Defence Industry Minister Melissa Price has announced the results of the Defence Procurement Review, following an extensive review and consultation process that began as far back as December 4 2020.
For experienced defence industry participants, the acronym ASDEFCON likely induces a cold sweat and a mild sense of repulsion. ASDEFCON stands for the ‘Australian Standard for Defence Contracting’ and is the template through which work is assigned from the Commonwealth to a contractor for defence-related work.
The ASDEFCON template includes a covering letter providing context to tenderers, a conditions-of-tender document with tender deliverables in response volumes, a draft contract of hundreds of pages, and a draft statement of work.
The response requirements in a list of tender deliverables include financial and legal aspects, and statements of compliance requirements against the draft tender and draft contract.
The operational and technical documents are always significant in scale, with each dedicated plan covering topics such as obsolescence, engineering, supply support, risk, quality and many more.
For sizeable programs, the ASDEFCON suite is like the world’s worst exam question. As can be imagined, a template that needs to be so broadly applied is always going to have elements that feel repetitive or unnecessary but need to be answered anyway for fear of becoming non-compliant.
A response in the ASDEFCON template for large programs takes months of effort from a whole team of people. Large companies are known to set aside program teams years in advance of a significant requirement going to tender. The investment in program preparation and tender response for major tenders is extensive, from hundreds of thousands to the millions of dollars.
What is important to understand is the intention of the ASDEFCON template. Like any large organisation, there is a need for the Commonwealth to implement procedures, delivering strict controls and transparency as it relates to costly expenditures. In seeking to do so, a cumbersome and time-consuming template is to be expected.
That perspective, however, should not prevent us from seeking to improve the template.
When announcing the review in 2020, Ms Price established the following targets.
“By reviewing Defence’s suite of contracting templates, its procurement practices and processes, we can deliver a simpler and less burdensome procurement system,” Ms Price said.
“We must also ensure we are balancing the needs of our defence industry with those of the Australian Defence Force and that’s what this review will seek to do.”
It is a considerable undertaking, and I applaud the minister and her team for tackling the challenge of achieving the aims required in Department of Defence and government procurement, balanced with the need to bring a more commercial speed to acquisition and contracting processes.
The improvements touted include communication protocols more beneficial to industry on debriefs and tender content, greater visibility of upcoming procurements, assessment of a contractor accreditation framework, improved training on probity practices to enable more open dialogue, and better updates between DoD and industry.
“The implementation of the review’s recommendations will significantly improve the way Defence does business,” Ms Price said while announcing the review outcomes.
“It will also improve how Defence works to fast-track the delivery of capability to the ADF and how it communicates with industry.”
The minister also provided commentary that illustrates this is about more than just internal improvements.
“Our strategic environment is deteriorating and creating new challenges for us to overcome, so 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.
This is ultimately the balance that must be struck. Responsiveness to the needs of ADF, with processes to provide integrity and transparency in how government funds are spent, all while providing opportunities for Australia’s defence industry to be consistently engaged. It is an almost-impossible challenge, but one that demands attention, as acknowledged by numerous former defence ministers in conversations with me.
While this effort to improve is excellent, it is an improvement within the boundaries of current practices. The minister’s acknowledgement of a deterioration in our strategic environment is a signal that she, Defence Minister Peter Dutton, Capability Acquisition and Sustainment Group (CASG) and parliament itself should be empowered to undertake a broader and bolder review of our contracting methods.
• Kristian Constantinides is the general manager of Airflite, and chairperson of AIDN-WA; the opinions expressed are purely his own
