· Defence and the Defence Materiel Organisation (DMO) develop processes for consolidating explosive ordnance inventory requirements of all stakeholders, at an appropriate level, to facilitate efforts to optimise explosive ordnance inventory holdings from both a capability and value for money perspective; and
· Defence undertake a strategic review of domestic manufacturing arrangements to evaluate the extent that value for money can be achieved from existing arrangements; and determine the ongoing viability of investment in domestic manufacturing capabilities.
Defence was already aware of a range of issues associated with procurement of explosive ordnance and has already established a number of reform programs to address these issues.
In early 2008, the VCDF was appointed as the single point of accountability for explosive ordnance in Defence.
A dedicated branch was also set up to implement widespread reform of explosive ordnance.
Additionally, the DMO established a dedicated division to manage explosive ordnance procurement.
This division is progressing a complementary program of commercial and inventory management reforms and staff professionalisation.
The Defence Explosive Ordnance Committee is directing a review to better coordinate all explosive ordnance requirements.
This will inform development of the 2010-11 financial year explosive ordnance procurement plan.
The DMO will not extend the current domestic contracts with Thales Australia for the manufacture of explosive ordnance.
The DMO is actively pursuing opportunities to achieve best value for money from the current contracts until they expire in 2015.
Defence will assess the ongoing strategic importance of domestic munitions manufacturing and the viability of investment in these capabilities.
The DMO is also investigating opportunities for future domestic manufacture of explosive ordnance which will meet Defence requirements in a cost-effective manner.