By Darian Macey, August 25 2026
What industry heard at Defence’s 25 August 2026 estate capital and sustainment works briefing
Security and Estate Group used today’s Defence Estate Industry Briefing in Canberra to set out a larger and more stable estate infrastructure pipeline.
However, the next phase will bring tighter cost assurance, disciplined program controls and changing procurement models.
Throughout the day, the central message was clear: Defence is reorienting the estate around nuclear-powered submarines, guided weapons and northern base resilience.
This will occur while implementing the Defence Estate Audit, developing alternative financing models and tightening evidence for project approval.
Around 750 people attended in person or online. That level of interest reflects the scale of the market. Defence spent about $3.3 billion on capital infrastructure in 2025-26. It is targeting about $3.7 billion in 2026-27.
The Capital Facilities and Infrastructure Branch, led by BRIG Matt Quinn, is managing 149 funded projects. The Estate Works Program has grown to roughly $1 billion and around 900 active projects a year. This industry briefing underscores the scale and ongoing investment across Defence infrastructure.
At a glance
- The 2026 reset was favourable. Defence reported no estate project cancellations, deferrals or descoping, and planned investment increased.
- Priorities are clear: nuclear-powered submarines, guided weapons and explosive ordnance, and northern base resilience.
- Alternative financing is moving towards market, beginning with strategic advice and candidate asset classes.
- Cost confidence faces a tougher test through stronger contestability and central-agency scrutiny.
- More guaranteed maximum price contracting and standardisation are coming, but Defence will retain multiple delivery models.
A larger program, with less tolerance for drift
Opening the briefing, Celia Perkins, Deputy Secretary Security and Estate, described the current program as approaching the peak of an ambitious national delivery effort. Major works are progressing across every state, including the completed RAAF Base Tindal upgrade and the intensive program at HMAS Stirling, where Defence expects to spend more than $700 million this financial year.
The estate itself remains vast: about 3.8 million hectares, more than 1,000 properties, 28 sealed airfields and a reported net book value of $44.7 billion. Defence wants to reduce that footprint at the margins, but the divestment program should not be mistaken for a retreat from estate investment. The savings objective is to move sustainment funding away from lightly occupied and obsolete sites and towards the locations the Australian Defence Force will use most heavily.
The 2026 National Defence Strategy and Integrated Investment Program have given the estate a more stable baseline than the previous two investment resets. Pat Sowry, First Assistant Secretary Infrastructure, said the refreshed program contained no cancellations, deferrals or descoping and restored or firmed funding for several projects affected by the 2024 reset.
That does not eliminate movement. Capability requirements will still change, projects will still compete within annual cash limits and shocks elsewhere in the defence investment program can still flow through to the estate. The difference is that Defence is starting from a stronger approved position, with substantial annual spending growth expected later in the decade.
The wider Defence reform program will create a separate delivery agency combining major capability acquisition, guided weapons and naval shipbuilding functions. The estate, ICT and intelligence have deliberately been left outside that structure. For estate industry participants, the immediate delivery model therefore remains broadly intact, although capability terminology, governance stages and approval pathways will change.
The estate is being repositioned around preparedness
The Defence Estate Audit is only partly about divestment. Defence is also relocating personnel, modernising estate processes and using the audit to concentrate resources on operationally relevant sites. Celia Perkins said the proposed changes affect fewer than 9,000 of the roughly 120,000 people who come to work in Defence each day, with many affected personnel to be moved within the same locality.
Relocation works will flow through established CFI, Estate Works Program and leasing channels. That creates work, but it will be spread across many sites and procurement routes rather than presented as a single divestment-related construction program.
Siobhan Slocombe, Director Estate Strategy, outlined the emerging Defence Estate Strategy 2026, or DES26. The strategy is in its final stages and is intended to follow the National Defence Strategy cycle rather than operate as another fixed 20-year document.
DES26 is organised around four aims. The estate must be:
- Postured where Defence needs to operate, train, sustain and project force;
- Prepared to support readiness and current and future capabilities;
- Resilient against conflict, disruption and infrastructure failure; and
- Adaptable as capability and strategic requirements change.
This will shift planning from traditional state-based plans towards regional plans that connect bases with energy, logistics, civilian infrastructure, other levels of government and local industry. Northern base resilience is the least mature of the three highest-priority programs, but work is now beginning to build out the investment case. Defence’s working phrase is direct: protect the force that projects the force.
