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First Principles Review initiatives see consultancy spend increase

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Defence has attributed the $244.7 million spent on consultancy contracts between 2016-17 to reforms stemming from the 2015 First Principles Review.

Defence has attributed the $244.7 million spent on consultancy contracts between 2016-17 to reforms stemming from the 2015 First Principles Review.

In a submission to a parliamentary inquiry into government procurement spending, the Department of Defence said the jump in consultancy spending stemmed from the Smart Buyer Framework and reforms to the department's Capability Acquisition and Sustainment Group (CASG) system program.

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The $244.7 million spend is an increase on the $90.7 million spent during 2015-16.

In its submission to the inquiry, Defence said the expenditure on new consultancy contracts has gone down since 2014-15 and it is expecting overall costs to eventually decrease.

The top three consultancy spending categories for Defence from 2012-13 to 2016-17 were in management and strategic advice ($103.3 million), legal and compensation ($70.1 million) and land decontamination advisory ($26.3 million).

As part of the defence portfolio's 2017-18 budgetary commitments, the government said it would look to find savings and try and ensure every dollar spent towards defence is used effectively through the reduction of consultants and contractors.

At the 2017 December Senate estimates, Deputy Secretary of CASG Kim Gillis confirmed a new payment process for defence consultants is due for release in the coming months, noting he and Defence have been working on a new tendering process to significantly reduce the daily rates of consultants within Defence.

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"On behalf of all the groups in Defence, I've been working on a re-tendering process for major service providers, which will result in a significant reduction in the daily rates that we're paying," Gillis said.

Defence's submission to the inquiry also showed, unsurprisingly, the top four suppliers from 2012-13 to 2016-17 were Thales, BAE Systems, Boeing and construction company Lend Lease Building. The department spent the highest amount – $13.4 billion – on foreign military sales between 2012-13 to 2016-17.

 

First Principles Review initiatives see consultancy spend increase
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