It’s been a little over six months since the trifecta of the White Paper, Industry Policy Statement and Integrated Investment Plan were released. So what has changed? Faces, positions and the organisation chart in Defence for a start. But there are also, I believe, the beginnings of the less tangible but more important cultural change. Industry is not the enemy; they are literally now a Fundamental Input to Capability. The senior leadership in Defence has known this for quite some time but there are signs that the mantra is trickling down the ranks to the desk officer level where decisions and attitudes shape the requirements and contracts that industry see.
There are small steps in this space, the biggest of which was the Land 400 Phase 2 industry roadshow. It would be easy to write off the activity as a political issue thanks to election timing – and I know I’m not alone in thinking this – but it did let industry explore the opportunities a little more.
The focus during the Risk Mitigation Activity (RMA) going forward will not just be about the performance of two excellent vehicles but also the economics around what works best for industry and building a sustainable supply chain tail. Will there be a premium? Of course but it is for government to decide how much they are willing to pay to support this capability and make the requisite arguments accordingly.
This attitude change being felt throughout the organisation can’t come soon enough in some spaces. Take for example JP 2110, the chemical biological radiological and nuclear protection kit and detection contract. Valued at $350 to $500 million, the program has gone through a downselect reducing the field of three to two. The program underwent offer definition and refinement only to find that the basis of provisioning was unrealistic given the budget and contacting model put forward.
The two industry teams, led by Lockheed Martin and GHD, are now being asked to undergo a second ODR with revised quantities and perhaps even a different acquisition strategy with a new program manager on the government side. It also turns out that Air Force has their own $20 million CBRN program on the books, completely separate from JP 2110. This process does not match up with the One Defence outlook that the First Principles Review confirmed nor its emphasis on cutting down on time wasting processes.
Industry has reacted positively to the changes thus far and is expecting more from Defence as the reform program progresses. What is less clear is how industry will change its behaviour as what it means to be a FIC becomes clearer. What role do the primes play in this space? What role do SMEs play? I suspect the Centre for Defence Industry Capability (CDIC) will play a large role in this space.
Speaking at the Australian Business Defence Industry Unit seminar last month, Kate Louis, First Assistant Secretary Defence Industry Policy, Strategy and Intelligence Group said that the CDIC will help develop and refine the sovereign capability framework that will lead the way in terms of shaping how Defence sees industry and vice versa. It is important to note at this point that not all businesses and capabilities will be in this framework. Doing business in Defence, either past or present, does not mean that you are a sovereign capability.
Army may have been the poor cousin of its sister services in the past (see Andrew Davies article on P32 for more) in terms of funding and priorities but that is changing. The revitalisation of the Army can be seen with its increasing digitisation, replacement of key equipment and the application of lessons learned from over a decade of high tempo operations. As I’ve mentioned before, Navy would be nothing without ships or air force without aircraft but the army will always have its core platform – the soldier. The way in which they fight will of course change as technology evolves. As Major General Gus McLachlan says in this month’s From the Source, Army needs to change the way they do things, not just by putting analogue processes in a digital environment; the change needs to start at the schoolhouse level.
This attitude evolution needs not only to be applied to changing technology but to the role industry plays in the broader Defence community. Industry are not the enemy; they are a fundamental input to capability in every sense.