Preparedness and mobilisation are also becoming explicit planning themes. Industry should expect future requirements to place greater weight on force protection, secure and resilient energy, logistics connectivity, commercial infrastructure options and the ability to continue operating through disruption.
Alternative financing moves towards the market
Alternative financing is no longer a speculative policy discussion. Defence Finance Group is leading the policy work and its procurement of a strategic advisory partner was described as being in evaluation, with an outcome expected in the near term.
The broader task is substantial. Defence referred to an objective of using private finance for about $5 billion of investment across the forward estimates and $15 billion over the decade. Not all of that will sit within estate infrastructure, and not every technically financeable asset will represent value for money once security, access and whole-of-life constraints are considered.
Defence is examining a wider menu than conventional public-private partnerships. Pat Sowry identified living-in accommodation as the most obvious asset class, including potential city accommodation in Sydney and an off-base solution in Cairns. Repeatable guided weapons storage and distribution assets, logistics facilities and elements of the LAND 8710 infrastructure program are also being considered.
Several points matter for the market:
- These are candidates for assessment, not confirmed privately financed projects.
- Defence must build a parallel business model for financing while preserving the industrialised PMCA and delivery processes that have allowed capital throughput to grow.
- Some projects may use build-to-lease or other simpler arrangements rather than a full PPP concession.
- Defence does not want unsolicited lobbying from every financier and developer. It intends to engage the market through structured briefings and procurement when the project and policy settings are ready.
The immediate commercial opportunity is therefore likely to begin with advisory, business case, cost-comparator and procurement work before it becomes a large construction-finance pipeline.
Cost estimation becomes a front-line capability
Defence repeatedly returned to cost confidence. The new Capability Investment Board is smaller than the former Investment Committee, while internal contestability and central-agency scrutiny are being strengthened. Infrastructure Division no longer has the same standing representation at every investment decision.
For projects approaching approval, the practical implication is that business cases, cost plans and design documentation will need to withstand more rigorous challenge. Defence expects limited tolerance for changes in scope, budget or schedule between parliamentary consideration and final approval.
Real escalation has not disappeared. Defence acknowledged that projects will continue to face value management, descoping and real-cost increase decisions. The point is that contingency, risk allocation and the evidence supporting an estimate will be tested earlier and more closely.
For consultants and contractors, weak reporting will become more expensive. CFI expects concise, decision-ready advice; reliable forecasts; timely design products; and clear explanations of risk. Firms that treat Defence reporting as a routine contract administration task will struggle as approval scrutiny rises.
Simpler standards and more repeatable design
Felix Bowman-Derrick, Assistant Secretary Environment and Engineering, set out a parallel effort to simplify Defence’s technical framework. More than 60 documents and over 1,000 pages of material have been consolidated into two principal public documents: the Defence Environment Manual and Infrastructure Engineering Manual, supported by more detailed internal guidance.
The intent is to rely on national standards where possible rather than reproduce Defence-specific requirements. Examples include closer alignment with the National Construction Code, a more practical approach to heritage and a simpler sustainability test where formal ratings conflict with security requirements.
The former Smart Infrastructure Handbook has been retired. Defence will use NABERS ratings where they are fit for purpose, but secure Zone 3 and Zone 4 facilities may instead be assessed through a straightforward sustainability checklist. National Construction Code adoption is voluntary for Defence during the current transition and is intended to become mandatory from 1 May 2027.
Further updates to the Pollution Prevention Manual and Contamination Management Manual are planned later in 2026, with Defence targeting about a 60 per cent reduction in their length. A new standardisation framework is also being developed to support common designs, modern methods of construction and faster delivery. Industry consultation is expected later this year.
This is a real opportunity, but only if Defence connects standard design to procurement, approvals and site interfaces. A library of standard details will not create speed by itself. Repeatability must extend through requirements, assurance, commercial models and acceptance.
Maritime infrastructure becomes a nationally integrated program
Elaine McNally, Director Program and Governance, described the Maritime Infrastructure and Integration Branch as Security and Estate Group’s single point of contact for national maritime infrastructure. Its immediate focus is the west: HMAS Stirling, Submarine Rotational Force-West, the Henderson Defence Precinct and the broader Fleet Base West Capability Program.
The branch expects opportunities over the next five years across strategic planning, program management and controls, environmental planning and assessment, PMCA, design, managing contractor, head contractor and minor works services. A dedicated industry briefing is planned once the Fleet Base West Capability Program is sufficiently developed.
