The Department of Defence is to launch a hunt for contractors on its books masquerading as "service providers."
Bosses at the 17,000-strong department fear their managers are disguising the composition of their workforces to try to get around Departmental Secretary Dennis Richardson's cull of consultants and contractors.
Mr Richardson ordered his divisional chiefs to halt the growth in expensive consultants and contractors, who were often former departmental public servants, at Defence with former diplomat warning that he would be "a mongrel" if his orders were not followed.
But Mr Richardson also says he is comfortable with the number of "service providers" working for Defence, and there are fears his words may have offered middle managers the chance to cook the books to disguise their non-public service staff numbers.
Internal Defence documents seen by Fairfax show managers spelling out the working definition, supplied by the Finance Department, of the difference between a "contractor" and a "service provider".
The term 'service provider' in Defence is a broad one and there are more than 17,000 of them working in the sprawling military complex ranging from specialists working on complex IT projects at Defence HQ in Canberra to the people who take out the bins and lock the car parks Army bases around the country.
At least one frustrated middle manager has been battling to make sense of it all, according to an internal minute,
"My understanding is that the freeze is on 'contractors' and not 'service providers' because 'contractors' are seen as staff substitutes," the public servant from the Defence Science Group wrote.
"Part of the issue is we have a cap on 'contractors' of 204 and as of December 2016, [the] group had 268 'contractors'.
"However we are showing 0 'service providers'.
"The suspicion is that some of our reported 'contractors' are in fact 'service providers'
"CDS [the Chief Defence Scientist] wants to get the 'contractor' number down to 200 but that not just by converting 'contractors' to 'service providers'"
The hunt was on, according to the minute, for the former employee who still effectively works at the department by taking one contract after another, a common arrangement in public service departments.
"He is particularly sensitive to repeat 'contractors' that look like staff substitutes, especially when they are former employees," the middle manager wrote.
"I believe SECDEF [Secretary of Defence] is planning an audit."
The Chief Defence Scientist, Alex Zelinsky, himself chimed in late in February in an effort to make things a little clearer to his 2000 public servants.
"No Options to Extend on existing contracts are to be exercised without Chief of Division endorsement," Dr Zelinsky wrote.
"Chiefs are not to approve any extensions past 30 June 2017 .
"All new contracts for service providers are to be referred to the Chief of Division for endorsement.
"We would not expect to see a sharp increase in service provider numbers."
One workplace union, Professionals Australia which has long campaigned against replacing public service with contractors, consultants or 'service providers' described the whole exercise as "stupid."
"It's pretty easy to hide most of your contractors as "service providers" and obviously doing it to get around [the secretary's] contractor freeze," union official Dave Smith said
"It's all manifestly stupid and expensive – the service providers, by and large, cost more than direct contractors as they take a nice slice of the contract fee."
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