{"id":14884,"date":"2014-07-24T12:30:00","date_gmt":"2014-07-24T02:30:00","guid":{"rendered":"http:\/\/www.aspistrategist.ru\/?p=14884"},"modified":"2014-07-25T13:53:52","modified_gmt":"2014-07-25T03:53:52","slug":"wanted-a-defenceindustry-decision-framework","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/wanted-a-defenceindustry-decision-framework\/","title":{"rendered":"Wanted: a defence\/industry decision framework"},"content":{"rendered":"

Recent decisions by the Department of Defence have highlighted weaknesses and inconsistencies in the decision-making associated with defence procurements. The decision to go to restricted tender for the RAN\u2019s two auxiliary ships to replace Success<\/i> and Sirius<\/i> is the subject of a Senate Inquiry, and the Rossi Boots decision has attracted considerable criticism in both parliament and the media.<\/p>\n

Defence industry has, quite rightly, been a major consideration on this site in the recent past. John Harvey has postulated on \u2018A simple Defence Acquisition\/Industry Policy framework<\/a>\u2019, Mark Thomson has discussed \u2018Defence projects, jobs and economic growth<\/a>\u2019 and I have advanced a conceptual framework for a sensible defence industry policy<\/a>.<\/p>\n

Those posts, and others, have one overriding thing in common: they all want to see the best national outcome for the money that the Government devotes to defence.<\/p>\n

The difficulty lies in the discrepancy between what\u2019s commonly promoted by those outside Defence, and what\u2019s decided by those inside Defence. That discrepancy represents a failure of government (indeed, governments of all persuasions\u2014not just the current one) to articulate an overarching decision framework to guide procurement. Projects decisions are made solely on a case-by-case basis, seemingly with no consideration of the impact on industry, and reflect what Chris Jenkins at Thales has described as a \u2018series of random outcomes\u2019.<\/p>\n

The development and implementation of a transparent framework within which procurement decisions are made would seem to be warranted; and would provide logic and robustness for the application of tailored programs aimed at defence industry. Treating Industry as a capability as I have previously advanced seems to be (at least part of) the solution.<\/p>\n

Defence acquisition decisions typically promote the outcomes as representing best value for money, and in accordance with the Commonwealth Procurement Rules (CPRs). That\u2019s all well and good, but the CPRs are not restrictive, and do allow for factors other than the cheapest price to be considered. Those factors should include (1) the mitigation of strategic risk through the development of an industrial base that we need to have, (2) the associated development of skills and expertise for the sustainment of that industrial base, and (3) the economic benefits of doing the work in-country through increased employment, return to the Government through taxation, increased innovation and generation of intellectual property, and potential export.<\/p>\n

It would appear that those making the decisions are not inclined, or not able, to consider the wider implications of their decisions. Treating industry as a fundamental input to capability would force those broader considerations.<\/p>\n

Analysis of DMO contracts (from Austender) placed between July 2007 and June 2014 shows that since the placement of the Air Warfare Destroyer contracts in 2007\/08 the value of acquisition contracts awarded locally has plummeted, and now more acquisition is contracted from outside Australia than within it. The graph below (click to enlarge) depicts only acquisition contracts (and not sustainment or other contracts). It shows that in the four financial years from 2009\/10 to 2012\/13 only 10% of DMO contracts were placed with companies operating within Australia for the acquisition of capability. The figure for Australian-owned companies is significantly (woefully) lower\u2014and remember you can\u2019t have cash flow if you don\u2019t have a contract.<\/p>\n

\"graph<\/a><\/figure>\n

The development of the 2015 Defence White Paper and the Defence Industry Policy Statement represent an opportunity to start to get the industry bit of defence in order. A similar opportunity will not come again for a few years. It\u2019s imperative that those documents describe a framework that will guide the development of the industrial base that we need to have\u2014to minimise strategic risk, to maintain and develop critical skills, and to provide national economic benefits\u2014and not merely continue the current approach of \u2018any road is good enough\u2019.<\/p>\n

