KPMG has been blocked from bidding for new government contracts in Victoria, Australia, until at least October, according to the Australian Financial Review (AFR) report.
The ‘Big Four’ company must also withdraw from current tender negotiations, as the company confronts escalating fallout from the misuse of confidential client documents, the report added.
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The state government has written to KPMG demanding an explanation for the misconduct. The company’s response will help determine whether the ban will be extended.
KPMG currently holds contracts worth “millions of dollars” with the state, according to the AFR.
The step comes after KPMG admitted that former chief operating officer Eileen Hoggett stored printed copies of confidential Lendlease board papers in her locker, improperly shared them with colleagues and repeatedly lied about her actions.
A Victorian Government spokesperson described the behaviour as “a serious matter”. In response, the Department of Government Services issued a notice to the company.
The spokesperson was quoted by the AFR as saying: “KPMG has agreed not to participate in new Victorian government tender processes while the show-cause process is under way, and to withdraw from current tender processes.”
The move in Victoria adds to mounting pressure on KPMG’s public sector practice. The company has already agreed to stop bidding for work from the Federal Government and the Australian Capital Territory, Western Australia, New South Wales and Queensland until at least 30 September.
KPMG is expected to implement significant job cuts as it seeks to absorb the loss of government and some private sector work. Partner pay for the last financial year has already been reduced by 20%.
Tender disclosures show KPMG has Victorian Government contracts worth A$24m ($16.8m) and is part of broader consortia on other contracts valued at A$195m.
Recent deals include a four-year contract with the Education Department worth A$173,000 and a three-year A$107,000 agreement with Ports Victoria commencing on 1 July.
Under the Victorian arrangements, KPMG may continue in some existing tender processes but only where these relate to an “urgent requirement, specific unique capability or continuity of services previously delivered”.
The company recently named John Sams as its new Australia CEO after former chief Andrew Yates resigned in May.
