Multinational management consulting firms have emerged as one of the biggest winners over the course of the pandemic, making millions from state and federal government to handle the response to COVID-19.
As Crikey reported recently, the government outsourced key pillars of its embattled vaccine rollout to McKinsey, Accenture and PwC. But new analysis shows the use of consultants, which has intensified over the last year, goes well beyond the vaccine rollout. Both the federal and state governments have spent millions on external consultants, who have been put in charge of everything from the COVIDSafe app to mapping the impact of the pandemic on tourism and education.
But despite all that money being spent, the public remains in the dark about whether it’s being put to good use.
The grift that keeps on giving
Just how big a windfall have consultants made off the Australian government’s pandemic response? Well, from the vaccine rollout alone, McKinsey has made more than $5 million, Accenture $7.8 million, and PwC an undisclosed amount — the government listed them as a delivery partner, but the value of any contract is unclear.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
Zoom out from the rollout, and the grift grows even bigger. Boston Consulting Group (BCG), which along with McKinsey and Bain make up consulting’s prestigious “big three”, received more than $1 million for its work on the failed COVIDSafe app, now totally abandoned in favour of the humble QR code.
After an initial $220,000 contract with Home Affairs, BCG inked a twice-extended contract with the Digital Transformation Agency to provide “business administration services” supporting the app between April and August worth more than $800,000.
The firm also had a $500,000 one-month contract from the Department of Prime Minister and Cabinet (PM&C) between May and June last year to provide management advisory services, and another $1.5 million contract between last September and March from Tourism Australia to “provide a range of modelling services” informing the body’s understanding of the effects of the pandemic on the sector.
PwC, the government’s vaccine delivery partner, has also had a big pandemic year. It signed a $325,000 deal with the Department of Education, Skills and Employment last June to research the national training system’s response to COVID-19. And over the last year, it inked five COVID-related contracts with PM&C, the National Health Funding Body, ASIC and Defence worth $1.1 million all up. Then there are the two, rather vague contracts with Health, worth $5 million in total between April 2020 and March 2022 to provide “portfolio support” and “program assurance evaluation”.
On top of that there were two contracts between the Department of Education and Deloitte to provide research into the education sector, and a cool $557,000 between Health and Ernst & Young to conduct an “Influenza Evaluation and Covid Vaccine System Readiness Review”.
The states are also getting in on the act and outsourcing elements of their vaccine rollout to consultants. On that front, Western Australia is the worst offender — in January, McGowan’s empire awarded Deloitte an estimated $3.4 million contract to handle “system integration and implementation of a vaccine management ICT solution”.
Victoria, who responded to questions from Crikey by vaguely acknowledging their use of consultants in the vaccine rollout, have a $450,000 contract with Servian for vaccine-related IT issues.
The secrecy blanket
Transparency experts warn that the (over)use of these consulting firms to advise the vaccine rollout and broader pandemic response has put much of the program under a “secrecy blanket”.
Russell Wilson, a director at Transparency International Australia, told Crikey that the use of confidential contracts between companies such as PwC and McKinsey and the government meant it was impossible to hold them to account over their involvement in the rollout.
“The use of contractors in this way has been problematic in a lot of areas, not just the vaccine rollout,” he said.
“What it means is the work of these consultants can effectively be made very confidential, both in a contractual sense, and because it’s far harder for any information to be obtained under FOI [freedom of information] legislation.
“It effectively puts a secrecy blanket over what’s going on here.”
Beyond the contract descriptions on AusTender written in opaque corporate jargon, we have no idea about the terms of these agreements, and whether they’re being met. The state of the vaccine rollout, and McKinsey’s recent extension, suggests things aren’t going too well.
And the consulting firms themselves prefer to keep things quiet. McKinsey, for example, which has recently courted controversy over its role in the US opioid epidemic, has a policy of insisting on no media fanfare about its work — hence the absence of any government media release acknowledging its role. Comment requests from the firms are usually stonewalled.
Transparency International has been warning governments against a lack of transparency over the development, procurement, allocation and distribution of COVID-19 vaccines. It is concerned requests for information under freedom of information powers are being denied in some instances.
“This kind of situation where the government really has a national emergency that it needs to deal with highlights the problem in not having a workforce that is employed by them and able to cope with the task,” Wilson said. “You fall into these difficulties around transparency. It accentuates the problem.”