The scale is becoming clearer. COL Len Rouwhorst, Director Nuclear Powered Submarine Infrastructure, said the nuclear-powered submarine program carries an estimated $53 billion to $63 billion across the decade. The first operational milestone is to support Submarine Rotational Force-West from the second half of 2027, ahead of Australia’s acquisition of the first Virginia-class submarine from around 2032.
Government has announced $8 billion over the decade for HMAS Stirling. About $2.15 billion of priority works is approved, including the submarine training centre, pier upgrades, controlled industrial facilities, emergency response, logistics, explosive ordnance storage, security and accommodation. When related maritime and estate projects are integrated, Defence is planning for up to $10 billion of work at HMAS Stirling over roughly 15 years.
The next major block is the intermediate maintenance facility, which is in development and is required to be built in the 2028-29 period. Packaging for the following tranches is still being worked through as part of the Fleet Base West program business case.
One live signal is the SRF-West landside facilities package, valued at just over $200 million and being procured as a guaranteed maximum price contract through a limited tender involving CPB Contractors, Laing O’Rourke and Lendlease. The package includes controlled industrial and maintenance support facilities, laboratories, radiological waste and effluent functions, shore power, utilities, storage and security infrastructure.
Henderson and Osborne move into their next design phase
The Henderson boundary announcement on 24 August was treated throughout the briefing as a major enabling decision. The preferred nuclear-powered submarine precinct sits within the broader Henderson Defence Precinct, which will also support general purpose frigates, Army landing craft, continuous naval shipbuilding and sustainment.
The precinct master plan and 10 per cent design were reported as completed in July, with stakeholders moving towards 30 per cent design. A joint program office has been established, while Naval Shipbuilding and Sustainment Group remains the lead delivery organisation.
The future nuclear-powered submarine shipyard is expected to include contingency and emergent docking capability by around 2032, later graving docks for scheduled deep maintenance, waterfront production facilities, workshops, specialist areas and major utility systems. The delivery vehicle and final allocation of responsibilities remain under development. Industry should not treat the boundary announcement as a settled procurement strategy.
At Osborne, the nuclear-powered submarine construction yard is planned in three principal areas:
- Area 1: raw material processing and manufacture of submarine structures;
- Area 2: painting and internal outfitting of fabricated pressure-hull sections; and
- Area 3: consolidation, reactor installation, testing, launch and commissioning.
The projected shipyard cost is more than $30 billion. Defence referred to government commitments totalling about $8.5 billion during 2026 as the initial funding base. The scale is clear, but the industry opportunity will depend on how the three areas, enabling works and long-lead facilities are packaged and sequenced.
The near-term CFI opportunity set
CFI’s portfolio remains heavily weighted towards projects already in construction, but the next group of planning and development projects is beginning to move towards market. COL Simon Everett and Ese Rainey outlined a broad set of prime and subcontract opportunities. The stated dates are indicative and remain subject to government, parliamentary and procurement approvals.
Key signals included:
- LAND 154 Phase 4 Tranche 2: a proposed $15 million to $20 million package supporting joint counter-improvised explosive device capability, with a construction tender indicated for the fourth quarter of 2026.
- Lavarack Barracks Health Centre: development is progressing towards a construction package of about $50 million, with market release indicated for the second quarter of 2027. Jacobs is the design consultant and Aurecon the PMCA.
- Borneo Barracks: infrastructure and electronic warfare facilities, including secure facilities and utilities upgrades, are being prepared for a guaranteed maximum price head contract procurement.
- Woomera: the delivery strategy has shifted away from a single managing contractor towards several head contract or guaranteed maximum price packages, with releases expected to begin from late 2026.
- Fighting Vehicles Facilities Program Stage 3: Defence is considering two head contracts and one medium works contract, with an invitation to register indicated for early 2027.
- ESTA5428 Air Mission Training System facilities: an invitation to register is intended to follow the Parliamentary Works Committee process, ahead of a guaranteed maximum price head contract procurement in 2027. The works include a new Air Mission Training School, Air Traffic Control School upgrades and living-in accommodation.
- Garden Island and Chowder Bay: the main Garden Island project is moving through early design and Defence Infrastructure Panel – Major Construction engagement, while Chowder Bay has been separated for its own scope, approval and procurement pathway.
- Randwick, Defence Plaza and St Kilda: a multi-site package includes major training-facility work at Randwick and secure laboratory fit-out at St Kilda, with staged guaranteed maximum price procurement proposed.
