PwC Could Face Barring from State Government Contracts

Key Highlights :

1. PwC could be barred from tendering for State Government contracts as the Department of Finance continues to monitor how other jurisdictions respond to the unfurling crisis rocking the Big Four consulting firm.

2. PwC, which had become one of the Commonwealth Government’s most prominent contractors in recent years, has faced weeks of turmoil after it was revealed national chief executive Tom Seymour was aware former partner Peter-John Collins had leaked sensitive Treasury information to clients regarding then-undisclosed aspects of new multinational tax laws.

3. Mr Collins was deregistered by the Tax Practitioners Board in January, with Mr Seymour resigning his post in May. Pressure has since mounted for PwC to be disbarred from future contracts, with Treasurer Jim Chalmers telling ABC Radio in May that Treasury and Finance would in future take “character and past behaviour into consideration when (awarding) new contracts”.

4. A spokeswoman for the State Department of Finance said WA’s procurement framework had “robust” contractual conditions to mitigate the risk of confidential information being shared publicly.

5. While the Commonwealth Government has signalled it will take a dim view of contract bids from PwC in future, it’s understood the State Government’s debarment regime, enacted in November 2021, provides the Department of Finance a clearer process for turning away potentially problematic contractors, with serious contract violations incurring a ban of up to five years.

6. WA is the only state in Australia to have enacted such a policy.

7. Calls for action to be taken against PwC on Monday drew the support of Australian Securities and Investment Commission chairman Joe Longo, who said the firm needed to be “held accountable” if it had any hope of restoring “trust and confidence” in its services.

     PwC Australia could be barred from tendering for State Government contracts as the Department of Finance continues to monitor how other jurisdictions respond to the unfurling crisis rocking the Big Four consulting firm. The turmoil began when it was revealed national chief executive Tom Seymour was aware former partner Peter-John Collins had leaked sensitive Treasury information to clients regarding then-undisclosed aspects of new multinational tax laws. Pressure has since mounted for PwC to be disbarred from future contracts, with Treasurer Jim Chalmers signalling the government will take “character and past behaviour into consideration when (awarding) new contracts”.

     WA is the only state in Australia to have a debarment regime, enacted in November 2021, which provides the Department of Finance a clearer process for turning away potentially problematic contractors, with serious contract violations incurring a ban of up to five years. Papers tabled in State Parliament show PwC has been awarded approximately $6.25 million in work since Labor came to government in May 2017. Most of PwC’s work was awarded on or after June 2020, when the firm was contracted by multiple departments to deliver a series of projects relating to the State’s response to the COVID-19 pandemic.

     The Commonwealth Government has signalled it will take a dim view of contract bids from PwC in future, and calls for action to be taken against PwC drew the support of Australian Securities and Investment Commission chairman Joe Longo, who said the firm needed to be “held accountable” if it had any hope of restoring “trust and confidence” in its services. The Commonwealth Government referred PwC to the Australian Federal Police in May.

     The State Department of Finance has a set of standard terms and conditions to engage contractors which include provisions to protect the State’s interests, including protection of the State’s confidential information. If a confidentiality breach was to occur in WA, there are clearly stated contractual remedies to manage the issue. Any effort to ban the firm could have a significant impact on the state, with PwC having been awarded nearly half of the $12.7m in contracts awarded to the Big Four since 2017.

     The Department of Finance is continuing to engage with other jurisdictions across the country to stay informed on actions being taken, and it’s clear the State Government will take character and past behaviour into consideration when awarding new contracts. PwC’s most lucrative work in WA was developing the business case for a women’s and newborn hospital, to be built at Fiona Stanley Hospital, for which the firm was paid $2.85m.

     It remains to be seen whether PwC will be barred from tendering for State Government contracts in WA, but the Department of Finance is clearly monitoring the situation and will take appropriate action if necessary. In the meantime, the Commonwealth Government has signalled it will take a dim view of contract bids from PwC in future, and it’s clear the firm needs to be held accountable if it has any hope of restoring trust and confidence in its services.

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