Graeme Dunk is manager of Australian Business Defence Industry, a national defence industry association.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Recent decisions by the Department of Defence have highlighted weaknesses and inconsistencies in the decision-making associated with defence procurements. The decision to go to restricted tender for the RAN\u2019s two auxiliary ships to replace Success …<\/p>\n","protected":false},"author":239,"featured_media":14885,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-14884","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general"],"acf":[],"yoast_head":"\nWanted: a defence\/industry decision framework | The Strategist<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.aspistrategist.ru\/wanted-a-defenceindustry-decision-framework\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Wanted: a defence\/industry decision framework | The Strategist\" \/>\n<meta property=\"og:description\" content=\"Recent decisions by the Department of Defence have highlighted weaknesses and inconsistencies in the decision-making associated with defence procurements. The decision to go to restricted tender for the RAN\u2019s two auxiliary ships to replace Success ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.aspistrategist.ru\/wanted-a-defenceindustry-decision-framework\/\" \/>\n<meta property=\"og:site_name\" content=\"The Strategist\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/ASPI.org\" \/>\n<meta property=\"article:published_time\" content=\"2014-07-24T02:30:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2014-07-25T03:53:52+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.aspistrategist.ru\/wp-content\/uploads\/2014\/07\/graph-dunk.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1504\" \/>\n\t<meta property=\"og:image:height\" content=\"603\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Graeme Dunk\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@ASPI_org\" \/>\n<meta name=\"twitter:site\" content=\"@ASPI_org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Graeme Dunk\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.aspistrategist.ru\/#website\",\"url\":\"https:\/\/www.aspistrategist.ru\/\",\"name\":\"The Strategist\",\"description\":\"ASPI's analysis and commentary site\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.aspistrategist.ru\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-AU\"},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-AU\",\"@id\":\"https:\/\/www.aspistrategist.ru\/wanted-a-defenceindustry-decision-framework\/#primaryimage\",\"url\":\"https:\/\/www.aspistrategist.ru\/wp-content\/uploads\/2014\/07\/graph-dunk.png\",\"contentUrl\":\"https:\/\/www.aspistrategist.ru\/wp-content\/uploads\/2014\/07\/graph-dunk.png\",\"width\":1504,\"height\":603},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.aspistrategist.ru\/wanted-a-defenceindustry-decision-framework\/\",\"url\":\"https:\/\/www.aspistrategist.ru\/wanted-a-defenceindustry-decision-framework\/\",\"name\":\"Wanted: a defence\/industry decision framework | The Strategist\",\"isPartOf\":{\"@id\":\"https:\/\/www.aspistrategist.ru\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.aspistrategist.ru\/wanted-a-defenceindustry-decision-framework\/#primaryimage\"},\"datePublished\":\"2014-07-24T02:30:00+00:00\",\"dateModified\":\"2014-07-25T03:53:52+00:00\",\"author\":{\"@id\":\"https:\/\/www.aspistrategist.ru\/#\/schema\/person\/8c3d02d9201608da417178ebdfec6d5f\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.aspistrategist.ru\/wanted-a-defenceindustry-decision-framework\/#breadcrumb\"},\"inLanguage\":\"en-AU\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.aspistrategist.ru\/wanted-a-defenceindustry-decision-framework\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.aspistrategist.ru\/wanted-a-defenceindustry-decision-framework\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.aspistrategist.ru\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Wanted: a defence\/industry decision framework\"}]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.aspistrategist.ru\/#\/schema\/person\/8c3d02d9201608da417178ebdfec6d5f\",\"name\":\"Graeme Dunk\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-AU\",\"@id\":\"https:\/\/www.aspistrategist.ru\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/9d610dcf98bddd9d228242077fa5be69?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/9d610dcf98bddd9d228242077fa5be69?s=96&d=mm&r=g\",\"caption\":\"Graeme Dunk\"},\"url\":\"https:\/\/www.aspistrategist.ru\/author\/graeme-dunk\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Wanted: a defence\/industry decision framework | The Strategist","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.aspistrategist.ru\/wanted-a-defenceindustry-decision-framework\/","og_locale":"en_US","og_type":"article","og_title":"Wanted: a defence\/industry decision framework | The Strategist","og_description":"Recent decisions by the Department of Defence have highlighted weaknesses and inconsistencies in the decision-making associated with defence procurements. 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