Australian + New Zealand Defence Directory 20/21

AUSTRALIAN + NEW ZEALAND DEFENCE DIRECTORY 2020/21 THE NATION BUILD www. d e f e n c e . d i r e c t o r y 20 DELIVERING SOVEREIGN INDUSTRIAL CAPABILITY PRIORITIES W ell before the COVID-19 pandemic highlighted challenges to supply chains, Defence was already working to ensure access to the most critical industrial capabilities which underpin Australia’s defence preparedness. Defence is committed to achieving the Government’s vision for a robust, resilient and interna- tionally-competitive Australian industrial base, especially in relation to the ten initial sovereign industrial capability priorities (Priorities) announced in the 2018 Defence Industrial Capability Plan. These are the industrial capabilities Australia must have access to, or control over, to help us meet the challenges of the ever-evolving and dynamic security environment. It should come as no surprise the Priorities are considered during the Defence procurement process – after all, Defence has considered industry as a fundamental input to capability since 2016. These days, before a Defence project goes out to tender, an internal assessment deter- mines if the project includes any of the industrial capabilities needed in Australia. Where the Pri- orities apply, tenderers are required to include in their response the steps they will take to build, maintain, or enhance those capabilities locally. The bids are evaluated for their ability to deliver an Australian industrial response and this assessment is considered alongside workforce, costs and schedule as part of the decision-making process. But it’s not enough to apply the Priorities during the tender process. By the tender stage, busi- nesses need to be established and ready to deliver the requirement. To support the development of an industrial base, Defence starts much earlier in the Defence Capability Life Cycle – at the strategic planning stage. This requires a deeper partnership with industry, which needs to be supported by clear guidance from Defence. One way to provide clear guidance for industry on Defence’s expectations is the release of industry and implementation plans for each of the ten Priorities. The plans drill down further into each of the Priorities, to identify critical industrial capabilities and provide industry with the confidence to invest in those capabilities. The plans also include a list of actions for Defence or other government departments to support our industrial base. Many of these actions come directly from the insights provided by Australian businesses during the development of the plans. The first two plans for munitions and small arms and combat clothing were released in December 2019, and the remaining eight plans will be released throughout the year. The plans also include a list of initiatives and programs available to support Australian industry, including the Sovereign Industrial Capability Priority grants program. These capital expenditure grants provide funding to small and medium businesses that contribute to the develop- ment, maintenance or enhancement of one or more of the Priorities. The grants range from $50,000 to $1 million on a co-contribution basis. Since the grants opened in November 2018, 50 small Australian businesses have received grants, valued at more than $24 million. TQCS International (TQCSI) is an example of a recent success story in building Australia’s industrial base through the grants program. TQCSI has just become the first Australian Certification Body to be accredited to the AS 9100 series of international standards that cover the Avia- tion, Space and Defence industries. This accreditation was the direct outcome of a $250,000 grant awarded to TQCSI through the grants program, and means there is now an Australian service enabling the aerospace industry to maintain its operational accreditation, and con- tributing to Australian sovereign industrial capability. Defence is on a journey with Australian industry – growing a partnership that goes beyond the ability to win or award contracts to the heart of keeping our nation secure. This partnership includes working with New Zealand businesses. It includes collaboration in research and de- velopment, cyber security and innovation. It extends to access to skilled, security-vetted personnel, and support to enter the export market. It involves improving the measurement of our defence industry and understanding our supply chain. Individually, these steps alone cannot deliver a robust, resilient and internationally-competitive Australian defence industry, but together they will help us reach our objectives. Stephen Moore Assistant Secretary Defence Industry Branch Department of Defence