By Darian Macey, June 10 2025
Are Local Industry Capability Plans just paperwork—or policy with teeth?
By Darian Macey
The Australian National Audit Office (ANAO) has just released Report No. 31 (2024–25) reviewing how well Defence is implementing its own rules to maximise Australian industry participation. For those of us working across the Defence Estate—particularly in construction—there’s plenty to take in.
The headline? Defence isn’t doing enough to enforce its own Local Industry Capability Plan (LICP) requirements.
This matters because LICPs are supposed to ensure Australian businesses, especially those near Defence sites, get a fair shot at contributing to major works. Instead, the audit found widespread inconsistencies, delays, and a lack of accountability across eight major Defence contracts.
Two of those contracts are well known to our community:
- EST07490 – RAAF Learmonth Electrical Works, delivered by IPSA under the Estate Works Program and administered by Augility and Aurecon for the Service Delivery Division.
- EST00346 – RAAF Tindal Redevelopment, delivered by Lendlease and administered by RPS for the Infrastructure Division.
Both projects exceeded the $7.5 million threshold that triggers LICP obligations. But neither contractor had an approved, finalised LICP in place at contract execution. In IPSA’s case, the plan stayed in draft for over a year. For Lendlease, the planning phase LICP was recycled with no formal update when the $794m delivery phase began. Defence didn’t publish the plans either, as it’s required to do.
What went wrong?
The audit found:
- Outdated templates still in circulation,
- No formal exemptions where LICPs were missing,
- Flow-down obligations to subcontractors poorly defined or absent,
- Monitoring and reporting almost nonexistent.
What does this mean for you?
If you’re a contract administrator, commercial manager, or project officer in the Defence Estate, this report is a call to action. Here’s what you can do:
- Check your templates: Make sure LICPs are properly scoped, required, and referenced.
- Don’t skip the early planning: Industry participation must be considered before the RFT goes out.
- Document exemptions: If an LICP isn’t required, record the rationale clearly in the endorsement to proceed.
- Follow up post-award: Ensure plans are finalised and monitor contractor compliance during delivery.
- Publish where required: Public transparency is part of the policy—don’t let it fall through the cracks.
The takeaway?
The policy isn’t broken, but the practice is. Better execution is needed across the board to support local industry and maintain Defence’s credibility as a client.
With hundreds of Estate Works Program and Infrastructure Division projects in the pipeline, there’s never been a better time to lift our collective game.
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.
