Deloitte has agreed to refund part of an Australian government contract after admitting it used generative AI to produce a report riddled with fake citations, phantom footnotes, and even a made-up quote from a Federal Court judgment. The consulting giant confirmed it would repay the final installment of its AU$440,000 ($291,245) agreement with Australia's Department of Employment and Workplace Relations (DEWR) after the department re-uploaded a corrected version of the report late last week - conveniently timed for the weekend. The updated version strips out more than a dozen bogus references and footnotes, rewrites text, and fixes assorted typos, although officials insist the "substance" of the report remains intact. The work, commissioned last December, involved the Targeted Compliance Framework - the government's IT-driven system for penalizing welfare recipients who miss obligations such as job search appointments.
Paul Patterson, the director of Fujitsu Services Ltd, emailed the government on January 24 last year [PDF] to clarify that until an inquiry into the scandal was complete, there was "no limitation or caveat on our intention to pause bidding for work with new Government customers." He said it would "only" continue bidding for public sector work if a new customer asked it to do so, or with existing customers "for example a contract extension or for similar work already undertaken by Fujitsu for that customer," or "for new opportunities with existing customers, where we have assessed and understood there to be a need [for] Fujitsu skills and capability."
The deals were part of GSA's OneGov strategy, in which the government streamlines the acquisition of services by operating as one entity; that way individual federal agencies don't have to negotiate their own separate deals.