A parliamentary committee has recommended investigating whether ICT vendors are engaged in ‘inappropriate cultivation of Commonwealth officials’, after finding NDIA officers failed to disclose years of secret gifts and hospitality from global IT giant Salesforce.

The inquiry into procurement at Services Australia and the National Disability Insurance Agency found a failure to disclose Salesforce’s gifts and hospitality, despite the company securing lucrative government contracts and massive variations.

The report by the Joint Committee of Public Accounts and Audit follows an interim report in September 2023. That report looked at the activities of the Synergy 360 consulting firm as an advisor to the technology company Infosys in obtaining government IT contracts, and raised questions about potential financial impropriety and improper relationships.

In its final report released last week, the committee investigated the procurement of NDIA’s new customer relationship platform, known as the PACE system, from the US based company Salesforce.

The committee says ‘the most egregious issue to arise from this procurement activity’ is what appeared to be clear breaches of the NDIA’s gifts and hospitality policy by officials over a long period of time.

“Although NDIA gave evidence that no declarations of any hospitality relating to this contract were made by its staff, Salesforce subsequently provided written evidence of more than 100 instances of hospitality and/or gifts, including meals, drinks and golf outings, passing to NDIA officials over an almost five-year period,” committee chair Julian Hill said.

“This was before and after the award of the contract, and throughout the period of contract variations.

“The premise stated by NDIA for its hospitality policy is that none of its officials should accept gifts that could be seen to compromise their integrity. This was clearly not followed.”

Mr Hill said the committee found ‘very significant’ contract variations, which saw Salesforce’s contract value rise from an initial $27 million at inception in April 2020 to $135 million by October 2023.

He added it was perplexing that “value for money assessments in this procurement gave no explicit weighting to price as a key factor in scoring and ranking proposals.”

“Other vendors were basically denied the opportunity to tender for the product ultimately being delivered,” he said.

Other tech providers in firing line

The Committee makes five recommendations, including that the Department of Finance and the DTA investigate the extent to which inappropriate cultivation of Commonwealth officials may be occurring by major ICT vendors.

“Given concerns regarding potential systemic inappropriate cultivation of public servants by Salesforce over a long period of time the Committee is requesting a further report on all hospitality Salesforce has provided to Commonwealth officials in all entities over the past three years,” the report says.

It says the evidence also raises concerns about whether similar activity by other tech providers is widespread across the public sector.

“The Committee therefore makes recommendations to the Department of Finance, the Digital Transformation Agency and the Australian National Audit Office suggesting a broader examination of these issues in relation to a selection of major ICT vendors – for example Data#3 Group, SAP, Dell Australia, Oracle, and Amnesium Pty Ltd – or others as may be decided,” the report says.