Australia's Digital Health Agency will pay consultants up to $550,000 to develop "an insourcing strategy", in a direct response to new rules requiring the federal public service to slash spending on external labour.
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The small agency, which employs about 380 staff, approached the market on Tuesday, July 2, looking for a consultant to advise on building up its APS workforce and capability, for an estimated value between $250,000 and $550,000.
The work will help the agency to bring the delivery of digital services, including the My Health Record, in-house over a 12-month period, and even includes an option to extend by another year.
"The Agency is requesting advice from an experienced partner to support and inform planning around future capability for a government organisation with a focus on insourcing internal development and operations of digital health products and services," documents released on AusTender read.
The successful tenderer will be required to develop "a set of principles, a framework, an operational model and a proposed roadmap for insourcing products and services that the Agency can implement from as early as the last quarter of 2024".
![Health Minister Mark Butler (left) and opposition spokesperson on health, Anne Ruston. Pictures by Phillip Biggs, Sitthixay Ditthavong Health Minister Mark Butler (left) and opposition spokesperson on health, Anne Ruston. Pictures by Phillip Biggs, Sitthixay Ditthavong](/images/transform/v1/crop/frm/143258707/8ad0cb5e-0b4e-4b58-be80-b0f311b87d16.jpg/r0_0_2560_1439_w1200_h678_fmax.jpg)
Anne Ruston, the opposition spokesperson for health and aged care, called it "unbelievable that the government is outsourcing more than $500,000 of taxpayer money to provide advice on insourcing".
"With more than a 20 per cent increase in staff headcount over the past year, you would think that this process could be managed by the agency internally," Senator Ruston said, referencing an increase to funded roles at the agency in the 2024-25 year.
"This is just another example of the Government wasting taxpayers' money on bureaucratic nonsense."
The tender documents directly reference new rules introduced by the Albanese government last year, which require agency heads to set targets to reduce their reliance on outsourced labour by June 2024. Progress must then be reported in annual corporate plans from the 2024-25 financial year.
It is part of the government's plan to find $1 billion in savings by the end of June 2028, by cutting contractors, consultants and labour hire across the service.
The targets will also get the books ready for an audit of public service employment next financial year, where Public Service Minister Katy Gallagher expects to see a "pretty significant reduction" on a workforce of nearly 54,000 outsourced roles in the 2021-22 financial year, which cost $20.8 billion.
Labor has in turn increased the Average Staffing Level - the full-time equivalent measure used in the budget papers - of the public service by about 36,000 places since their first budget in October 2022.
Asked whether the contract was in line with government expectations, a spokesperson for the Australian Digital Health Agency said it required external expertise for the "complex and technical work".
"The agency is reshaping and evolving the national digital health infrastructure, including which aspects of this complex information technology services portfolio may be best configured and delivered in house," they said.
"This is complex, technical work and the agency is seeking external expertise to ensure it is delivered effectively."