Chair's Foreword

The Committee’s Interim Report tabled in September 2023 focussed primarily on the activities of the Synergy 360 consulting firm in advising the multinational software company Infosys in obtaining Government contracts. The Committee also investigated the alleged involvement of Synergy 360 with former Minister Stuart Robert and whether misconduct had occurred due to its clients having privileged access to him while tendering for Government business.

The Committee made no findings of malfeasance in relation to any individuals involved based on the evidence that it received. Regrettably, however, a number of the Committee’s requests via formal summons for witnesses to appear and for documents to be presented in relation to these alleged activities were wilfully ignored. These matters were therefore handed over by the Committee to the National Anti-Corruption Commission for its consideration as it has the necessary investigatory powers and resources to potentially resolve these questions should it choose to do so.

As a second recommendation, the Committee sought approval from the Speaker of the House of Representatives to commission legal advice on the extent of its statutory powers to summon witnesses, particularly in circumstances where an individual is overseas. This was to provide clarity for future inquiries where these powers may again need to be exercised. A response to the Interim Report is awaited with interest.

This final report focuses on the award of a large contract to the ICT vendor Salesforce by the National Disability Insurance Agency (NDIA) for a new customer relationship and management software platform, known as the PACE system. Evidence received indicates that PACE has been working appropriately.

Unfortunately, however, aspects of this procurement conducted by NDIA fell short of the Commonwealth Procurement Rules and ethical requirements.

The Watt review did not make specific findings of misconduct in relation to the PACE contract award but did identify deficiencies in NDIA’s procurement management. This led to an internal review being initiated by NDIA that remains ongoing.

The Committee was surprised to find that no explicit price weighting was included in NDIA’s value for money assessments when ranking the tender proposals for this procurement and makes a recommendation regarding this.

Very significant contract variations were examined closely by the Committee. Variations saw Salesforce’s contract value rise from an initial $27 million at inception in April 2020 to $135 million by October 2023. While some of this was explicable by a necessary expansion of user licences, a substantial proportion was due to significant changes in scope. Of concern is that other vendors had no opportunity to tender for the product that was ultimately delivered as these variations in scope occurred after the contract had been awarded. In addition, more than $20 million was added to the Salesforce contract for ‘professional services’ raising questions about cost control and value for money assessments.

The most egregious issue to arise from this procurement activity however is what appear to be clear breaches of the NDIA’s Gifts and Hospitality policy by officials over a long period of time.

NDIA informed the Committee that any gifts or benefits of over $100 in value must be pre-approved and then recorded in a compliance log but that no such disclosures had been made in relation to the Salesforce contract.

The Committee then received a detailed itemised list from Salesforce containing more than 100 instances of hospitality and/or gifts passing to NDIA officials over an almost 5-year-period both before and after the PACE contract bid and award, and throughout the periods of the contract variations. These included close to 50 items above $100 in value per person including meals, drinks and golf outings.

The premise stated by NDIA for its hospitality policy is that none of its officials should accept gifts that could be seen to compromise their integrity. NDIA further stated in a hearing for the inquiry that ‘it would be hard to see how a contract manager could maintain their integrity whilst accepting gifts from a vendor.’ The NDIA also gave evidence that an obligation on officials to not accept any gifts commences the moment a procurement starts to be planned. The Committee concurs fully with these principles.

Breaches of disclosure requirements and gifts and hospitality policies are simply unacceptable. It is understood that NDIA officials would need to engage with counterparts at Salesforce during the operation of this substantial contract. Some social elements to this may be reasonable, but any such interactions must be carefully conducted and managed to ensure that probity and integrity standards are maintained.

The Committee is not privy to, nor has it sought, the identities and roles of the NDIA officials who accepted gifts from Salesforce and does not have a remit to investigate these individuals. It is understood that NDIA is taking this matter seriously and the Committee welcomes this.

This episode raises further serious questions about how widespread this sort of practice and culture may be in other Commonwealth entities by Salesforce and other major ICT vendors. The Committee has sought additional information from Salesforce regarding the operation of its self-styled ‘Office of Global Ethics and Integrity’ which is supposed to have individually approved every instance of hospitality to government officials worldwide.

Given concerns regarding potential systemic inappropriate cultivation of public servants by Salesforce over a long period of time the Committee is requesting a further report on all hospitality Salesforce has provided to Commonwealth officials in all entities over the past three years.

The evidence to the inquiry has shown overlap over a long period of time between the aforementioned hospitality events and gifts, undeclared meetings between former Minister Stuart Robert, Synergy 360, and Salesforce, and major and ongoing procurement activity and contract management by NDIA in relation to the PACE system.

The Committee has already substantially addressed issues relating to former Minister Robert and Synergy 360 in its Interim Report but finds it concerning that no records of discussions at three separate meetings with Salesforce are available. There is no evidence either that other tenderers or potential vendors who were not clients of Synergy 360 were afforded the same opportunity to engage with the then Minister. Ultimately, it was Salesforce that had this access, secured a major government contract and later benefited from a series of lucrative variations and provided undeclared hospitality to government officials.

The Committee makes five recommendations in this final report that include updates from NDIA on both its internal procurement review and on the continuing implementation of the PACE system, including anticipated cost savings; action by the Department of Finance and the Digital Transformation Agency to assess whether any inappropriate cultivation of Commonwealth officials by different ICT vendors is occurring; and a consideration by ANAO of possible future audits in relation to gifts and hospitality issues in the public sector.

I acknowledge the work and the professionalism of the Committee secretariat in supporting this inquiry.

Julian Hill MP

Chair