Defence Minister Senator David Johnston has promised to deliver a new Defence White Paper within 18 months of the Coalition government gaining office, a move welcomed by industry. But what does the new government intend to do with industry policy?
Graham Priestnall, President of the Australian Industry and Defence Network (AIDN) says Defence’s current industry engagement would improve if the interaction was more of a two-way street than it is at the present.
“A lot of our members have said they feel Defence is not really listening. Now whether that’s because the idea they’re proposing is unachievable, or because it doesn’t align with current government policy, or it breaches procurement acts, I’m not sure,” he said.
“Another area for improvement is consistency within DMO or Defence. Many times I’ve seen senior DMO management stating they’re looking for a collaborative approach, yet this doesn’t filter down to the working level, which tend to maintain a transactional approach with, and are very sceptical of industry. Why is that? I think people at the working level are following the processes in place and when things change at the top it sometimes doesn’t filter down.”
He is also critical of the time currently taken by the contractual process, “You can’t have a situation where it takes the preferred tenderer nine months to get into contract, that’s ridiculous,” he says.
Looking forward, Priestnall says that Industry, particularly the SMEs, is keen to see initiatives such as Skilling Australia’s Defence Industry (SADI) and the Capability and Technology Demonstrator (CTD) program continue and, while it is difficult to predict if the relationship between Defence and industry will change in the near future, he remains hopeful.
“The new government has stated that they are seeking greater interaction and transparency between industry and Defence, notwithstanding the contractual issues, so I’d like to think it will happen,” he said. “They want to bring certainty into the DCP, they don’t want delays and they understand how delays can impact industry and how you’ve got to keep them informed.
How Defence sees industry engagement
DSTO presently sources research and technical support from industry through contract R&D, collaborative and commercial arrangements. It maintains strategic alliances with industry for undertaking collaborative research and development and also partners with industry in Cooperative Research Centres (CRCs) and through the Defence Materials Technology Centre (DMTC).
It also manages the CTD Program, which supports industry to develop new proposals for Defence capability in priority areas and transfers its own technology to industry for commercialisation and civilian applications.
“Our five-year Strategic Plan outlines our renewed focus on DSTO as a collaborative partner and innovation integrator,” a Defence spokesperson told ADM. “We will leverage industry capabilities through strategic alliances and partnerships. Through these partnerships we will take a stronger role in integrating knowledge and best practices to deliver outcomes for Defence and national security.
“Our relationship with industry is already changing for the better as we engage with both the primes and smaller industry players. We have recently signed strategic alliances with BAE Systems, Thales Australia, Saab Australia and ASC and more are on the way. These are all high-level, long-term collaborative partnerships, which are capability focused.”
The spokesperson also said DSTO has been instrumental in establishing an integrated innovation program, managed by a senior Defence steering group involving DMO, CDG and DSTO, to capture new ideas and develop them into capabilities.
Michele Kelly, Head of the Defence Industry Division in DMO says more than $10.5 million of funding for Australian companies under the latest round of the SADI program will provide over 1,000 individual training opportunities, designed to support industry to improve quality and quantity of skills within its workforce.
“The Government also supports programs such as the Australian Industry Capability Program to provide opportunities for Australian industry to compete and win Defence work on merit,” she said to ADM. “The Global Supply Chain program also provides Australian defence industry with the opportunity to participate in the supply chains of major multi-national primes.”
For its part, DMO considers it enjoys a good and positive working relationship with industry, but is looking to improve the way it does business.
“DMO continues to engage with industry at many levels and in a wide range of forums to progress new initiatives in contracting, skilling and delivery of complex projects,” Kelly said. “Examples include adoption of rolling wave performance based support contracts, trialling a managing contractor model for acquisition projects, and continually reviewing what work is best placed to be done within industry rather than Government.”
From the Minister
Senator Johnston intends to release a new DCP and Defence Industry Policy Statement along with the White Paper possibly as early as the second half of next year, referring to the suite as ‘bankable documents’. See From the Source interview with Senator Johnston for more on what the new government has planned.
“My task is to inject discipline into the way the monopsonistic customer sets out a plan and adheres to it in a disciplined and timely way,” Senator Johnston explained to ADM. “If we can achieve that in accord with our White Paper aspirations within 18 months of election, the White Paper will include an industry policy and a DCP, costed, relevant and cohesive, we will have gone a long way towards creating a better environment for a relationship to flourish between industry and Defence.
“For a long time we’ve been very concerned about the way DMO relates to industry; one of my principal concerns in the administration of the portfolio is timeliness, industry must be timely as a matter of survival. The Department in all of its iterations discloses very little concern towards timeliness. This is something I really must change. Tender documents that have to be brought into the room in a wheelbarrow concern me greatly as being less than commercially viable.”
With regard to PICs and SICs, Senator Johnston said he had for a long time been disillusioned with the fact they appeared to be window dressing, with political flavour and imperative.
“I’ve just simply got to get them to live up to the expectation of what they are. If you’re industry and you’re a SIC or PIC producer, you can take some comfort that the government is actually going to live up to what you expect the award of that label is going to deliver,” he stated. “That is, the more cheaply produced offshore version isn’t going to get a start. You might have to compete onshore in the space and that’s fine, but you’re not going to be undercut and beaten by the version from overseas that produces at about a tenth of the cost.”
Senator Johnston also noted that he was a supporter of the SADI program, “Certainly we’re into it, we’re not made of money but the SADI program, particularly with respect to submarines and a whole host of sustainment of platform equipment, is a very good program,” he said.
“Overall we’ve got an opportunity; we’re committed to something that is doable, two per cent in 10 years, and I want to drive it hard,” he concluded. “I want to turn Defence into a much more timely institution that has a synergistic relationship, not an antagonistic relationship with defence industry.”
