The soaring figure comes as the federal government continues its crackdown of consultancy and contracting fees, promising to bring core government work in-house where possible and practical.

But the recent figure suggests the task to untangle work sent to the private sector will be enormous, one expert describing the department's reliance on outsourcing as a "Gordian knot".

Analysis of government contract notices by The Canberra Times can reveal more than 21,500 contracts, totalling $26.3 billion, were entered into by Defence during the 2022-23 financial year.

Nearly one-quarter of that figure, $6.4 billion, was spread across just seven major defence industry suppliers - Adecco, Kongsberg, Babcock, Bae Systems, L3Harris, Raytheon and Thales.

The total represents more than 53 per cent of contracts spending across the federal government, with the next highest spend by the Department of Employment and Workplace Relations on $6.4 billion and the Department of Health and Aged Care on $2.2 billion.

A spokesperson said Defence was committed to supporting the government's plan to strengthen the public service and reduce reliance on external labour.

"Defence engages in a range of contracts for acquisition, sustainment and workforce, including consultants, contractors and outsource service providers. This is done where technical expertise or skills are required that are not available within the Australian Public Service, or to procure products and services to support the operations of the Australian Defence Force," the spokesperson said.

In 2022 and 2023 Defence contributed $145 million to the whole-of-government savings measure to reduce expenditure on external labour, advertising, travel and legal expenses. The 2023-2024 budget included further savings against this measure including $154 million in 2023-2024.

"Defence is planning to meet these savings through reducing reliance on contractors and reinvesting in the Australian Public Service workforce," the spokesperson said.

Contracts filed under "management advisory services", which can include consulting work undertaken by the big four accounting firms, totalled $1 billion across more than 1200 contracts.

Other major costs adding to the $26.3 billion yearly figure included missiles, fuels, aircraft and watercraft.

Defence expert, and former Army officer Professor John Blaxland, said Australia's boutique defence force and supporting bureaucracy had become a hybrid model relying on external expertise.

He described the arrangement as "messy, expensive and inefficient", adding the task to wean off private industry would be akin to unravelling a Gordian knot.

"The public service, in my view, in the last decade-and-a-half or so, has been stripped of its spare capacity," Prof Blaxland said.

"It's more about hiring people to do things for you rather than doing it yourself.

"And when you hire a contractor, you are not hiring somebody who is doing this for purely altruistic reasons. They're for profit."

Many of the contracts were for services or major defence procurement projects that can't be developed without industry providers.

And those projects haven't been within troubles and concerns.

Defence Minister Richard Marles revealed last October 18 projects with a budget of around $70 billion were running over budget by at least $6.5 billion.

A total of 28 major projects were also cumulatively running more than 97 years late.

In May, the Australian National Audit Office released its damning report into a $45 billion contract with BAE Systems to procure Hunter-class warships

The delayed frigates project has already cost the department an extra $423 million.

Prof Blaxland said Defence sought quality over quantity and that was costing a "bomb".

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While he wanted to see the expenditure spent well, it was ultimately an insurance policy for the nation, he said.

"This is a, 'Break glass in case of emergency'. That's what we're spending the money on," he said.

"It's actually about risk-management for the nation and you actually don't want to find out whether it's been worthwhile or not."

About the data

The data was first pulled from the federal government's procurement portal, AusTender in early July 2023 and was based on contracts beginning between 1 July 2022 and 30 June 2023.

The figures for the financial year will increase as more contract notices are published on the portal by agencies. Some contract notices are published weeks or months after being entered into.

To determine how much major firms had made, I filtered the supplier column and cleaned the data so all name variations were simplified into one name. For example, Thales Australia, Thales Australia Pty Ltd and Thales all became one supplier.

I then placed the data into a Google sheet and used a pivot table to determine the values.

I omitted many smaller firms making less than $20 million over the year for the sake of brevity.

Due to the procurement portal relying on individual agencies inputting data, there are sometimes inaccuracies within the data.