Defence Department Ends Deloitte’s Nuclear Submarine Adviser Contract Just Weeks In

Offices of Deloitte are seen in London, Britain, September 25, 2017. (Reuters/Hannah McKay - RC1614FC2010).

Consultancy giant Deloitte has had its contract as an adviser to the Australian government’s nuclear submarine program terminated weeks after the contract began.

Australia’s Defence Department ended the $1.8 million contract with Deloitte on Aug. 11 using a convenience clause, reported the Australian Financial Review (AFR).

A convenience clause allows either party to terminate a contract at its discretion without the need to show who is at fault.

The 12-month advisory contract with the newly established Australian Submarine Agency, which is responsible for the management of the AUKUS program, was originally scheduled to conclude by June 2024.

A spokesperson for the Defence Department said that the cessation of the contract with Deloitte was “not related to performance or any actual, potential or perceived conflict of interest,” reported the AFR.

“The Australian Submarine Agency engages a range of advisers to assist from time to time and will continue to consider its requirements and engage advisers where appropriate.”

However, The Australian reports that alleged “foreign defence interests” were being probed by the Defence Department over the Deloitte adviser who was commissioned to undertake the advisory role.

The Epoch Times has approached the Australian Defence Department and Deloitte for comment.

The agency had advertised 63 different tenders since it was established on July 1.

AusTender records show that Deloitte was the largest external service provider to the agency, with consultancy giant KPMG coming in second, securing four contracts worth over $2 million (US$1.14 million).

Consultancy Firms Criticised For Allegedly Over-Charging Government

The termination of Deloitte’s contract comes amid concerns that the big four consulting firms have overcharged the government.

Australia’s big four consulting firms are PricewaterhouseCoopers (PwC), KPMG, EY, and Deloitte.

It also comes amid increasing scrutiny over consultancy firms’ dealings with the government, particularly after PwC’s high-profile confidentiality breach, where secret federal tax information was shared to drum up new business.

In May, PwC’s Acting Chief Executive Kristin Stubbins said that internal investigations by the consulting giant showed its behaviour was unacceptable.

“I apologise to the community; to the Australian government for breaching your confidentiality; to our clients for any questions this may have raised about our integrity and trustworthiness; and to the 10,000 hard-working, values-driven PwC Australia partners and staff who have been unfairly impacted,” she said.

“I am fully committed to taking all necessary actions to re-earn the trust of our stakeholders. And as we work through this process, I am committed to being fully transparent.”

Labor Senator Deborah O’Neill, who is a critic of the big four consulting firms and is key in the parliamentary inquiry examining the consulting firms, said Deloitte could be probed further about its recently terminated contract.

“If they are recalled, I will be there asking questions and seeking the truth for the Australian people. I think it is clear that I will support all efforts to make this opaque sector much more accountable and transparent,” Ms. O’Neill told AFR.

“We pay for the consultancies in government departments. We have a right to expect integrity and value for money in every instance.”

In July, the former chair of the Australian Competition and Consumer Commission (ACCC) told a Senate committee that governments have become too dependent on the major consulting firms, which meant they paid whatever the asking price was.

The federal government has committed to reducing its spending on external consulting firms by $2 billion by utilising more in-house teams.