The public sector union says poorly trained and inexperienced IT contractors are being hired for important government projects without proper scrutiny.

The Department of Human Services has been clearing out IT subcontractors amid allegations some had been employed using fake CVs.

Reports say many of the subcontractors were supplied by an labour hire company with little departmental oversight.

CPSU national secretary Nadine Flood said the government should stop the practice.

“Labour hire simply has to go,” she said.

“This fraud case could not have occurred if this work was being done by Commonwealth employees employed under the Public Service Act and subject to APS scrutiny.”

The attempt to save money would end up costing more in the long-term, Ms Flood said.

“One third of 14,000 ICT staff across the APS are now contractors but the evidence is these contractors do not always have the right training, experience or specialist skills for the job, and cost far more than qualified APS employees,” she said.

“External contractors cost this government far more and in most cases deliver far less than if the money was spent on retaining qualified APS staff.”

Ms Flood said government IT outsourcing was “dismally failing”.

“Whether trying to start a business, get an education, find employment or caring for a loved one, the digital public services on which the Australian public relies should be every bit as good as the private sector.”

The Department of Human Services has defended its practices.

“IT contractors are sourced from vendors on the department's Deed of Standing Offer for ICT Services,” a spokesperson told reporters this week.

“To be included on the panel, these vendors execute a contract with legally enforceable terms and conditions, including that the staff they put forward for our consideration have the necessary skills to undertake the work required.

“In addition, the department assesses each contractor's technical skills, including through an interview and by contacting referees, and where appropriate, conducting a technical test.”

At least one public service employee is also under suspicion, and the Australian Federal Police have been called in to help with the investigation.