PwC off government panels

Consulting giant PwC has been suspended from two WA government procurement panels as fallout from its tax advice scandal continues but competitors KPMG and Deloitte face no such problems.

KPMG and Deloitte have won state government contracts this month worth nearly $1.2 million, including for a review of the state’s battery and critical minerals industry strategy.

PwC has not fared as well, to say the least.

The Department of Finance has suspended PwC entities from two common use arrangements, covering audit and financial advisory services and information and communications technology (ICT) services.

The suspensions occurred at the start of this month “as an added precaution”, a spokesperson told Business News.

They added the Department of Finance was conducting due diligence before deciding if it will continue dealing with the PwC entities.

“The Department of Finance continues to monitor the PwC situation and is in contact with State agencies about the ways in which they should review current arrangements with PwC,” the spokesperson said.

The spokesperson also flagged the possibility of contracts being transferred away from PwC.

“Finance has pre-existing procurement practice guidance for agencies who are considering if they should transfer a contract,” they said.

“Finance is in regular contact with State agencies and has encouraged those who have existing contracts with PwC to familiarise themselves with this guidance.”

These changes follow revelations this year that PwC partners had used confidential Tax Office information to win new business.

PwC has responded by selling its public sector consulting practice to private equity investor Allegro for $1, with the transaction due to be completed by the end of this month.

The carve-out of the new firm, to be known as Scyne Advisory, is dependent on establishing its position on government procurement panels around the country.

It Is expected to have more than 100 partners, including several in WA, and about 1500 staff.

PwC generated about 20 per cent of its Australian revenue from government work – more than any other consulting firm.

The same applied in WA, where PwC won $4 million of government contracts in the year to June 2022.

Meanwhile, KPMG’s recent wins include a $232,000 contract to advise the Department of Jobs Tourism, Science and Innovation on a review of the state’s battery and critical minerals industry strategy.

Originally released in 2019 as the Future Battery Industry Strategy, it was widened a year later to include critical minerals - a term that usually covers the likes of lithium, nickel, graphite and rare earths.

A government spokesperson said the sector has been rapidly evolving and the context in which the strategy was originally developed has changed vastly.

“Western Australia has seen significant advancements to its local battery and critical minerals industry, and changes to the local investment environment,” they added.

“This has prompted the need to reconsider, and potentially reprioritise activities and areas of focus under the strategy.”

KPMG has also won a $498,000 contract to advise the Department of Education on five business cases to support budget submissions and guide its procurement activity.

Deloitte recently won a $440,000 contract to advise the Department of Finance on its ServiceWA business case.

“Under this program, Finance is exploring ways of providing services through single, easy to use entry points,” a spokesperson said.

“Deloitte has been appointed to assist government to develop a business case looking at the future of whole of government service delivery models.

“The business case will review a range of unified service delivery models and build on two successful WA initiatives.”

These are the ServiceWA centre in Bunbury which has been operating since 2020 and brings together more than 80 services from five different agencies, and The ServiceWA app.