This article was originally published by Noel Towell in The Canberra Times on June 15th, 2017. Click here to read the original.
The Defence Department will pay $5.5 million for the services of just eight contractors hired as part of its future submarine program.
The contractors come from a subsidiary of the International Centre for Complex Project Management, a Canberra-based not-for-profit whose contracts on another big Defence-linked job were sharply criticised by the National Audit Office last year.
Kim Gillis, the man at the top of Defence’s Capability Acquisition and Sustainment Group (CASG) which has granted the lucrative contract, is a “fellow” of the ICCPM and used to work there as a director.
But the giant department says Mr Gillis has never been a signatory to contract with ICCPM or had any involvement in awarding work to the group.
Contracts notified on the Commonwealth’s procurement website Austender show the ICCPM offshoot, ICCPM Solutions, is to be paid nearly $5.5 million between late 2016 and mid-2019
The contracts are for “strategic planning consultation services”, “corporate objectives or policy development” and “management advisory services”.
A Defence spokesman confirmed on Wednesday that the work would be done by just eight “service providers”.
Contractors, consultants and “service providers” have been a hot topic at Defence since it was revealed in February that they now outnumber public servants at the sprawling department.
The news of the ICCPM Solutions spending comes in the wake of revelations that Defence is paying about $415,000 per year for each of six naval architects contracted from the private sector to work on the subs project.
Contracts between ICCPM and another government agency, AirServices Australia, for the Defence-linked OneSKY program were savaged in a National Audit Office report in August 2016.
The audit revealed a tangled web of relationships between Canberra-based Defence Department officials, private defence contractors, consultants and the federal government’s air traffic control agency and includes a lengthy list of ICCPM’s “associations as sources of potential, perceived or actual conflicts of interest.”
In response to a series of questions from Fairfax, a Defence Department spokesman said Mr Gillis, a former director of the ICCPM who is still listed as a “fellow” of the organisation, had nothing to do with awarding contracts to ICCPM solutions.
“Mr Gillis has had no involvement in awarding consultancy contracts to ICCPM,” the spokesman said.
“Mr Gillis has never been a signatory on a contract awarded to ICCPM.
“Mr Gillis resigned from the Board of ICCPM before rejoining the Department of Defence in August 2015.
“Mr Gillis has no active role with ICCPM.
“Mr Gillis was appointed a fellow of the ICCPM but as a result of his current position in Defence he plays no active role in the fellowship.”
The ICCPM did not respond to questions from Fairfax on Wednesday.
Workplace union Professionals Australia, which represents Defence engineers and other technicians, says the consultancy spending is wasteful.
“Defence should be investing in in house engineering and projects expertise, not wasting millions on consultants, particularly on projects like the future subs,” union official Dave Smith said.
“It would not only save the taxpayer money but ensure we retained expertise throughout the project and into its lifecycle.”
“The links between the contractors and the decision makers are not a great look and it’s disturbing that contracts of this magnitude appear not to have been signed off on by the head of CASG.”