Defence’s Biggest Buyers Call for Early Engagement and Agility

By Darian Macey, August 6 2024

On 1 August, I attended the Defence + Industry Conference hosted by the Office of Defence Industry Support at the National Convention Centre in Canberra. While the conference primarily targeted the wider defence and aerospace industry, I quickly realised that the insights shared were equally relevant to the defence infrastructure submarket. Hosted by the Office of Defence Industry Support, the conference began with a pivotal panel discussion titled “Session 1 – Defence Industry Development Strategy.” The session featured presentations and a Q&A by key Defence leaders: Mr. Chris Deeble, AO, CSC (Deputy Secretary, Capability Acquisition and Sustainment), Mr. Jim McDowell (Deputy Secretary, Naval Shipbuilding and Sustainment), and Air Marshal Leon Phillips, OAM (Chief Guided Weapons and Explosive Ordnance).

Key Themes and Insights

1. Strategic Alignment and Industry Engagement The panel emphasised the need for Defence and industry to work together proactively. Mr Deeble, a former Air Vice-Marshall and Chief Executive at Northrop Grumman, highlighted that Defence must engage with industry earlier in the procurement process to ensure preparedness when tenders are released. He also stressed the importance of ethical behavior and integrity in these engagements to maintain equity and fairness. This approach is vital for both the broader defence industry and the infrastructure submarket.
2. Flexibility in Implementation Mr McDowell, a former CEO of BAE Systems Australia, discussed how Defence strategies must adapt to current circumstances and be situational. He underscored the importance of maintaining security while engaging transparently with industry, ensuring that Defence strategies remain effective and relevant. This adaptability is just as crucial in the defence infrastructure submarket, where project requirements can frequently change.
3. Balancing Speed and Thoroughness The panel talked about the necessity for faster decision-making and procurement processes. Traditional methods of extensive tender evaluations might not always be practical. They proposed expedited requests for information (RFIs) and more agile decision-making to streamline engagements with industry. This approach can greatly benefit the infrastructure submarket, where timely project delivery is often critical.
4. The Role of Defence Panels There was significant focus on the Defence Support Services (DSS) panel and Managed Services Provider (MSP) arrangements. The panelists acknowledged the high rates and value-for-money concerns associated with these panels and mentioned ongoing efforts to benchmark rates and skills to ensure these panels deliver better value for money and align with government-wide contracting frameworks. These considerations are equally pertinent to infrastructure projects, where cost-efficiency and skill alignment are key.
5. Workforce Balance and Development One key takeaway was the need for a balanced workforce comprising Australian Public Service (APS) personnel, Defence Force members, and contractors. This balance ensures the right mix of skills and capabilities to meet Defence’s needs. Upskilling APS personnel and integrating contractors effectively were identified as priorities. This balanced workforce approach is essential for managing both defence and infrastructure projects efficiently.
6. Supporting Mid-Tier and SME Growth Air Marshall Phillips discussed the importance of growing mid-tier suppliers and SMEs within the Defence industry. He highlighted financial resilience, diversity in products and services, and a focus on innovation and export capabilities as essential characteristics for mid-tier companies. These companies must also adopt contemporary practices such as digital engineering and cyberworthiness to remain competitive. These points are particularly relevant to the defence infrastructure submarket, where mid-tier firms and SMEs play a significant role.

Conclusion

The Defence Industry Development Strategy session provided valuable insights into the evolving relationship between Defence and industry. The emphasis on early engagement, adaptability, and a balanced workforce highlights Defence’s commitment to effective and efficient procurement. As Defence continues to refine its strategies and processes, collaboration with industry partners will be crucial in meeting the strategic and operational needs of Australia’s Defence Force.

Although the conference was primarily targeted at the broader defence and aerospace industry, the insights gained are just as applicable to the defence infrastructure submarket. The importance of continuous improvement and adaptability in Defence-industry engagements ensures that both parties can meet the challenges of an evolving strategic environment. As a first-time attendee, I found the session enlightening and directly relevant to my work in the defence infrastructure sector.

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.