance reporting.

A Sports Integrity Australia spokesman said PwC had confirmed no member of its team working on contracts for the agency “was a subject of the Australian Tax Practitioners Board investigation or findings, and no team member has been found to have breached confidentiality, nor otherwise misused information received in the course of the relevant confidential Treasury consultations”.

The Department of Climate Change, Energy, the Environment and Water contracted PwC to provide legal services in April, publishing the deal in July, in a move it said was done after approaching the market.

Both these contracts were awarded after the Tax Practitioners Board took aim at PwC in December over its use of confidential information.

The three further contracts, including a $30,000 deal with Home Affairs to provide software services, as well as a $52,965 contract with the National Audit Office, were all awarded in June and July after Finance imposed its new procurement rules.

A Home Affairs spokeswoman said the contract was awarded “in line with the new guidance”.

Senator Pocock said the failure to stop work being awarded to PwC “looks like lip service” from the government. “There needs to be a formal ban on new contracts to both PwC and their phoenix offshoot companies as well,” she said. “Scyne Advisory should be excluded alongside PwC, until we can have some faith in the integrity and management of the consulting sector.”

Originally published as PwC awarded three new government contracts under new finance rules