How the Engagement Process Works Under DIP-MC

Business news Contractor Opportunity Panels Procurement Policy Tips & Tricks

By Darian Macey, April 2 2025

Being on the Defence Infrastructure Panel – Major Contractors (DIP-MC) is just the first step – securing work still requires going through an engagement (tender) process for each project.

Success lies not just in being on the panel, but in understanding the nuances of how it operates.

The DIP-MC engagement process closely mirrors a standard tender, with a few panel-specific twists to be aware of:

For each project, Defence (the procurement team) may first issue an optional EOI to a subset of panel members). This is a short letter or notice gauging interest and capacity. Defence will decide which panellists get the EOI based on capability and licensed jurisdiction coverage for that project. If you receive an EOI, responding is important – a non-response is taken as a sign you do not intend to tender. Remember, an EOI is not an offer of work nor a guarantee; it’s simply an early market sounding to inform Defence’s procurement strategy. From a panellist perspective, treat EOIs seriously: it’s your chance to signal interest or opt out early without penalty.

Before any tender documents are released, Defence will issue a DCA for signature. This is essentially a non-disclosure agreement specific to the panel, ensuring all bidders understand their confidentiality obligations (and any disclaimer of liability by the Commonwealth) before seeing the detailed project brief. The DCA step will typically involve only those panellists who either responded positively to the EOI or were otherwise down-selected in the approved Procurement Plan. No panel contractor gets the Request for Tender (RFT) until they’ve signed the DCA, so prompt execution is key. The DCA template is standardised for the panel (one template covers all delivery models) and is based on the similar agreement from Defence’s traditional suite (CFI Suite) with adaptations for the panel context.

Once DCAs are in place, Defence will issue formal RFT packages to the selected panellists. The tender documents under DIP-MC use dedicated panel templates, tailored for each delivery method and integrated with the Panel Agreement terms. It’s crucial to note that you cannot use the normal Defence Suite of Facilities Contracts tender forms for DIP-MC bids – the panel has its own set of tender conditions. The only part carried over from the standard suite is the Conditions of Contract (the legal terms), which are inserted as Part 4 of the tender docs, corresponding to the chosen delivery model. Everything else (tender instructions, response schedules, etc.) comes from the panel-specific RFT template. In practice, this makes your life easier: the panel RFT is shorter and omits a lot of the repetitive compliance info that you’ve already provided when joining the panel. Still, read the RFT carefully – each delivery model has unique requirements, and the templates might be updated over time. Prepare your tender response as you normally would, addressing all technical requirements, pricing, and evaluation criteria outlined.

The tender period under DIP-MC is conducted like any other competitive Defence tender – panel members prepare and submit their bids by the deadline, conforming to the stipulated format. Defence will evaluate tenders in line with the usual process (PDDP Part 2), meaning no special treatment just because it’s a panel. In other words, the standard Defence procurement rules of probity, fairness, and value for money apply. The panel approach does not change how tenders are assessed; it simply streamlines how tenderers are invited. Expect a Tender Evaluation Board to review submissions against the criteria (which will be familiar: capability, past performance, management plans, price, etc.), conduct interviews if needed, and then select a preferred tenderer. Both competitive and direct appointments are possible: in most cases Defence will competitively tender among multiple panellists, but in certain cases they may directly engage a single panel member (for example, if only one is available or for urgent/emergency works). Any direct sourcing would still require internal approvals and value for money justification.

Following evaluation and any negotiations, Defence will award the contract to the successful panel contractor. The contract will be a project-specific contract under the panel (using the relevant delivery model form, as noted). Unsuccessful panel bidders should expect a debrief as per normal practice. It’s worth noting that all panel contracts are still under the umbrella of the Panel Deed – so panel conditions (e.g. overarching performance obligations, insurances, KPIs) continue to apply in addition to the project contract terms.

Key things to remember in DIP-MC engagements:

Only invited panellists can bid (no outside bidders, unless Defence breaks from the panel).
You must have the appropriate state building licence, or you won’t be invited.
You must sign the DCA before getting tender docs.
Use the panel tender templates, not the old ones (they won’t even be provided to you).
Tenders will be evaluated with the same rigour as any Defence tender – competition remains tough.
Being on the panel is a privilege, but you still need to win each project on merit!

Flexible Delivery Models (and Their Risk Profiles)

One of the strengths of DIP-MC is its flexibility in delivery models. Defence isn’t limited to a one-size-fits-all contract – they can choose the best delivery method for each project, and the panel contractors must be prepared to work under various models. The Panel Agreement allows engagements under five delivery models, each with different risk allocations and collaboration levels. Here’s an overview of each model and what it means for contractors:

Under a construct-only contract, the head contractor is responsible solely for construction. Defence (the principal) provides a complete design, and the contractor must build according to that design. This model is straightforward – the contractor’s main risk is around delivering on time, on budget, and to spec, but design risk remains with Defence (and its design consultants). Construct-only is typically used when Defence has a fully documented design at tender time. Flexibility is lowest for the contractor (no design input), but risk is somewhat reduced because any design errors or changes often fall back on the principal. Contractors should still thoroughly review the design for constructability; while you may not carry design liability, you could face delays if issues arise.

