Significant Parliamentary concerns re Salesforce and NDIA: procurement, gifts and hospitality

NDIA officials failed to disclose years of secret gifts and hospitality received from global IT giant Salesforce despite the company securing lucrative government contracts and massive variations.

The Joint Committee of Public Accounts and Audit tabled its final report today for its Inquiry into procurement at Services Australia and the National Disability Insurance Agency (NDIA) finding key aspects fell short of the Commonwealth Procurement Rules and ethical requirements.

The findings follow the release of the inquiry’s interim report in September 2023, which focussed on the activities of the Synergy 360 consulting firm as an advisor to the technology company Infosys in obtaining Government IT contracts.

That report raised serious questions about potential financial impropriety and improper relationships with parties receiving contracts from the Commonwealth and referred those matters to the National Anti-Corruption Commission (NACC).

In this final report for the inquiry, the committee investigated the procurement of NDIA’s new customer relationship platform, known as the PACE system, from the US based global IT company Salesforce.

Committee Chair, Julian Hill MP said, "It was perplexing that the value for money assessments in this procurement gave no explicit weighting to price as a key factor in scoring and ranking proposals.”

"The sizes of the contract variations were significant, now $135 million up from $27 million at inception … a substantial proportion was due to significant changes in scope. Other vendors were basically denied the opportunity to tender for the product ultimately being delivered.”

The most concerning issue to emerge from the evidence was what appeared to be clear breaches of NDIA’s Gifts and Hospitality policies by its officials.

Mr Hill said, "Although NDIA gave evidence that no declarations of any hospitality relating to this contract were made by its staff, Salesforce subsequently provided written evidence of more than 100 instances of hospitality and/or gifts, including meals, drinks and golf outings, passing to NDIA officials over an almost five-year period. This was before and after the award of the contract, and throughout the period of contract variations.”

“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. This was clearly not followed.”

After the interim report was tabled, the committee learned also that Synergy 360 made an unsolicited approach to Salesforce in advance of the PACE tender process and that meetings took place between former Minister Stuart Robert, Synergy 360 and Salesforce before and after the awarding of the contract.

Mr Hill rsaid, "Three meetings with former Minister Robert occurred with no written records available of what was discussed or evidence that other potential vendors who were not Synergy 360 clients were afforded similar access. Ultimately Salesforce secured a major government contract and later benefited from a series of lucrative variations.”

The committee makes five recommendations in this final report including that the:

• Department of Finance and the Digital Transformation Agency take appropriate action to understand the extent to which inappropriate cultivation of Commonwealth officials may be occurring by major ICT vendors; and
• Australian National Audit Office consider future audits of potential gifts and hospitality issues in the public sector to identify practices of concern.

The Chair has also written to Salesforce asking:

• If Salesforce’s Office of Global Ethics and Integrity had approved each and all of these payments in accordance with their own corporate policy?
• Who makes these decisions within Salesforce’s Office of Global Ethics and Integrity?
• If Salesforce’s Office of Global Ethics and Integrity has ever declined a request to approve hospitality for an Australian Commonwealth official?
• For Salesforce to provide a table within three months of the tabling of this report of all hospitality provided to all Commonwealth officials by agency for the last three years (names redacted) consistent with the format Salesforce helpfully provided in relation to the NDIA, and advice as to whether each item was approved by Salesforce’s Office of Global Ethics and Integrity.  

The report can be downloaded from the inquiry website.

 

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