During the 2020 Nagarno-Karabakh conflict ^[1], Azerbaijani forces used expendable drones to target Armenia’s conventional forces and destroy their tanks, artillery and air-defence systems. The conflict provides a broad example of how a competent irregular or asymmetric force being targeted by a conventional force can disrupt the classical doctrinal roles of branches of the military.

In the face of such innovative approaches to force structure, Australia’s defence organisation needs to consider adopting a different methodology for its acquisition and contracting processes.

Defence acquisition is largely focused on a small number of exquisite platforms whose delivery times can be measured in years. For instance, there was a 16-year gap between Australia joining ^[2] the joint strike fighter program in 2002 and the arrival of the Royal Australian Air Force’s first two F-35s in 2018.

This means that the complex capabilities Defence obtains based on the threats it envisaged at the time of acquisition are likely to lag developments in the threat environment. This mismatch can be attributed to Defence’s capability-delivery processes ^[3] and the suite of Defence contracting templates and business systems, which work to timeframes appropriate for more benign strategic circumstances when the warning time for conflict was assumed to be at least 10 years.

Defence’s acquisition and business processes play a valuable role in orchestrating the complex systems and activities that make up an increasingly integrated military and defence organisation. However, these processes have been built incrementally over decades to reduce risk and inject predictability into defence budgeting. That remains a challenging prospect since budget blowouts ^[4] do occur.

These processes have made the organisation risk-averse and affected the mental models of Australian Defence Force personnel in a world where threats change routinely. This is the point the government sought to address in its 2020 defence strategic update ^[5] in the context of Australia’s deteriorating strategic environment.

Lengthy acquisition times because of bureaucratic processes are not unique to Australia. The US Department of Defense ^[6] uses the planning, programming, budgeting and execution process to allocate its resources. This process is considered similarly slow. Red tape leads to slow acquisition systems and prevents agility and innovation in adopting new technologies. A reform commission ^[7] was established recently to review the process with a final report due in September 2023. However, there are doubts ^[8] that it will be successful given past experience.

A review of existing processes is not the answer. Defence has already reviewed its capability assessment program and has integrated rapid and fundamental capability assessment cycles into its processes. Yet, the system remains a siloed, top-down hierarchical structure within which acquisition and contracting processes are accompanied by extensive ‘front-end’ force design and investment decision-making protocols to prevent failures and reduce risk. The result can be a compromise not conducive to rapid implementation and innovation.

Rapid acquisition processes have been highly successful in the commercial and public sectors. For instance, NASA faced the same challenges as other government agencies with the costs and lengthy timeframes for the systems required to fulfil its aims. In response, it opened the field to new industry entrants with entirely different business models and design and production concepts, companies like SpaceX. NASA has used public–private partnerships ^[9] to develop commercial services to resupply the International Space Station, launch satellites and conduct crewed space missions, including astronaut rotations on the ISS.

SpaceX was founded in 2002 with a mission of making space activities much more affordable and achievable. The company has continued to focus on reducing costs in all its activities by developing reusable and multi-use components and systems. It has delivered affordable launch systems for small and large satellites using the world’s largest operational space launch rocket, Falcon Heavy.

SpaceX has worked at a tempo that space launch incumbents couldn’t achieve and embraced failure in its development and flight programs that others wouldn’t tolerate. For example, after the company’s Starship SN9 exploded upon landing, principal integration engineer John Insprucker highlighted that the intent of the test was to demonstrate control of the vehicle in its subsonic re-entry.

SpaceX’s Starship program suffered multiple failures ^[10], each costing approximately US$100 million in lost revenue, as prototypes were rapidly developed for testing and intentionally pushed to fail. Last year, it finally achieved a successful launch and landing with SN15. The knowledge and trust the company gained through its failures and rapid implementation were the reasons behind NASA’s US$2.9 billion contract ^[11] with SpaceX to build a lunar lander by 2024.

Success with rapid testing and implementation isn’t limited to Western nations. Over the past few years, China has undergone ^[12] a large review and restructuring of its state-owned enterprises, leading to rapid introduction of advanced variants of military capability such as the H-6 bomber. This has been achieved by making organisational changes and driving an innovation mindset for the military and civilian sectors while also relying on civilian-developed technologies for military use.

Australia’s deteriorating strategic environment means that Defence needs to be ready for irregular warfare in the ‘grey zone’ and be prepared to conduct warfare against asymmetric high-end capabilities. Defence’s well-established processes mean that while it seeks to be ready for high-end warfare by forecasting into the future, it is grossly unprepared for conflict in the grey zone because of the existing processes’ inability to adapt to emerging problems.

Hence, separate rapid contracting and acquisition processes are needed. And they must be supported by a philosophy that tolerates failure and is driven by the need to respond to the deteriorating threat environment. It’s not just about the adoption and implementation of rapid and novel systems but also the effect that such an approach can have in the minds of potential adversaries.