In a D&C engagement, the contractor is responsible for completing the design and the construction. Defence will give a performance brief or preliminary design, and the contractor finalises the design to meet the requirements, then builds it. This offers more flexibility and innovation to contractors (you can propose solutions to meet the outcomes), but also shifts significant risk to the contractor. You now take on design risk – if something was missed or if requirements are hard to meet, it’s largely on your shoulders. D&C can be efficient since it integrates design and build, but ensure you have strong design capability (often via consultants under you) and robust management to control scope and avoid costly redesigns.

This model is a hybrid between the above two. Defence will have started a design (maybe to ~30-50%) using their consultants, then the contractor is engaged to take over and complete the design and then construct. Essentially, the partly completed design is novated to the contractor (the original design team may even transfer to work under the contractor). From that point, it resembles D&C – the contractor has single-point responsibility for finishing design and delivering the work. The risk profile is similar to D&C (you bear design completion risk), but one nuance is that the initial design direction is set by Defence. If the early design has flaws or omissions, contractors must manage those issues (possibly via contract mechanisms or variations). Flexibility is medium – you have to work with the inherited design but can still influence final outcomes. Clear communication with the novated designers and Defence’s brief is critical here.

ECI is a two-phase approach that brings one or more contractors onboard early in the project planning or design stage, before final construction commitment. In Phase 1, Defence might engage ECI contractor(s) (and often a design services consultant separately) to collaboratively develop the design, program, cost plan, and risk management for the project. This is typically done through a consultancy-style contract or a preliminaries agreement. The contractor’s expertise is used to improve buildability, cost certainty, and schedule optimisation from the outset. At the end of Phase 1, Defence can then either negotiate a construction contract with one of the ECI contractors (enter Phase 2 for delivery) or go out to tender (possibly still limited to panel). If proceeding, Phase 2 would be a lump-sum or fixed contract for construction. ECI offers high flexibility and is great for complex projects where contractor input can shave off risks early (e.g. remote sites, technically challenging works). Risk is shared in Phase 1 (since no firm price commitment yet), but the contractor invests time with no guarantee of Phase 2 – so it’s somewhat a paid competitive process. Panel contractors should view ECI as an opportunity to showcase value beyond price – your innovation and problem-solving in Phase 1 could win you the Phase 2 without a full rebid. If you do go to Phase 2, ensure the scope and price are well-defined to avoid later disputes.

In a managing contractor model, Defence engages a contractor early as a project manager/constructor hybrid. The managing contractor is involved from the design phase and manages both design development and subsequent construction delivery, typically by engaging trade subcontractors and consultants on behalf of Defence (often as agent or through managing contractor subcontracts). The key difference is the commercial arrangement: managing contractor is often not a fixed-price build; instead, the contractor gets a fee to manage the project and an agreed target cost or cost-reimbursable structure for the works. Defence retains more cost risk (paying actual costs of trades plus fee), but gains flexibility and the contractor’s management expertise. The managing contractor acts as an extension of the client team, coordinating design, permits, procurement and construction. For the contractor, this model limits price risk (since you’re not typically on a lump sum for all construction), but you assume heavy process and performance risk – you must deliver the project to the client’s satisfaction within the agreed cost target or budget. Any overrun might reduce your fee or reputation. This model is useful for highly complex or fast-track projects where scope may evolve, and a collaborative approach is needed. For panellists, having strong program and subcontractor management capability is a must for success as a managing contractor. Also be prepared for open-book cost transparency and rigorous client oversight.

In summary, DIP-MC allows Defence to pick the right tool for the job. Whether it’s a straightforward build (Construct Only), a turnkey package (D&C), a collaborative journey (ECI/Managing Contractor), or something in between, the panel has it covered. As a contractor, be ready to operate under any of these models. Each comes with different roles and risks, so ensure your team is versed in all five and tailor your bid strategy accordingly. The good news is that all panel members have been pre-qualified on the basis of demonstrating capability across these delivery methods.

How DIP-MC Procurement Differs from Standard Defence Contracts

If you’re familiar with the traditional Defence Suite of Facilities Contracts (the “Suite”) and the usual open tender process, you’ll find much of DIP-MC business-as-usual – but there are some key differences and efficiencies baked into the panel system. Here are the major ways DIP-MC procurement departs from the standard procedures:

Dedicated Panel Templates & Conditions:
DIP-MC tenders use panel-specific templates that reference the Panel Deed and obligations unique to panellists. These templates replace the typical ASDEFCON documents and exclude steps like the usual “Invitation to Register Interest,” making for a one-stage procurement. For contractors, this reduces duplication but requires close attention to the panel’s modified formats.

Exemption from the GPJR Act:
DIP-MC procurements are not considered “covered procurements” under the Government Procurement (Judicial Review) Act 2018. That means panellists cannot seek legal redress under the Act for tender disputes. This reduces the likelihood of delays and highlights the importance of resolving issues during panel establishment. Defence’s internal complaint pathways still apply.

