Defence industry strategies and programs

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Global Supply Chain Program

The Global Supply Chain (GSC) Program involves working with multinational defence companies, or ‘primes’, to identify opportunities for Australian companies within their international supply chains. See Global Supply Chain Program.

Defence Export Strategy

The Defence Export Strategy, released in January 2018, builds on the Government’s defence industry policy by setting out a comprehensive system to plan, guide and measure defence export outcomes over the coming decade.

The Government recognises that Australian industry cannot sustain itself on the needs of the Australian Defence Force alone. New markets and opportunities to diversify are required to help unlock the full potential of Australian defence industry to grow, innovate, and support Defence’s future needs.

The strategy provides $20 million in additional annual funding from 2018-19 to support Australia’s defence exports. A new Australian Defence Export Office will be created within the Department of Defence to provide a focal point for defence exports and drive implementation of the strategy.

Defence Export Strategy cover

Read the Defence Export Strategy.

Industry Development Projects

Industry Development Projects are sector-wide initiatives aimed at improving the ability of the defence sector to produce products and services that have a specific defence application or contribute to Defence capabilities.

Five industry development projects have been approved since the launch of the CDIC and are currently underway:

  • defence business maturity framework
  • barriers to Indigenous business participation in defence industry
  • implications of digital transformation for Australia’s defence industry
  • assessment of defence industry certifications and accreditations
  • CDIC information architecture and systems development

Defence Industrial Capability Plan

The 2018 Defence Industrial Capability Plan brings together in one place a description of recent Government policies and programs available to enhance industry’s capacity to deliver defence capability. It also identifies entry points for businesses looking to join Australia’s defence industry and programs available for businesses already supplying goods and services to Defence.

The 2018 Defence Industrial Capability Plan was a key deliverable of the 2016 Defence Industry Policy Statement, and builds on the Naval Shipbuilding Plan released in 2017 and the Defence Export Strategy released in 2018.

2018 Defence Industrial Capabilty Plan cover

It outlines the Government’s vision to build a robust, resilient and internationally competitive Australian defence industry base that is better able to help meet defence capability requirements, advance Australia’s economy and create and sustain Australian jobs.

The plan also introduces a new Sovereign Industrial Capability Assessment Framework and identifies an initial ten Sovereign Industrial Capability Priorities that are required to be maintained and supported in Australia.

Read the 2018 Defence Industrial Capability Plan.

Sovereign Industrial Capability Priorities

Sovereign Industrial Capability Priorities are industrial capabilities considered critical to Defence and for which Australia must have access to, or control over, the skills, technology, intellectual property, financial resources and infrastructure that underpin those capabilities. The initial Sovereign Industrial Capability Priorities are (in no particular order):

  • Collins class submarine maintenance and technology upgrade
  • continuous shipbuilding program (including rolling submarine acquisition)
  • land combat vehicle and technology upgrade
  • enhanced active and passive phased array radar capability
  • combat clothing survivability and signature reduction technologies
  • advanced signal processing capability in electronic warfare, cyber and information security, and signature management technologies and operations
  • surveillance and intelligence data collection, analysis, dissemination and complex systems integration
  • test, evaluation, certification and systems assurance
  • munitions and small arms research, design, development and manufacture
  • aerospace platform deep maintenance.

Defence and the CDIC will progressively map and gather detailed information for each Sovereign Industrial Capability Priority, with the aim of releasing an implementation plan for each Sovereign Industrial Capability Priority from mid-2019. These plans will outline the desired level of sovereignty and how each capability will be developed and supported across Defence planning to maintain capacity and resilience.

A Sovereign Industrial Capability Priority Grant is available to ensure Australian businesses have the capacity and resilience to support Defence’s most critical capabilities.

Read more about the Sovereign Industrial Capability Priorities.

Defence Industry Skilling and STEM

Over the next decade and beyond, demand will increase for Australian workers with trade, technical and science and technology skills to build and maintain Defence capabilities. Australian design, construction, integration, sustainment, services and support capabilities will all be critical.

The CDIC works with businesses to help improve business capabilities, including advice and funding for skills development for their existing workforce.

UAV open day

Defence runs initiatives that aim to expand the pool of skilled workers from which the defence industry is able to recruit, to enhance work and career pathways, and to address specific skills gaps within defence industry capability.

Initiatives include the following:

  • The long-term Defence Industry Skilling and STEM Strategy to help the Australian defence industry to have a workforce with the right skills to meet future capability requirements and support the delivery of the Integrated Investment Program.
  • The Naval Shipbuilding College scheduled to open in 2018, providing courses and retraining for individuals wanting to be part of the naval shipbuilding enterprise.
  • The Defence Engineering Internship Program and the School Pathways Programs, run as part of the Industry Skilling Program Enhancement initiative.
  • Adopting a more coordinated approach to investment between Defence, industry, state and territory governments and the research sector. This is critical to maximise the return on our investment in skilling our industry for the future.

Read more about Defence Industry Skilling and STEM Support.

Australian Industry Capability Program

The Australian Industry Capability (AIC) Program encourages involvement of Australian industry in supply chains. Under the program, prime contractors wishing to compete for Defence tenders over $20m are required to identify Australian suppliers to meet the needs of Defence contracts.

The AIC Program aims to:

  • provide opportunities for Australian companies to compete on merit for defence work within Australia and overseas
  • influence foreign prime contractors and original equipment manufacturers, including Australian subsidiaries, to deliver cost-effective support
  • facilitate transfer of technology and access to appropriate intellectual property rights
  • encourage investment in Australian industry.

Read more about the AIC Program.

Defence Policy for Industry Participation

The 2019 Defence Policy for Industry Participation is designed to make it easier for Australian companies to compete for Defence work.

The policy requires tenderers to address Australian industry involvement for all Defence materiel and non-materiel procurements above $4 million, and for the procurement of construction services above $7.5 million.

It builds on the Australian Industry Capability Program and Local Industry Capability Plan. To meet the requirements of the policy, successful tenderers will need to provide detailed commitments on how they will utilise and develop Australian industry. These commitments will become contracted deliverables and successful tenders will be required to report on their performance against them.

Cover of 2019 Defence Policy for Industry Participation

There is no ‘one size fits all’ approach to Defence procurement. The application of the policy will need to be pragmatic and flexible to reflect the wide range of Defence’s procurement activities, and balance consideration of Australian industry with the need to lower the costs of tendering. The policy does not mandate or preference local suppliers.

Find out more about the Defence Policy for Industry Participation.

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