Annual Report 2004-05

Consultancies

External consultants investigate assigned problems under limited direction or supervision and provide recommendations or options for improvement. They assist Defence management in decision-making, but do not implement those decisions. Consultants are usually engaged because they have the skills currently unavailable within Defence, or there is a need for specialist skills from external sources or a need for independent research and assessment.

When contracting with a consultant, value for money considerations relate not only to cost, but to the experience and demonstrated capabilities of the consultant, the location of the consultant and the associated travelling costs, the capacity of the consultant's locally-based resources to provide continuing services at levels likely to be required during the course of the engagement, and the consultant's professional standing and reputation.

The process for selecting consultants is consistent with Defence's procurement policies and the Commonwealth Procurement Guidelines.

During 2004-05, 463 new consultancy contracts were entered into involving total contract values (inclusive of GST) of $56.677m and actual expenditure of $38.243m. In addition, 161 ongoing consultancy contracts were active during the year, involving total actual expenditure of $10.578m.

The increase in expenditure in 2004-05 is primarily attributable to consultancy work associated with the Major Capital Facilities Program. The value of the facilities projects approved in the program has increased from $295m in 2003-04 to $741m in 2004-05. The significant increase in project development activity, combined with the new two-pass project approval process, has required significant work by consultants (and hence expenditure) prior to project consideration by the Government and the Parliament.

Consultancy work relating to financial remediation and information technology development has also increased significantly over the previous year.

Table 7.7 provides details of consultancy contracts let during 2004-05 with a total contract value of $10,000 or more (inclusive of GST). More detailed information, including a detailed list of all consultancy contracts let during the year to the value of $10,000 or more, is available on the following pages.

Notes

1. In previous annual reports, the detailed information provided referred to actual expenditure on consultancy contracts rather than the total contract value.
2. Headquarters Joint Operations Command, shown separately in previous year, was merged into the Vice Chief of the Defence Force Group in 2004-05.
3. Corporate Services and Infrastructure Group includes data relating to the Inspector-General Group.
4. Secretary and Chief of Defence Force Group was created on 1 September 2004 and incorporates Public Affairs and Corporate Communication that was shown separately in the previous year.
5. Capability Development Group commenced operations from 1 July 2004.