Panels for lucrative government contracts should stop running protection rackets for big consulting firms, a report says.
An inquiry into Commonwealth procurement by the parliament's audit committee has recommended major changes when handing out contracts, saying agencies have failed to comply with the relevant rules and display value for money.
In 2021/22 alone, $80 billion worth of contracts was awarded to more than 12,000 businesses, while the largest consulting firms - including embattled firm PwC secured $2 billion in contracts.
The report said a small number of companies had been dominating the procurement process.
"Panel procurements can provide significant benefits in terms of efficiency and risk reduction for entities, but they should not come at the cost of the core principles of competition and value for money," it said.
"Panels should not continue to be a protection racket to channel work to the big four consulting firms."
The chair of the committee, Labor MP Julian Hill, said major changes were needed in how contracts were awarded.
"Put plainly, the Commonwealth has serious commitment issues," he said.
"AusTender is no 'AusTinder' and it needs reform.
"Public servants need to get far more comfortable and skilled with playing the field and sharpening their pencils on suppliers, even if this leads to difficult conversations and rejection."
The report made 19 recommendations, including the need for multiple quotes to be received and value-for-money assessments to be conducted.
"Panels have become an uncompetitive rort and it needs to stop," Mr Hill said.
"A growing share of procurement is occurring from suppliers listed on ‘standing offers' or panels.
"Yet too often this is one quote or limiting or stifling competition and value for money."
Mr Hill said the limited competition had been a major advantage for the big four consulting firms in winning government contracts.
The report also urged for the public service framework to be updated.
The government has been working on overhauling the procurement system and how consultants are engaged following a scandal over PwC's handling of confidential tax information.