Streamlined Compliance and Documentation:
Since panel contractors were already vetted at the time of appointment, many standard schedules are omitted in subsequent tenders. This includes documents like WHS accreditation, financials, or prior performance history. However, contractors must maintain these credentials throughout the panel term and notify Defence of any changes. The reduced admin allows panellists to focus on project-specific solutions.

Alignment with Policy Requirements:
DIP-MC tenders are structured to comply with major Commonwealth policies by default. These include the Indigenous Procurement Policy, the Defence Policy for Local Industry Participation, the Environmentally Sustainable Procurement Policy, and the Australian Skills Guarantee. All projects over $200M qualify as “Flagship Construction Projects,” which means higher workforce targets and skills commitments. Panel templates incorporate these requirements from the outset.

Panel-Specific Contract Conditions:
Contracts awarded under DIP-MC will reference the panel deed, with several overarching obligations managed at the panel level—such as security, insurance, and performance. Joint bids are allowed (if both parties are on the panel and invited), which wasn’t typical in the old system. While project contracts are slimmer, all panel obligations still apply.

In Summary:
DIP-MC delivers efficiency by reducing procurement lead times and paperwork. For panellists, this means leaner tenders and faster processes—but also a need to remain alert to ongoing compliance. For subs and consultants, less documentation may be requested, but expectations around local content, Indigenous engagement, and skills development remain high.

Tips for Panel Contractors: Staying Compliant and Competitive

Getting on the DIP-MC panel was no small feat – now the focus shifts to staying there and winning work. Here are six practical ways to keep your edge:

1. Know Your Obligations
Panel membership comes with ongoing requirements. These include maintaining insurances, WHS accreditation, and compliance with workplace laws (e.g. gender equality). You must notify Defence of any major changes such as restructuring or compliance lapses. Treat the panel deed as a live contract – failure to meet these obligations can lead to suspension.

2. Attend Mandatory Training
Defence expects your Panel Manager (and possibly others) to attend training sessions – either in person or via webinar. These sessions help ensure you’re using panel processes correctly and understanding evolving expectations. Project-specific training may also be required, such as systems briefings or compliance refreshers. Internally, ensure your broader team (estimators, PMs, legal) is across DIP-MC requirements.

3. Maintain Licences and Security Clearances
To be eligible for projects, you must hold the relevant construction licences in the project’s jurisdiction. If you’re planning to expand your footprint, secure licences early. Also, consider your DISP membership. While not mandatory for all projects, classified works may require it. Start security clearances for key staff well in advance to avoid delays.

4. Respond Promptly to EOIs
If Defence sends an Expression of Interest (EOI), reply clearly – even if declining. This helps position your business for future work. If you’re interested, show it. Share your capacity, interest and early ideas. And if things change (new capabilities, resourcing limits), update the Panel Manager. Communication helps influence who gets invited next time.

5. Stay Sharp on Tenders
Even as a panellist, competition is tough. Your tender submissions must strictly conform to instructions. Defence will judge on value, not just price. Emphasise your technical approach, delivery method, and team. Highlight prior experience and lessons learned from panel engagements. Be especially clear in meeting policy objectives around Indigenous participation, local content and skills development.

6. Monitor Changes and Performance
Keep up with any updates to panel documentation, policy targets or templates. SEG may issue new requirements. Track your own performance – Defence will. Consistent delivery, responsiveness and collaboration build trust and increase your chance of future awards. Review any panel feedback mechanisms and keep refining your offer.

Ready to Succeed with DIP-MC?

DIP-MC is more than just a streamlined panel arrangement – it represents a significant shift in how major Defence infrastructure projects are procured and delivered. While the panel offers efficiencies and clarity, it also demands professionalism, preparedness, and performance from its members. Contractors must stay agile, keep up with compliance and policy shifts, and continue proving their value on every project. With flexible delivery models, standardised templates, and a clear emphasis on broader government priorities, the panel creates a consistent but competitive playing field. Success lies not just in being on the panel, but in understanding the nuances of how it operates – and executing each engagement with precision and purpose.

➡️ Download the DIP-MC contact list to get in touch with the 18 panel firms. Start conversations and build partnerships – early engagement can position you for success.

➡️ Subscribe to the DECNet Defence Estate newsletter for ongoing updates, insights, and tips about Defence infrastructure projects. The landscape will evolve, and staying informed is the best way to stay ahead of the curve.

➡️ Take our online course Mastering Defence Infrastructure to learn everything you need to know to grow your business or grow your career in this exciting sector.

➡️ Share this guide with your colleagues, bid teams, and industry partners. Preparation is a team effort – make sure everyone involved in your Defence projects understands the panel’s ins and outs, from your project managers to your legal advisors and subcontractors.

By being proactive, compliant, and collaborative, you can make the most of the DIP-MC era. Defence’s infrastructure needs are vast and challenging – but with the right approach, the new panel will unlock efficient delivery and robust opportunities for those ready to rise to the occasion. Good luck, and see you on site!

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.