Experts have long warned that outsourcing will stifle the public service, turning bureaucrats from policy thinkers into contract managers.
New data shows even that work is under threat, with agencies upping their spend on a handful of procurement specialists in 2026.
Procurement Co, ArcBlue, Qp3 Consulting, Procurement Professionals and, to a lesser extent, EMA advisory all, as the names suggest, market procurement and probity services to government.
Federal agencies spent about $7 million on these boutique to mid-sized firms in the year to date, according to new data from AwardedTenders, with Environment and Health among the biggest buyers.
Environment spent $1.54 million on these firms, almost two and a half times the year before, while Health spent $1.52 million, up 33 per cent.
With that said, one procurement services contractor who spoke on condition of anonymity said that there had been a drop-off in demand in the past 12 months, with demand from other major agencies almost completely drying up.
The spend on specialist firms was just the tip of the iceberg; agencies poured hundreds of thousands of dollars into the big four consulting firms and major law firms for procurement-related services in 2026.
Home Affairs staff, for example, signed off on $235,000 for "procurement and contracting services" with KPMG in April, and spent another $2 million on the five procurement and probity boutiques over two years.
There has been a drop in agency-level expenditure on the big four following scandals at PricewaterhouseCoopers and KPMG, suggesting that the procurement and probity boutiques could be eating their lunch.
DHA's spending on the big four dropped by more than half from 2024 to 2026 ($15.4 million), and Health's dropped 55 per cent to $43.3 million.
So what do we know about the firms that are advising government on how to buy work from other firms?
All five firms in the sample were founded in the past 30 years, most have headquarters in Canberra, and most have fewer than 50 staff.
ArcBlue is the exception; it had about 150 procurement specialists and analysts before it was bought by global consulting firm Bain & Company in 2022, but has retained its brand.
EMA advisory is probably the newest entrant, advertising that it has "supported ... agencies to plan, procure and deliver complex projects" since 2021.
Defending recent moves, a Department of Health, Disability and Ageing spokesperson said it engaged external procurement specialists to provide time-limited ICT procurement and commercial support where additional capacity or specialist expertise was required.
"This includes supporting procurement activities and the contract and commercial management of a complex IT contracting environment," the spokesperson said.
"Consistent with the APS strategic commissioning framework, the Department is committed to strengthening internal APS capability and reducing reliance on external labour.
"Procurement specialists currently engaged through contracting arrangements are supporting this by transferring skills and building the knowledge of APS staff."
Procurement Co and Procurement Professionals were engaged to help manage periods of increased demand when APS resources were unavailable, according to a staff member from another department who was not authorised to speak publicly.
Outsourcing was one of the few live issues in 2026 that still brought together politicians from across the political spectrum.
Liberal senator Richard Colbeck, who sat on the Senate committee that uncovered details on the PwC tax leaks scandal, said the Commonwealth would always need access to specialist external expertise from time to time, particularly for highly technical or short-term projects.
"However, procurement and contract management are core public service functions and agencies should retain sufficient capability to perform those functions effectively," Senator Colbeck said.
"One of the lessons from the consulting services inquiry was that governments cannot outsource accountability.
"Agencies remain responsible for ensuring taxpayers receive value for money and that contracts are managed appropriately, regardless of who advises them during the process."
Greens finance and public service spokeswoman senator Barbara Pocock, who sat on the same committee, said it was not possible for the government to rebuild the public sector if it continued to outsource core government work.
"The government is outsourcing the outsourcing work," Senator Pocock said. "What a joke!"
"We know that outsourcing public service work to the private sector costs three-times as much as hiring public servants to do the work and we know it's eroding our public service - so why this government is spending even more on consultants is beyond belief.
"Many young people are drawn to public sector employment to work on socially useful projects but then find that all the interesting jobs are contracted out.
"To see even the management and letting of contracts being outsourced adds insult to injury."
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