Aged-care contracts blow out by $227.9 million

IT costs associated with the new Aged Care Act blow out by at least $227.9 million .

One contract is already valued at more than eight times what was originally estimated, and another is now costing taxpayers nearly five times its original valuation.

Modernisation of IT is a key part of the Albanese government’s response to the Royal Commission into Aged care Quality and Safety .

The Department of Health and Aged Care has signed a $12.8 million contract with Scyne , the public sector consulting firm spun out of PwC in 2023 .

In 2022-23 , the Commonwealth spent $74.8 billion on goods and services across 83,625 contracts, including $4.9 billion for computing services and $1.2 billion for software.

A root cause of cost blowouts is that contracts with suppliers fail to properly specify what is needed.

Government could remove barriers to entry by consolidating fragmented and complex procurement systems, increasing transparency and access to procurement processes.

Louis Matti , chief executive of Canberra -based company Terra Schwartz , says increasing participation of local small- and medium-sized enterprises in Commonwealth procurement processes will deliver greater value for money to the taxpayer.