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waste Department of Defence
$1.8B

Defence blew $1.8 billion over budget on IT projects — and they still don't work properly

Defence's 12 biggest IT contracts all went over budget, by an average of 47%. The total blowout: $1.8 billion above what was approved. 11 of 12 contracts had no proper performance targets. Average project delay was 22 months. Vendor lock-in on 9 contracts, with no plan to get out.

On Their Watch
RM
Richard Marles
This happened on Marles's watch as Defence Minister, June 2022–present. Minister for Defence when ANAO audited the 12 overrunning contracts
PD
Peter Dutton
This happened on Dutton's watch as Defence Minister, Mar 2021–May 2022. Several contracts awarded and escalated under Dutton's watch 2021–2022

What This Means

What happened

$1.8B of Australian taxpayer money was wasted at Department of Defence. Defence's 12 biggest IT contracts all went over budget, by an average of 47%. The total blowout: $1.8 billion above what was approved. 11 of 12 contracts had no proper performance targets. Average project delay was 22 months. Vendor lock-in on 9 contracts, with no plan to get out.

Why it matters

Spread across Australia's 10.8 million households, that's roughly $167 per family — enough in total for funding roughly 15 public hospitals for a full year.

What the evidence shows
  • The ANAO performance audit of Defence ICT contracts found systemic failures in cost estimation, vendor management, and project governance.
  • Vendor lock-in was identified as a risk in 9 of 12 contracts with no mitigation strategy in place.
  • The $1.8 billion in overruns represents taxpayer funds spent beyond what was originally approved, without commensurate increases in delivered capability.
Amount Spent
$5,600,000,000
Original Estimate
$3,800,000,000
Waste / Overrun
$1,800,000,000
Cost Overrun
47%

Analysis

The ANAO performance audit of Defence ICT contracts found systemic failures in cost estimation, vendor management, and project governance. Average schedule delays were 22 months. Vendor lock-in was identified as a risk in 9 of 12 contracts with no mitigation strategy in place. The $1.8 billion in overruns represents taxpayer funds spent beyond what was originally approved, without commensurate increases in delivered capability.

Sources

https://www.anao.gov.au/work/performance-audit/management-ict-contracts-defence
Category: waste
Severity: critical
Agency: Department of Defence

What Needs to Change

Action Required

Force Senate estimates hearings and mandate independent cost estimation on all Defence ICT contracts over $50M.

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Impact Scorecard

Updated 30 Apr 2026

Tracking the pressure trail — from publication to policy change. Empty boxes show what's left to do.

✓ 📄 Finding published Published 2026-04-30
🔗 Shared 312 times
📰 Media coverage 2 articles
🏛️ MP contacted / responded 3 MPs contacted
❓ Parliamentary question raised —
⚖️ Policy change initiated —
💰 Estimated annual savings if fixed $450.0M/year if fixed
Complete In progress Not yet
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The Full Reckoning

3 active investigations. 15 completed. 0 in the queue.

Rank Finding Amount Status
1 $7.8 billion of your taxes paid to consultants who left nothing behind $7.8B Active
2 $3.3 billion in dodgy NDIS claims slipped through because nobody was watching $3.3B Active
3 CIMIC Donated $540K to Labor, Liberal and Nationals — Collected $3.1B in Government Construction, 41% Without Open Tender $3.1B Active
4 Thales Australia Donated $195K to Labor and Liberal — Landed $2.2B in Defence Contracts Through Restricted Tender $2.2B Investigated
5 $2.1 billion in government contracts handed out without competition — no bids, no questions $2.1B Investigated
6 Defence blew $1.8 billion over budget on IT projects — and they still don't work properly $1.8B Investigated
7 Ministers overruled their own experts to hand $1.2 billion to whoever they wanted $1.2B Investigated
8 The aged care regulator spent $890 million and can't show it made a single nursing home safer $890.0M Investigated
9 PwC Donated $270K to Labor and Liberal — Then Bagged $700M in Advisory Contracts, Including Confidential Tax Reform Work $697.4M Investigated
10 $719M in community grants flowed to coalition marginal seats at more than double the rate of safe seats $290.0M Investigated
11 Three major charities quietly took 57% of a $402M fund meant for small Indigenous community organisations $80.6M Investigated
12 Services Australia's IT modernisation with Accenture blew $75 million over budget $75.5M Investigated
13 The Australian National University got $175M from a research grants program that chose recipients without competitive bids $29.8M Investigated
14 Home Affairs' IT contractor bill blew up 135% — $18 million became $42 million, no rebid $24.3M Investigated
15 PricewaterhouseCoopers charged Defence $54 million for HR consulting — $22 million more than agreed, no rebid $22.2M Investigated
16 The Bureau of Meteorology's AWS migration cost $22 million more than planned — and nobody shopped around $22.0M Investigated
17 Deloitte built a public service analytics tool for $12.7 million — three times the budget, zero competition $7.9M Investigated
18 Ernst & Young charged double to evaluate an Indigenous health program — hired directly, no competition $4.7M Investigated
$23.6B total waste identified — and counting $23.6B