Defence purchases fast-tracked to meet challenges

The deterioration in Australia’s strategic outlook has been well documented as Chinese militarism increases. For that reason, the Morrison government is right to tackle the Australian Defence Force’s process for acquiring new capabilities. Major reforms will be introduced in 2022 to reduce the time it typically takes to get new projects to contract stage. The process will be fast-tracked to cut as much as 12 months from the current four years, as the government focuses on how it will deliver its $270bn project to rearm the nation. As Defence Minister Peter Dutton said in a speech last month, the Defence Force and industry can “no longer be satisfied with a ‘business as usual’ mindset”, amid China’s rapid expansion of its military capabilities. The ADF must be driven by “a mission of utmost national significance and urgency’’, he said. Faster delivery, greater competitiveness and innovation have the potential to save billions in taxpayer funds, Ben Packham reports.

The anticipated reforms are the result of a 14-month review that received 250 responses, including 144 from industry players ranging from small family-run enterprises to giant defence firms. The review called for more urgent Defence processes that “respect time and its commensurate value to the taxpayer and defence industry”. The initiatives also follow a warning in the 2020 Defence Strategic Update that Australia can no longer rely on a decade of “strategic warning time” before a major attack. Defence’s processes need to respond to an evolving regulatory and threat environment, the update noted. The Indo-Pacific region faces major challenges on and under the sea, in space, from missiles and in warding off cyber attacks. The review of procurement processes noted that the ADF must deliver its $270bn capital program in a challenging geopolitical environment, with competing demands for a skilled workforce, at a time of rapid technological change.

The reforms should assist Australia’s domestic defence manufacturing industry and skills base to develop. But, as The Australian has argued previously, the priority of defence procurement is improving national security rather than bolstering the domestic industry. When it makes sense for strategic and also economic reasons to buy defence equipment off the shelf from overseas manufacturers, the ADF and the government should not back away from doing so. At the same time, there is a long-term sovereign benefit in developing homegrown defence industry expertise.

Australian Industry & Defence Network chief executive Brent Clark said Australian industry needed certainty, and without it “we risk destroying the Australian sovereign industrial base”. Defence Industry Minister Melissa Price will oversee changes to cut red tape and streamline tender processes, giving industry greater clarity on upcoming tenders and providing faster feedback to unsuccessful bidders to help them improve future proposals. “We must have a more agile procurement system that delivers capability for our ADF more quickly and treats industry as a fundamental partner in the delivery of this capability,” Ms Price said.

Defence has been instructed to focus more on the pre-tender phase of acquiring new equipment to ensure project proposals are “mature” before being released to market, to reduce uncertainty for industry and promote higher-quality tenders. Tender evaluation periods will be capped at 12 months for more complex projects, saving three months, and six months for lower-risk procurements.