Defence associate secretary Matt Yannopoulos has warned companies that Defence will no longer tolerate poor behaviour by IT companies quitting one contract in favour of a better paying contract somewhere else in defence.
Yannopoulos, who is responsible for the defence transformation program, also warned that he intended to make up $145 million savings designated in the recent budget by paying contractors less and by using fewer of them – but with no expectation of reduced capability delivered to Defence.
Addressing the MilCIS (Military Communications and Information Systems) conference in Canberra, he said workforce challenges, the growth of Australia’s digital economy was placing enormous information and communications technology (ICT) pressures on the Defence Chief Information Officer Group.
That meant pressures on the industry which supported defence.
“Supporting us means ensuring that poor behaviour is eliminated, such as contractors breaking contracts to pursue higher paying options elsewhere in defence,” he said.
“I must stress this point as the implications on defence are significant and it is no longer going to be tolerated.”
Yannopoulos said poor behaviours and lack of contract discipline by both Defence and contractors had been allowed to develop over time, in some cases undermining the value for money argument for a contracted workforce.
“To address this, Defence will be implementing a range of reforms aimed at reducing contractors’ costs, increasing efficiencies and potential reinvestment into capability,” he said.
That includes a centralised review of skills, education and experience requirements for contractors to meet departmental expectations.
Sampling of all Level Five and random Level Four contractors will be undertaken to determine if they meet Defence standards, plus removal of sole source panel contracts unless they have a group head or service chief’s approval.
Yannopoulos said Defence would be taking a structured approach to use of non-APS employees, including considering where work would be best delivered by an APS employee.
“Knowledge transfer and capability uplift arrangements will be a key element of success to this mixed workforce model,” he said.
Yannopouloos said the recent budget specified that Defence would save $145 million on contractor costs.
“I have directed group heads and service chiefs that we will find that by reducing our number of contractors or reducing what we are paying them. I am not adding it to the bill and having less capability to meet that saving,” he said.
Yannopoulos said Defence was being expected to deliver capabilities which were larger, more complex and contemporary faster than ever before and capability throughput needed to match this pace.
“I will be working closely with the Vice-Chief (VCDF) to make the capability development process more agile, less paperwork, more decisions,” he said.
However, Yannopoulos said he was not suggesting acquisition of major warships could be done simply.
“But the acquisition of a software product and a partner to help implement it, hey maybe we could do that a bit quicker,” he said.