The Defence Department said this week that the organisation had twice informed the Attorney-General's Department of likely breaches of the Government's Legal Services Directions.

A spokesman for the Attorney-General's Department also advised it carried out an investigation and "concluded that a number of breaches occurred".

The admission the rules were broken comes as the Defence Materiel Organisation's general counsel, Gillian Marks, remains on indefinite sick leave.

Ms Marks went on leave in late 2006 after a whistleblower complained about the awarding of legal services contracts to Australian firm Freehills and United States firm Shaw Pittman Potts & Trowbridge, some without a competitive tendering process.

Government contract lists show Freehills was awarded more than $3.5 million in Defence and Defence Materiel Organisation contracts in 2005 and 2006.

A $1 million contract awarded by the organisation's general counsel division was on a select-tendering basis.

Freehills was later awarded a further contract, without competitive tendering, relating to the organisation's procurement improvement program, worth $2.2 million over eight months.

In 2006, the organisation also awarded Shaw Pittman Potts & Trowbridge legal services contracts worth more than $850,000.

Ms Marks reportedly previously worked for Freehills, and Senate estimates transcripts show she also worked closely with Shaw Pittman on a large government information technology outsourcing project.

After Defence began investigating the whistleblower's claims, Ms Marks's authority to sign off on key contracts was revoked and she was moved to other duties in September 2006 before taking sick leave.

The Legal Services Directions, issued by the Attorney-General, provide a legally binding framework for the conduct of government legal work, including the competitive provision of legal services by private firms.

The Attorney-General's Department publishes annual statistics on breaches of the directions, but has so far not identified the agencies responsible.

An Attorney-General's Department spokesman said the Defence Department would have to provide further details about the Defence Materiel Organisation's breaches.

The Canberra Times asked for more details about the organisation's failure to comply with the directions, but a Defence spokesman said no further information could be provided because the relevant "subject matter expert" was on leave.

No other officer in the department was able to answer the questions.

The Age newspaper reported last month that Ms Marks was working as a migration agent.

The Migration Agents Registration Authority lists her as director of Global Law & Migration Australia, with a business address in Darling Point, Sydney.

Defence has reportedly investigated if she has used her Defence laptop and mobile phone for the work.