- ESTP1006 Airfield Minor Maintenance: the successor to ESTP5 will cover inspection and minor maintenance across up to 29 Defence airfields through four regional works packages, with releases indicated from late 2026 into 2027.
- JP9360 Deep Space Advanced Radar Capability: a managing contractor opportunity estimated at about $116 million is planned at the Harold E Holt precinct, with an approach to market indicated for early 2027.
- AIR6500 Phase 1: separate managing contractor procurement are advancing for Darwin and Williamtown, with the Darwin package following parliamentary consideration and the Williamtown process already further advanced.
- Naval Communication Station Harold E Holt: the broader redevelopment, valued at about $1 billion, has been split into two managing contractor phases. Early subcontract opportunities are expected in design, civil and in-ground works, physical security and flood mitigation.
- MQ-4C Triton deep-maintenance facilities: early contractor involvement is progressing for conversion of an existing hangar, with later subcontract packages covering structural, workshop, services and security works.
- Special Operations facilities: Phase 2 at Holsworthy and Randwick is moving towards design procurement in 2027, with construction packages expected later.
- ESTJ9111 ICT Main Works: the main tender has closed and is under assessment, with downstream ICT and construction opportunities expected following appointment.
The briefing also exposed a persistent weakness: Defence still finds it difficult to give designers early visibility without cutting across probity and confidentiality. CFI is revising PMCA requirements for market sounding and industry briefings, but this remains an incomplete answer. Design firms will still need to monitor AusTender, PMCA activity and major contractor teams rather than wait for a single reliable forward design program.
Estate Works Program: scale has outgrown its original model
Monique Knight, Director Estate Works Program Office, noted that the program has grown from about $250 million a decade ago to roughly $1 billion, with around 900 active projects each year. That scale makes the Estate Works Program one of the largest recurring channels for small and medium Defence construction work.
Industry raised concern about tenders remaining unresolved for more than 120 days, tying up bid teams and nominated resources. Defence agreed to discuss whether unsuccessful tenderers could be released earlier while a smaller number remained valid. It was not a commitment to a changed process, but the issue is commercially significant. Long evaluation periods impose a disproportionate cost on regional and specialist firms with limited teams.
Panels, contracts and subcontractor protections
Lisa Drummond, Director within CFI, outlined the future of the two principal consulting panels. The Defence Infrastructure Panel was established in 2022 with an initial end date in 2027 and three possible annual extensions to 2030. The Environment, Heritage and Estate Engineering panel is expected to use its final extension option, which would take it to 2028.
Planning for the future panel arrangements will begin in late 2026 and early 2027. Defence will consult industry, review whether every service category remains necessary, consider the appropriate number of panellists and test for overlap with panels established by DFAT, Finance and other agencies. Existing panellists will receive at least three months’ notice before a re-tender, with a broader notice to be published on AusTender.
Defence does not intend to conduct a simple mid-term panel refresh. In procurement terms, a refresh is effectively a new tender and can take close to 12 months. Nor will future panel membership carry a minimum work guarantee. Defence said it will challenge categories that have generated little or no work and avoid appointing more firms than the forecast demand can reasonably support.
Ese Rainey also detailed material changes to the Estate and Services Contract Suite:
- Managing contractor retention money is to move towards trust-account arrangements, supported by stronger PMCA audit and oversight of the time taken to release subcontractor retentions.
- A volatile materials special condition, issued in April, allows a defined portion of the contract price to be adjusted. It is applied project by project and can flow into minor and major works subcontracts.
- Following a May direction within CFI, suitable head contract procurement are being moved towards the guaranteed maximum price model, which can carry explicit contingency for fuel and other volatility. This will not replace every head contract, D&C or medium works approach.
- Pandemic adjustment provisions are being removed from the core suite, notices will increasingly be served through the project document management system, and contractors will gain clearer time and price relief for specified site conditions.
- The PMCA and design contract suites are being revised on fitness-for-purpose warranties, liability limits, consequential loss, insurance, time and payment provisions.
Defence acknowledged ongoing concern about managing contractors passing excessive risk to designers through amended subcontracts. Its standard design subcontract remains recommended rather than mandatory, but PMCA and legal review obligations are being strengthened to test whether amendments are fair, reasonable and consistent with the managing contractor’s own obligations.
Indigenous participation becomes more targeted
The new Defence Ready Indigenous Supplier List is intended to supplement, not replace, Supply Nation. It captures information that is important to construction procurement, including work-value capability, Office of the Federal Safety Commissioner accreditation and Defence security status.
