PwC is doubling down on Health Department work in record year of government contracts

PwC more than doubled its revenue from the Federal Department of Health last financial year as it benefited from pandemic work outsourcing, with the British consultancy giant reporting a 20 per cent rise in government work overall.

An examination of contract documents by InnovationAus found that PwC earned $228 million from federal government contracts in fiscal 2020-21, up from $191.9 million in the prior year.

This relates to the actual dollar amount paid to PwC during the fiscal year and not the value of the contracts awarded to the company during that period.

This represents a nearly 20 percent increase over the previous year in 2020-21, the first full reporting year since the start of the Covid-19 pandemic, an increase of $36 million in government revenue.

This is largely thanks to a sharp increase in the Department of Health’s work for PwC, with revenue up 113 percent for the fiscal year and a 125 percent increase in the total value of contracts awarded by the Department to PwC last year.

PwC earned $228 million from federal government contracts in fiscal 2020-21

PwC received $22.17 million from healthcare in its most recent fiscal year, up from $10.4 million a year earlier. Contracts totaling $44.6 million were awarded during the same period.

The government named PwC as a “program delivery partner for vaccine rollout” in late 2020, and the consultancy has now been awarded more than $11 million for that work on the troubled rollout.

PwC also landed a number of lucrative contracts with the Department of Defense and Services Australia in the past financial year.

That includes a contract with Defense worth nearly $1 million for just 61 days in fiscal 2020-21.

PwC also raised nearly $1 million last year for two months of work provided by Services Australia to hire workers and an additional $676,000 over 55 days to complete market research for the department.

Last fiscal year, the consulting giant also landed a six-month deal with the IRS valued at $2.7 million.

PwC’s good run with the federal government has continued in the current fiscal year, with the consulting firm winning a number of new orders, particularly with the industry department.

Earlier this month, it was revealed that PwC had received $105,000 within two weeks to provide the department with six staff members to help evaluate grants under a “top-up capacity.”

PwC was paid more than $5 million for reviews and reports to the Industry Department this fiscal year, raising concerns from federal opposition to the Department’s “privatization by cover”.

InnovationAus.com analysis also found that the Boston Consulting Group more than doubled its government business revenue in the most recent fiscal year, up $39 million from the previous fiscal year.

At the same time, McKinsey, another Big Four consulting firm, increased its Commonwealth treaty revenue to $58.6 million, an increase of more than 75 percent.

InnovationAus.com used all contracts active during the fiscal year 2020-21 reporting period to perform this analysis. For contracts that ran for more than one reporting period, the total contract value was divided by the total number of contract days to get the per-day value for each contract.

InnovationAus.com then calculated how many days each contract was active in a given reporting period and multiplied this by the daily value of the contract.

The current system of contract disclosure is opaque and difficult to understand. The methodology used by InnovationAus.com is a better indicator of the increasing use of multinational management consultants and Big Four companies to provide technology services than the government is giving.

Do you know more? Contact James Riley via email.

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