Department of Agriculture secretary Andrew Metcalfe defends PwC partnership as efficient under Coalition APS staffing cap

Mr Metcalfe told a Senate estimates hearing on Wednesday the department had approached the market to boost its capability in order to deliver additional measures associated with the government's response to COVID.

"The department was being asked to do a great deal more by government and was not going to be provided with the ability to recruit public servants to do that work," Mr Metcalfe said.

"And therefore by definition, we would need to be using more consultancies and contractors to deliver that additional work."

Under the Coalition government, the average staffing level across all APS agencies was expected to be equivalent to 2006-07 levels, at around 167,596. The Albanese government has since abolished the staffing cap.

The partnership with PwC resulted in the firm receiving $22.8 million as a strategic partner, and $17.4 million as a delivery partner, the hearing revealed. The partnership ended in early 2022, ahead of the federal election.

Mr Metcalfe said he had "absented himself" from the procurement process because of a six year stint as a partner at EY between 2013 and 2020, noting his previous firm had also been a tenderer.

The successful tenderer, PwC, has been the subject of scrutiny since January, when it was revealed a then-partner at the firm had shared privileged information about the ATO's multinational tax avoidance strategy to clients of the firm.

Questions about the firm have continued this week, as senators seek to find out how much money departments have paid it, and what precautions they have in place.

An audit report released in April also found PwC used confidential information, gained through its partnership with the then Department of Agriculture, Water and Environment, to make an unsolicited proposal.

In November 2021, the firm "offered an Information Technology solution to DAWE as a result of insights gained by the strategic partner firm from attending ELT [Executive Leadership Team] meetings".

"We dealt with that very properly," Mr Metcalfe told senators, following a report on the incident in Guardian Australia.

"We indicated that we were unhappy with that approach, and indeed, it was only ever a conversation that they wished to have, it wasn't a formal wasn't a formal bid for services and we certainly didn't contract any services."

"We actually took the opportunity to remind PwC of their obligations."

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The agriculture secretary said, though he would not repeat such a partnership, it had been an efficient use of resources in the context.

"Overall, it's something I'm quite proud of, because we had a series of objectives," he said.

"One was to to be efficient in the way we acquired consulting services, rather than spending huge numbers of hours and time in going out on multiple occasions.

"We did that in a highly efficient way, and with the way with the utmost probity."

"Secondly, we were able to negotiate rates that were way better than if we'd simply gone on a sort of, you know, one-off basis."

He added that in the wake of the Thodey review into the direction of the public service, and an internal review on the department's capability, there was great concern about skills capability.

"Almost all of that work that was done, was done in blended teams," Mr Metcalfe said of the partnership.

"We actually worked together and where they brought skills and methodologies that were not familiar in the public service and, frankly, we're a stronger organisation because of that skills transfer."

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