IT Companies Gifts and Hospitality to Government Officials- Violation of Code

Private sector could face scrutiny after US software company reveals it wined and dined NDIA officials 

Parliamentary report finds agency officials also failed to declare gifts and outings paid for by IT firm Salesforce. 

 The potential “inappropriate cultivation” of government officials by the private sector could soon be under the microscope after US software company Salesforce revealed it wined and dined NDIA officials on at least 118 instances before, during and after the signing of a multimillion-dollar software contract. A parliamentary audit committee has recommended the federal government look into a number of contracts between the public service and major IT companies to see whether the behaviour is more widespread. The committee also noted the agency in charge of the national disability insurance scheme failed to publicly declare the ritzy outings with Salesforce officials. The final report on contracting arrangements at the NDIA and Services Australia, released Wednesday, comes more than one-and-a-half years after the NDIS minister, Bill Shorten, announced a review into an alleged potential “lobbying scandal”. Nine newspapers had alleged the former government services minister, Stuart Robert, had met consultants who facilitated access for a company bidding for lucrative contracts in his portfolio – a claim the former Gold Coast MP strongly denies. An interim report, released in September last year, did not make any adverse findings against the former Coalition minister or his business associates but referred the evidence submitted to the national anti-corruption commission for further scrutiny. In Wednesday’s report, the focus instead centred on a software contract between Salesforce and the NDIA to offer a new online system for NDIS participants to interact with, known as the PACE system. The committee chair, Julian Hill, said the contracting process “fell short” of commonwealth rules and ethical requirements. “The committee was surprised to find that no explicit price weighting was included in the NDIA’s value for money assessments when ranking the tender proposals for this procurement and makes a recommendation regarding this,” Hill said in his foreword. Sign up for Guardian Australia’s free morning and afternoon email newsletters for your daily news roundup The Salesforce contract increased from $27m in April 2020 to $135m by October 2023. The committee noted there had been scope changes and additional software licences provided which contributed to this rise. The committee found the failure of agency staff involved in the contract to declare gifts and benefits given by Salesforce was “most egregious”. In an additional submission uploaded last Thursday, Salesforce disclosed it gave gifts worth more than $100 to NDIS officials at least 45 times between 2019 and 2023, including wining and dining them at expensive restaurants and bars in Melbourne and Canberra. NDIA officials and Salesforce staff had a golf and lunch meeting at Kingston Heath golf club in Melbourne on 7 June 2019 before the contract was signed. The estimated value per person was $171. Other events included a dinner at Canberra’s Raku in February 2021, estimated to be worth $181 per person, and at Melbourne’s Chancery Lane in August 2022, worth $286 a head. The NDIA’s policy says officials cannot accept gifts and benefits over $100, which could be “seen to compromise their integrity”. Accepting any gift worth over $100 must first be approved by the chief executive or chief financial officer and should be published on their website. However, none of the instances were publicly declared on its register, and the agency said earlier this year there was “no evidence indicating that NDIA representatives having disclosed receipt of any gifts or benefits (including hospitality) from Salesforce during the 2019-20, 2020-21, 2021-22 and 2022-23 financial years”. “Breaches of disclosure requirements and gifts and hospitality policies are simply unacceptable,” Hill said in the report. “Some social elements to this [contract] may be reasonable, but any such interactions must be carefully conducted and managed to ensure that probity and integrity standards are maintained. “Ultimately, it was Salesforce that had this access [to officials], secured a major government contract and later benefited from a series of lucrative variations and provided hospitality to government officials.” A Salesforce spokesperson said it is fully cooperating with the audit committee and that its gifts and hospitality for NDIA officials – as outlined in the fresh submission -indicated its policies hadn’t been followed. 

after newsletter promotion “Trust is Salesforce’s core value,” a spokesperson said. “Salesforce takes any violation of its company policies seriously and is taking appropriate steps to address this matter.” A spokesperson for the NDIA welcomed the report, adding it had “zero tolerance for actions or behaviour” not in line with public service accountability rules. The NDIA has launched an investigation into its contracting arrangements and the report’s findings. The committee noted it was concerned over whether these practices may be more widespread across the federal government, recommending the finance department, the Digital Transformation Agency and the Australian National Audit Office undertake a broader examination of government contracts with major software companies. It also recommended the NDIA provide updates on its investigations into the contracting arrangements, the status of PACE’s rollout and its success or failure in cost savings and anti-fraud measures. “Given concerns regarding potential systemic inappropriate cultivation of public servants by Salesforce over a long period of time, the committee is requesting a further report on all hospitality Salesforce has provided to Commonwealth officials in all entities over the past three years,” the report said. Salesforce had initially been involved in a joint bid to win a similar NDIA contract between July and August 2019 before it was cancelled. Salesforce responded to a similar request months later in January 2020. The NDIA told Salesforce it was the preferred contractor in about March 2020, according to Salesforce, before awarding them the contract on 2 April 2020. In July 2019, Salesforce said it had become a client of consulting company Synergy 360, paying it a monthly retainer totalling $214,200 over a 24-month period between July 2019 and June 2021. The firm’s shareholders included Robert’s close friends, the consultant David Milo and political fundraiser John Margerison. Synergy 360 allegedly signed up corporate clients in a cash-for-access scheme, a former personal and business partner of the firm’s former executive director claimed in a witness statement submitted to the inquiry and released under parliamentary privilege at the end of June last year, a fortnight before the byelection in Robert’s former seat of Fadden. Lawyers representing Robert and denying the allegations described the release as “egregious” and an “abuse of privilege”. Robert said at the time: “I note that every contract has been investigated fully by the Watt review [into procurement at Services Australia and the NDIA] and no misconduct was found.” Salesforce said the only federal government contract it won while Synergy 360 was on retainer was the NDIA’s software contract. Shorten said the review by former public servant Dr Ian Watt in early 2023, which found 19 of 95 contracts “had real deficiencies”, had also uncovered “disturbing allegations and a pathology of very concerning decisions”, including those in the committee’s report.

https://www.theguardian.com/australia-news/article/2024/jun/26/salesforce-it-firm-parliamentary-report-australia