KPMG still winning government contracts despite withdrawing from tendering

Big Four consultancy services provider KPMG is still winning lucrative government contracts, despite having withdrawn from bidding for new public sector work.

The largest of these is an estimated £3mn share of a £21mn contract awarded by NHS England.

In addition, KPMG has won contracts worth up to £3.2mn to advise four government departments, including the Ministry of Defence and the Department for Environment, Food and Rural Affairs, according to Tussell, which tracks government contracts.

Energy regulator Ofgem has also hired the firm to manage its Offshore Transmission Owners (OFTOs) programme.

The FT has reported that KPMG has been awarded 22 contracts worth £10m since voluntarily withdrawing from tendering pending the outcome of a Cabinet Office review after it was criticised by the industry watchdog for its role in a series of scandals.

In August 2021 KPMG was fined £13 million by industry watchdog, the Financial Reporting Council (FRC), after the sale of Silentnight, the mattress company, to a private equity firm, the largest fine the FRC has imposed for a non-audit case.

The FRC has also criticised the firm for “unacceptable” failures in audits of banks and similar financial companies, including being accused of providing “false and misleading information” to the FRC as part of the regulator’s quality checks of KPMG’s audits of Carillion.

Despite this and other failings, a complete ban from bidding for public sector contracts is rare despite provisions made for such an action within the public procurement regulations.

Security company G4S was temporarily barred in 2013 after over-charging the Ministry of Justice for the electronic tagging of criminals, some of whom were dead or still in prison, whilst Deloitte voluntarily withdrew from bidding for public work for six months in 2016 after an analysis report criticising the government was leaked.