Defence scrutinised on PwC involvement in tech contracts

Defence is facing pressure to review its use of PwC staff in the wake of scandal engulfing the consultancy, with specific questions raised about their involvement in active technology projects.

The Department of Defence is PwC’s biggest Australian government customer, but in spite of the scandal engulfing the accounting and advisory giant, has not yet re-checked the integrity of staff working on its contracts.

The department told Senate Estimates on Tuesday it has more than $223 million of contracts with PwC.

The consultancy is in turmoil after it emerged that partners who advised the former Liberal government on how to improve the way multinational companies were taxed, then advised their clients how to work around the new rules. 

Greens senator David Shoebridge criticised Defence for not conducting integrity checks on PwC staff since the firm’s tax consultation scandal broke.

CFO Steven Groves said Defence had assurance from PwC last week, and again Monday, that none of the individuals associated with the scandal had worked on Defence contracts.

However, further questions by Shoebridge revealed that Defence is yet to independently verify this is the case.

The Greens senator singled out technology contracts won by PwC: project management for the Defence SECRET network; and a personnel contract for cyber security staff.

The Defence SECRET network contract, contract notice CN3794965, has increased in value from $6.4 million to $19.2 million.

Defence secretary Greg Moriarty said: “That particular contract is provision of project management services … that increase was as a result of the project extending. It went longer, and was an approved extension in the scope of that project”.

The department advised Shoebridge that PwC has 54 staff working on the SECRET network project, and Shoebridge asked whether additional integrity checks had been conducted on those staff since the scandal broke.

Moriarty said the department is pursuing “a number of things”, beyond what has already taken place.

“There will be additional engagements in the days and weeks to come. We are also taking government direction, and taking the lead from the department of finance, which is playing a lead role in relation to this matter.”

CTO Justin Keefe told Shoebridge PwC’s engagement is in a project management capacity, rather than a technology domain-specific capacity.

Its staff, Keefe said, would have access to “project management information" only.

"In terms of the technical aspects of that project, that is undertaken by other firms," he said.

Shoebridge also asked about a Cyber Warfare Division contract with PwC for $3.6 million, contract notice CN3909348.

Chief of joint capabilities, General John Frewen, said this is primarily a workforce contract, under which between seven and eight PwC staff are embedded in Defence.

Once again, the department said it has not re-conducted any integrity checks since the PwC scandal broke, with Moriarty re-stating that Defence is working under direction of the government and the departmen of finance.