The Department of Defence has spent nearly $20m on consultants to help with an overhaul intended to save taxpayers’ money.
The costs were linked to the hiring of 11 consultancy firms to implement the so-called first-principles review, which aimed to ensure Defence was “fit for purpose” and used “the minimum resources necessary”.
The biggest of the consultancy contracts disclosed by the department was an $8.5m deal with Bechtel to help with procurement reforms.
Defence said it had also reached a $7.1m contract with Partners in Performance “to assist with the change management process, reporting and governance within the implementation office”.
The Sweett Group was being paid $804,312 to help with a new push to sell Defence properties that were no longer needed.
The review – completed in April 2015 – pointed to a previous report earmarking 17 sites for closure out of 75 major bases and estimated the disposal of these properties could reap $1.4bn over 30 years, including $570m from sales.
The extent of consultancy work has been laid bare in the department’s answer to a question it took on notice from Labor’s defence spokesman, Stephen Conroy, during the previous round of Senate estimates hearings.
The other firms contracted to help with implementation include Ernst and Young, Deloitte, Rand Corporation, Helmsman International, PwC, Deloitte Touche Tohmatsu Limited, and ACIL Allen Consulting.
KPMG won two contracts totalling $390,240.
The department said the consulting firms, which were being paid a combined total of $19.4m, “must work in close partnership and collaborate with defence staff”.
The answer to the question on notice also named five other consulting firms that were contracted prior to the first-principles review and would now “contribute in varying extents” to the implementation.
The cost of those projects was not available, the department said, “but they have been included for completeness”.
The Coalition promised before the 2013 election to launch a defence review aimed at cutting waste in the bureaucracy and improving accountability.
The review panel, headed by the former Rio Tinto boss David Peever, called for a shakeup including the abolition of the Defence Materiel Organisation after finding defence structures were “complicated, slow and inefficient”.
When the government released the report, the then defence minister, Kevin Andrews, estimated about 1,000 civilian jobs would be lost. He said the changes would provide “better value for taxpayers” and any cost savings would be re-invested in the Australian defence force.
