Senior public servants have been accused of misleading parliament over a $1.7m contract awarded to a consultancy firm for welfare policy research the government refuses to release.
The secretary of the Department of Social Services, Ray Griggs, speaking to parliament, confirmed on Thursday he was investigating whether the handling of the contract awarded to Boston Consulting Group breached commonwealth procurement rules.
The admission follows an ongoing freedom of information battle between the department and Guardian Australia over the research, with the questions over the contract first raised in parliament by the Labor frontbencher Katy Gallagher 15 months ago.
The bulk of the research, which Guardian Australia sought under FOI laws, remains a secret in part because the department has ruled disclosure may harm Boston Consulting Group’s business interests. There is no suggestion of any wrongdoing from BCG.
Gallagher told Senate estimates on Thursday she was considering a referral to the privileges committee.
Gallagher complained past answers officials had provided about the contract misled parliament about the nature of the research.
“It does look to me that the committee has been misled on a number of times, through my questioning and through misleading questions on notice,” she said.
At issue is a $1.7m extension to an initial contract awarded to Boston Consulting Group worth about $1.5m. The initial contract was for a report into the Disability Employment Services program. BCG’s damning report, which officials initially refused to release to Senate estimates, was eventually released to Guardian Australia under FOI laws.
Before the report was released publicly under FOI, a department official had told Senate estimates the initial BCG report had no recommendations, though it was later revealed to have had more than 60.
However, officials have remained tight-lipped about what the department got for the extra $1.7m, only saying it was for “additional policy research” that related to people with “partial capacity to work”. One official insisted there was no report provided by BCG.
In December, the department released to Guardian Australia about 300 slides of the “additional policy research”, which included an “executive summary” and appeared to be focused on analysis of people on working-age welfare payments.
Most pages were redacted, with the department arguing release of the research may harm BCG’s business interests by disclosing its modelling methodologies.
Gallagher asked in parliament how this could not have been considered a report.
She has argued the contract should not have been extended without a fresh procurement process given it was clearly unrelated to the initial tender.
“Officers … think that it’s absolutely OK to double, in fact, more than double” the price of one contract with an unrelated piece of work and not allow any transparency or accountability about that,” she said.
“It was $3.3m of taxpayers funds … of which half of that was hidden in another contract saying it was about a mid-term review of the disability employment services program.”
Griggs told Senate estimates on Thursday he was investigating the contract, including whether commonwealth procurement rules had been breached.
Griggs conceded there had been “non-compliance with internal processes” and “less than better practice” with the commonwealth procurement rules.
He said he had already taken a number of steps to tighten the department’s procurement processes.
Griggs also promised to investigate whether the FOI decision used to suppress the research was correct.
Kathryn Campbell, who was the department secretary at the time, is not accused of wrongdoing. Campbell is now the secretary of the Department of Foreign Affairs and Trade.
The social services minister, Anne Ruston, said she was sure officials would have provided information to parliament in “good faith”.
