{"id":61196,"date":"2020-12-10T06:00:22","date_gmt":"2020-12-09T19:00:22","guid":{"rendered":"https:\/\/www.aspistrategist.ru\/?p=61196"},"modified":"2020-12-09T19:04:12","modified_gmt":"2020-12-09T08:04:12","slug":"external-workers-behind-only-army-as-defences-second-biggest-branch","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/external-workers-behind-only-army-as-defences-second-biggest-branch\/","title":{"rendered":"External workers behind only army as Defence\u2019s second biggest branch"},"content":{"rendered":"
<\/figure>\n

One of the more interesting numbers released by Defence this year was the size of its external workforce, which the department is now measuring through a biannual census. The total number is 28,632<\/a> full-time equivalent workers. If we regard those people as Defence\u2019s fifth \u2018service\u2019, it would easily be its second biggest, just behind the army at 30,000 and well ahead of the public service at 16,000.<\/p>\n

In one sense, the size of this fifth service shouldn\u2019t be surprising as it\u2019s the result of several broad movements affecting Defence over the past three or four decades. The first was the selling off of government-owned defence industries. The second was successive governments\u2019 efforts over the past decade to reduce the number of public servants in Defence. That hit Defence\u2019s Capability Acquisition and Sustainment Group particularly hard as it fell from 6,000 to 3,660 Australian public service staff. And the third is the growing size and complexity of Defence\u2019s acquisition and sustainment programs that require skilled workers to administer and deliver. In short, there is a lot more work and fewer people inside Defence to do it.<\/p>\n

I collated data around this phenomenon in part 2<\/a> of this year\u2019s The cost of defence<\/em>. In this post I\u2019ll look at some of the numbers. In the next, I\u2019ll look at what, if anything, we should do about it.<\/p>\n

The first of three categories<\/a> of external workers are consultants, whom Defence defines as people who \u2018carry out defined research, reviews or evaluations or provide independent advice, information or creative solutions\u2019. Despite stereotypes of Canberra being overrun by overpaid consultants who borrow your watch to tell you the time, they make up less than 1% of Defence\u2019s external workforce.<\/p>\n

The largest category are the 21,000 who deliver services on a long-term basis with \u2018skills or expertise that are not required to be maintained by APS or ADF in Defence\u2019. Think of employees of companies providing base services such as messes and cleaning, performing deeper maintenance on aircraft or staffing IT helpdesks.<\/p>\n

Despite the size of that category, it\u2019s relatively uncontroversial. There\u2019s little appetite in either the government or Defence to bring those functions back inside the department. The Middle East wars of the past two decades have shown that industry can deliver support even on deployed operations. There\u2019ll always be debate about which maintenance functions frontline ADF units need to be able to perform themselves, and there\u2019s still considerable nostalgia for the traditional military mess, but we aren\u2019t going to fundamentally reverse course here.<\/p>\n

The area where there\u2019s a greater need for scrutiny is in the final category: the 6,567 contractors, people \u2018engaged by Defence under a contract for skills that would normally be maintained in the Australian Public Service (APS) or Australian Defence Force (ADF) workforce \u2026 to perform day-to-day duties of Defence\u2019. So those are mainly people working \u2018above the line\u2019<\/a>\u2014that is, working on behalf of the Commonwealth to run projects and activities\u2014as opposed to people working \u2018below the line\u2019 delivering services and products to those projects. The largest subcategory is project management, \u00a0with 2,311 people.<\/p>\n

While those may be skills that are \u2018normally\u2019 maintained in the APS or ADF workforce, Defence doesn\u2019t have the people anymore. So it\u2019s had to find them outside. With its demand for skilled professionals growing and its own workforce unable to meet that demand, in 2018 Defence established a support services panel<\/a> to \u2018provide a more strategically managed<\/a> approach to the engagement and management of above the line services\u2019. The panel consists of four major service providers and was meant to provide \u2018greater visibility and control over market engagement and service delivery\u2019.<\/p>\n

Hopefully it has provided that visibility to Defence, but it hasn\u2019t to the public and parliament. It\u2019s hard to say from the outside how much that skilled on-demand workforce is costing Defence. Last year Defence signed contracts worth $2.17 billion for various kinds of professional services, according to AusTender, which reports Commonwealth contracts valued at over $100,000. But we can\u2019t really tell from AusTender how much of, say, the $662 million in \u2018professional engineering services\u2019 contracts that Defence signed was above or below the line.<\/p>\n

We can see, however, that the four major service providers have certainly received big contracts\u2014like Downer\u2019s $170 million contract described as \u2018Major Service Provider to CASG\u2014Enterprise Support Service Agreement\u2019, which sounds a lot like it\u2019s above the line.<\/p>\n

There are some big numbers there. But does that mean the Commonwealth isn\u2019t getting value from them? By the simple metric of daily rates, it might appear that Defence is overpaying. At first blush, public servants appear to be more affordable. The top of the salary band for a someone at \u2018Executive Level 1\u2019, essentially an experienced professional such as a project manager, cost analyst or engineer who might supervise a small team, is $115,000 per year. If we convert that to a total cost to Defence (including things like sick leave and training) and divide by around 220 days, they are costing Defence around $800 per day. Anecdotally, the daily rate charged by service providers for those skills is much higher, around $1,500\u20132,000, and at times more.<\/p>\n

I\u2019ll look at whether we should be worried about this in my next piece.<\/p>\n","protected":false},"excerpt":{"rendered":"

One of the more interesting numbers released by Defence this year was the size of its external workforce, which the department is now measuring through a biannual census. The total number is 28,632 full-time equivalent …<\/p>\n","protected":false},"author":767,"featured_media":61198,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[661,26,344,136],"class_list":["post-61196","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-defence-projects","tag-defence-spending","tag-public-service","tag-workforce"],"acf":[],"yoast_head":"\nExternal workers behind only army as Defence\u2019s second biggest branch | 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\/external-workers-behind-only-army-as-defences-second-biggest-branch\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"External workers behind only army as Defence\u2019s second biggest branch | The Strategist\" \/>\n<meta property=\"og:description\" content=\"One of the more interesting numbers released by Defence this year was the size of its external workforce, which the department is now measuring through a biannual census. 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