With major defence procurement projects now under way, the Government says it will hold defence primes 100 per cent responsible for achieving maximum Australian industry content (AIC).
Defence Industry Minister Melissa Price said she wanted to ensure the Defence Capability Acquisition and Sustainment Group (CASG) possessed the people with commercial and private sector experience to guide defence procurement at this vital stage.
The government’s investment in defence capability had brought countless opportunities for Australian industry, she said.
“But we need to go even further in our support for small business,” she said in a video message to the ADM congress in Canberra.
“As we enter the delivery phase of these major projects I am 100 per cent focused on holding the primes to account on their obligations. That’s why I have directed Defence to establish an independent AIC audit program.”
“It will investigate and report on whether major contractors are meeting their AIC obligations. I know this is a primary concern to all of you in defence industry and I have heard you loud and clear.”
Ms Price said she thought we were doing a good job but could do better.
CASG head Tony Fraser said AIC was clearly a government priority and it was also a CASG priority.
“We have appointed an individual to lead AIC…..and reporting direct to me and I will assign him the Smart Buyer process and the Smart Buyer team as well as the independent assurance team,” he said.
“That way will drive in AIC at that highest level early on in the acquisition strategies, input into the capability management steering groups and considerations, the gate reviews as we develop our work.”
Navy Chief Vice Admiral Michael Noonan said he was committed to AIC but was in no position to mandate AIC levels.
“I don’t think it is particularly helpful personally to be mandating a specified percentage of AIC in any particular program but I think the commitment to striving to have the greatest possible amount of Australian industry content in the design, the build, the sustainment and the operation of each and every one of our platforms is absolutely inherently what we should be doing,” he said.
But there were aspects of naval capability which simply could not be made in Australia, he said, citing the combat system of Collins and Attack class submarines.
That would change as the shipbuilding program proceeded.
“What I expect to see as part of the commitment to continuous shipbuilding is some of those things we are currently sourcing overseas will eventually be built on shore. It makes great sense,” he said.