Consultancy Firms Get Federal Ethics Warning

A major consultancy firm has been warned the federal government expects it to uphold the highest ethical standards, as a departmental review gets underway.

Consultancy firms working with federal government departments must uphold the highest ethical standards, a minister said, as a departmental review into the conduct of the sector continues. The warning follows months of scrutiny over how consultancies win contracts and manage conflicts of interest.

The review, led by the Department of Finance, is examining procurement practices and the use of external advisers across multiple agencies. A spokesperson for the minister said the government would not tolerate any firm that failed to meet its obligations under the Commonwealth Procurement Rules.

The consultancy sector has faced growing pressure since a parliamentary inquiry last year raised questions about billing practices and the revolving door between firms and public service roles. The inquiry's final report, released in March, recommended tighter disclosure requirements for contracts above $100,000.

One of the firms under review declined to comment on the minister's statement. The review is expected to report its findings by the end of the third quarter.