Ascent Pty Ltd believes it has found an easier path for Australian defence contractors to tap into the US's defence procurement system: go through Hawaii.
The Adelaide-based project management and logistics services firm has signed an agreement to represent Hawaii's Hui Huliau Defence Systems (HHDS) in Australia. HHDS is a US Small Business Administration (SBA) 8(a) Set Aside company, which qualifies it for the US's non-competitive sole-sourcing program.
The two companies got together after Austrade and Team Defence Australia introduced them to each other at the Special Operations Forces Industry Conference (SOFIC) in Tampa, Florida, last year.
It could have been the perfect match: Ascent wanted to expand into AUKUS contracts in the US, and HHDS was looking to do the same in the Indo-Pacific region.
Ascent says the partnership with HHDS as the primary contractor and Ascent as a sub-contractor has the potential to open doors for Australian SMEs trying to crack the US's complex and restrictive defence market.
Ascent Strategic Partnerships Manager, Darren Roles, briefed the Australian defence industry as part of the Avalon Hub series of presentations at the Australian International Airshow and Defence Exposition in March. He said the arrangement also provides companies with access to HHDS experience in contract negotiation.
"One of the problems getting Australian businesses into US DoD is the contract vehicle itself," Roles said. "It's very challenging to comply with federal acquisition regulations; these are rules and regulations that have been developed over a long period of time.”
"Australian companies trying to tap into that market need to get an understanding of how all those functions work.”
"There are a number of arrangements to get into that; some cost a lot of money, others don't cost as much. Even just the travel to get from Australia over to the US to get a foot in the door is challenging.”
"By HHDS and Ascent teaming-up, we've got access to the market because HHDS provides the conduit for us to supply services, and access contracts."
Parent company Hui Huliau is a not-for-profit organisation that has six commercial subsidiaries. These subsidiaries, such as HHDS, return profits to the parent, which is then poured into the native Hawaiian communities. That qualifies Hui Huliau as an 8(a) company, which must be either:
- native-owned (Hawaiian, Native American, Alaskan)
- veteran-owned
- service-disabled veteran owned
- female-owned
- minority-owned.
SBA 8(a) companies qualify for the US sole-sourcing procurement program, which enables US government departments to award contracts having solicited proposals from only one supplier. They are non-competitive contracts that cannot be protested.
Ascent sees their connection with HHDS as a pathway for Australian SMEs to tap into sole-sourcing contracts.
"We represent Hui Huliau in Australia. What we are trying to do as the sub-contractor and Hui Huliau as the prime, is provide a conduit for companies to get access to work in the US," Roles said.
According to Roles, the agency agreement with HHDS is more than just a vehicle to justify accessing sole-sourcing contracts, he said it also provides Australian SMEs with several diverse capabilities, including: global operations, financial stability, contracting experience, veteran employees, positive Contractor Performance Assessment Ratings (CPAR) ratings and over $100 million directed sole-source capability.
According to Ascent, the Ascent-HHDS alliance brings a lot of defence supply credibility to the table, with life support services, expeditionary diplomacy support, aviation services, cyber security, information management and intrusion detection among its capabilities.
The HHDS connection can also provide SMEs with capital funding, often needed if they want a fighting chance at getting a US contract. Some US contracts require bonding, and if a company doesn't have cash for the bond, no contract will be forthcoming.
"[HHDS has] got a pretty big war chest," Roles said. "Hui Huliau does provide that access, to have that money to back that business from a cash-flow point of view."
If it's as effective as Ascent and Darren Roles believe, Australian SMEs have the skills to compete in the US defence markets, but have been hampered by a lack of access.
Ascent's Hawaiian pipeline though HHDS could be a long sought-after solution.