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Australian Defense Minister Seeks Better Relations With Industry

Nov. 27, 2013 - 03:45AM   |  
By NIGEL PITTAWAY   |   Comments
Australia Defence Minister David Johnston says that his government will not cut defense spending further and will work to return it to 2 percent of GDP over the next 10 years.
Australia Defence Minister David Johnston says that his government will not cut defense spending further and will work to return it to 2 percent of GDP over the next 10 years. (Saeed Khan / AFP)
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CANBERRA — Australia’s newly elected defense minister, Sen. David Johnston, says that his government will not cut defense spending further and will work to return it to 2 percent of GDP over the next 10 years.

That’s good news, he said, for the Australian defense industry, which has seen minimal levels of work flowing to them in the last two or three years. Johnston has also pledged to deliver a new defense white paper, defense capability plan [DCP] and industry policy statement suite within 18 months of the coalition government gaining office in September.

“I’ve promised those within 18 months, but I’m looking to underpromise and overdeliver,” Johnston said in a recent interview at his Parliament House office here. “I’d love to be in a position to put them all on the table mid to late next year. The white paper will include an industry policy and a defense capability plan, costed, relevant and cohesive. And if we can achieve that in accord with our white paper aspirations within 18 months of election, we will have gone a long way towards creating a better environment for a relationship to flourish between industry and Defence.”

He criticized the present relationship between the Defence Department and industry, and particularly the timeliness of the Defense Materiel Organisation’s (DMO) contracting process.

“For a long time we’ve been very concerned about the way DMO relates to industry; tender documents that have to be brought into the room in a wheelbarrow concern me greatly as being less than commercially viable,” Johnston said. “One of my principal concerns in the administration of the portfolio is timeliness. Industry must be timely as a matter of survival and the department in all of its iterations discloses very little concern towards timeliness. This is something I really must change.

“When we say this project will go to tender on these dates, we need to have those dates cast in stone. When we say we will resolve the down-select of the tender on these dates, that date must be cast in stone so that the participants can show their bank managers and financiers and shareholders that there is some formal rhyme and reason in terms of sheer schedule.

“My task is to inject discipline into the way the monopsonistic customer sets out a plan and adheres to it in a disciplined and timely way,” Johnston said. “I would like to review the DCP on a quarterly basis, and I want to set dates and times that are adhered to in a strict sense so that the calendar for the scheduling of defense work is something that everyone can look to and have faith in.”

Graham Priestnall, president of the Australian Industry and Defence Network, a peak industry association for small-to-medium enterprises wishing to do business in the defense and security sectors, agrees.

“You can’t have a situation where it takes the preferred tenderer nine months to get into contract — that’s ridiculous,” Priestnall said.

“It is difficult to predict if the relationship between [the Defence Department] and industry will change in the next 12 months, however the new government has stated that they are seeking greater interaction and transparency, notwithstanding the contractual things that have to happen, but I’d like to think it will improve.”

From a DMO perspective, Michelle Kelly, head of the defense industry division, said that the department is always looking for ways to improve how it does business, including its relationship with industry.

“DMO continues to engage with industry at many levels and in a wide range of forums to progress new initiatives in contracting, skilling and delivery of complex projects,” she said. “Examples include the adoption of rolling wave performance-based support contracts, trialling a managing contractor model for acquisition projects, and continually reviewing what work is best placed to be done within industry rather than government.”

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