Defence reported 32 respondents with OFSC accreditation and a further 21 pursuing it. The list will be refreshed every 12 to 18 months and used by project teams to identify suitable businesses for limited Indigenous procurement. It will also be provided to Defence Infrastructure Panel – Major Construction contractors as a first reference point when building subcontractor teams.
The full database will not be made public because it contains commercially sensitive information, although Defence is considering a limited public page and a consent-based release of supplier contact information. For Indigenous firms, the practical lesson is that Supply Nation registration alone may no longer be enough to become visible for larger construction packages. Accreditation, security readiness and a specific capability statement matter.
PFAS remains a project risk, not a separate environmental issue
Nelma Akhund, Acting Assistant Secretary PFAS, warned project teams not to treat PFAS as a specialist program sitting outside mainstream delivery. Defence has assessed 28 priority sites, with 19 requiring remediation. Work is substantially advanced in the Northern Territory, Western Australia and South Australia, while much of the remaining remediation is in New South Wales, Queensland and Victoria.
The immediate lesson is commercial. PFAS can materially alter excavation, soil movement, disposal and staging costs. Defence expects project environmental managers to identify and price that risk early, use the Construction and Maintenance Framework and examine options such as stabilisation and reuse where contamination levels and approvals permit.
The government’s response to the independent PFAS review will also generate further work. The review identified community working-group arrangements for Williamtown, Oakey and Katherine. The Oakey group is already operating, while the other arrangements remain at different stages of government consideration and consultation.
Indo-Pacific infrastructure is now a substantial market
COL Karl Reynolds, Assistant Secretary Indo-Pacific Infrastructure, described a portfolio of around 30 active projects across 19 partner nations, with approximately $900 million of current and planned work. The program spans Southeast Asia and the Pacific and includes maritime facilities, barracks, accommodation, police and border infrastructure, utilities and maintenance.
Recent examples include Blackrock Camp and the Maritime Essential Services Centre in Fiji, the Cook and Tiroas Barracks redevelopment in Vanuatu, border outposts in Solomon Islands and Papua New Guinea, Lombrum Naval Base and the wider Pacific Maritime Security Program.
Upcoming work spans the full lifecycle: PMCA opportunities in Fiji, Samoa and Papua New Guinea; master planning and concept design; head contracts, construct-only and design-and-construct packages; and smaller regional minor works. Additional initiatives funded in the May budget are still being developed with partner governments and were not included in the displayed pipeline.
Most opportunities will be advertised through AusTender, although smaller country-managed Defence Cooperation Program works may follow local channels. Defence is also working to align its international contract suite more closely with the domestic CFI suite.
Technical capability is only the entry ticket. Defence stressed local engagement, cultural understanding, realistic logistics, maintainability and workforce development. In remote partner nations, a sophisticated facility that cannot be operated or maintained locally is a failed outcome even if it is delivered on time and budget.
What this means for industry
The briefing points to a strong market, but not an easy one.
First, volume will rise unevenly. A few large programs will dominate spending, particularly at HMAS Stirling, Henderson, Osborne and northern bases. Firms must separate funded work from unapproved decade allocations and early planning signals.
Second, cost and governance capability will differentiate firms. Defence needs credible estimates, controlled contingency, clear uncertainty and approval-ready evidence. A low tender price will not compensate for weak cost logic.
Third, delivery models are still moving. Guaranteed maximum price contracts, alternative financing, panel retenders and program packaging will change how risk reaches the supply chain. Read the actual tender and subcontract, not the procurement label.
Fourth, supply-chain positioning matters earlier. Many large opportunities will be limited to panels or shortlists. Smaller firms need credible relationships with PMCAs, managing contractors and panel members before packages are released.
Finally, resilience is now a design requirement. Energy security, physical protection, logistics, contamination and maintainability will increasingly shape estate scope and approvals.
Follow the updates in Helyx
All CFI project updates arising from today’s briefing have been added to Helyx, including the latest dates, procurement signals and delivery strategies. View the complete list here.
You can set up a Helyx account instantly.
If you would prefer a guided introduction, book a demonstration and free 14-day trial.
Author: Darian Macey
Darian is a former Engineering Officer with the RAE with tertiary qualifications in Engineering and Project Management. He is a leading practitioner within Australia's NSI sector with previous employment in Government, project management and building contractor organisations.
