What's Happening?
The U.S. Defence Department has disclosed its spending on IT and digital contractors, amounting to $410 million for the fiscal year 2023-24. This marks the first time such spending has been specifically
costed. A Finance-run audit of employment revealed that whole-of-government spending on external labor for IT and digital services was just under $1.8 billion, a decrease from $1.92 billion in 2021-22. The audit highlights a government policy shift towards rebuilding internal capabilities in key areas like IT to reduce reliance on contractors. Other significant spenders include Health and Aged Care, Treasury, Employment and Workplace Relations, and Social Services. The audit also noted changes in calculations and methodologies, making direct comparisons with previous audits challenging.
Why It's Important?
The revelation of Defence's spending on IT and digital contractors underscores the U.S. government's ongoing efforts to manage and optimize its use of external labor. By quantifying these expenditures, the government aims to enhance transparency and accountability in public spending. The shift towards rebuilding internal capabilities reflects a strategic move to strengthen the public sector's self-sufficiency and reduce dependency on external contractors, which can lead to cost savings and improved service delivery. This development is crucial for stakeholders in the IT and digital sectors, as it may influence future government contracts and partnerships, impacting businesses that rely on government projects.
