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 not available within Defence, 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, their location and associated travelling costs, the level of local support for the duration of the engagement, and their professional standing and reputation. The process for selecting consultants is consistent with Defence's procurement policies and the Commonwealth Procurement Guidelines.
During 2005–06, 494 new consultancy contracts were entered into involving total contract values (inclusive of GST) of $64.4m and actual expenditure of $39.5m.
Table 6.31 provides a summary of the 379 consultancy contracts let during 2005–06, with a total contract value of $10,000 or more (inclusive of GST) with a total value of $63.838m. More detailed information, including a list of all consultancy contracts let during the year to the value of $10,000 or more, is available in the internet version of the annual report at www.defence.gov.au/annual reports.
There were 115 consultancy contracts, each under $10,000 (inclusive of GST) in contract value, let during 2005–06 to the total value of $0.515m.
In addition, 239 ongoing consultancy contracts were active during the year, involving total actual expenditure of $17.671m. Total expenditure on all consultancy contracts in 2005–06 was $57.122m.
The increase in expenditure in 2005–06 is due primarily to the further impact of the two pass project approval process that has been implemented for the Major Capital Facilities Program. More consultancy work is required prior to project consideration by the Government and Parliament.
Note:
- From 1 July 2005, the DMO was created as a prescribed agency. This table excludes DMO expenses, which are reported in the Defence Annual Report 2005–06—Volume 2 (DMO).