Government agencies spent $64.5 billion on procurement in 2018-19 and $490.8 billion over the last ten years, an audit shows.

The average value of contracts has grown from $393,000 in 2011 to $825,000 in 2019, according to the Australian National Audit Office’s Australian Government Procurement Update published on March 11.

The ANAO also found yearly growth in consultancy contracts over the last five years to almost $650 million, largely to plug a gap in specialist skills.

Limited tender, which provides the least amount of competition, is the most common procurement approach with more than half the contracts awarded over the last ten years resulting from a limited tender.

Dominant suppliers

The audit also showed that a small number of suppliers including IBM, Telstra and Boeing are dominant suppliers.

Commercial, military and private vehicles represent almost one quarter of all contracts reported to Austender.

Rounding out the top five procurement categories are management and administrative services; engineering, research and technology; construction and maintenance, and IT broadcasting and telecommunications.

“Within those five categories, it has been common for a small number of suppliers to dominate,” the ANAO says.

The top supplier was the US government FMS (Foreign Military Sales) program, which won $16.8 billion worth of contracts over ten years for the supply of military and private vehicles.

Telstra won contracts valued at $8.2 billion for telecommunications and Lend Lease won $4.7 billion for building and construction. Boeing Defence was awarded contracts worth a total of more than $9 billion across defence, IT and engineering.

Meanwhile, a small number of suppliers got the lion’s share of contract value in a number of categories.

Overall, there were ten procurement categories where one supplier was awarded more than 40 per cent of the total contract value.

They included insurer Mondial Assist with 82 per cent for the market in personal and domestic services and Thales Australia, which garnered 75 per cent of the market in the supply of chemicals with a total contract value of $1.5 billion over ten years.

Consultancy contracts

 The report also found yearly growth in consultancy contracts over the last five years, increasing from $365.9 million in 2013-14 to $647 million in 2018-19.

That figure takes the bill back to what it was in 2009-10.

The need for “specialised or professional skills” was the reported reason consultancy contracts over the last 10 years.

ANAO identified eight companies which were “significant providers” of consultancy services including KPMG, AECOM, Mckinsey, GHD, EY, Deloitte, Clayton Utz and PWC.