The Australian Submarine Agency paid McKinsey $12.7 million for management advisory services without running a competitive tender. Australia has committed $368 billion over 30+ years to nuclear submarines. The agency overseeing that program can't be bothered to tender a $12.7M advisory contract.
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$12.7M of Australian taxpayer money was wasted at Australian Submarine Agency. The Australian Submarine Agency paid McKinsey $12.7 million for management advisory services without running a competitive tender. Australia has committed $368 billion over 30+ years to nuclear submarines. The agency overseeing that program can't be bothered to tender a $12.7M advisory contract.
Spread across Australia's 10.8 million households, that's roughly $1 per family — enough in total for covering the university fees of 423 students.
The Australian Submarine Agency paid McKinsey Pacific Rim Inc $12,700,776 for management advisory services (Aug 2024 – Jun 2025) via sole-source procurement. No competitive tender was run. No alternative quotes were sought. For context, Australia has committed $368 billion over 30+ years to nuclear submarines — the agency overseeing that program was incapable of tendering a $12.7M advisory contract.
AusTender contract notice: ATM ID FIN/007/20RFTPhase1. Procurement method: Direct Sourcing. Supplier: McKinsey Pacific Rim Inc.
Direct sourcing (sole-source) is permitted under Commonwealth Procurement Rules only in specific circumstances — urgency, unique expertise, or where competition would be genuinely impractical. ANAO has consistently found that Commonwealth agencies misuse direct sourcing by default when the circumstances don't meet the threshold. No publicly available explanation has been provided for why the Australian Submarine Agency — with extensive internal capability and access to the Defence procurement panel — could not invite competing bids for general management advisory work.
Sources:
- AusTender: https://www.tenders.gov.au/Search/CnAdvancedSearch?Keyword=Mckinsey
- ANAO procurement reporting: https://www.anao.gov.au/work/information/australian-government-procurement-contract-reporting-2022-update
- Parliamentary testimony: https://www.aph.gov.au/DocumentStore.ashx?id=0732b488-b8ad-4fb3-a539-a1c1da984873
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