In June, ADM compared the government’s intent to release almost $870 million of estate works to support defence industry through the COVID-19 pandemic against AusTender to find out whether promises made were becoming promises kept.
At the time, only one of the 91 work packages scheduled for release had resulted in a grant.
However, Defence announced this week that it has updated the Estate Works Program Tender Schedule onto the Defence Estate Quality Management System (DEQMS).
“Similar to what has been issued in the past, this schedule will provide a forward look of anticipated Approach to Market for specific projects,” Defence said. “The Estate Works Program outer year budgets are currently being augmented in line with the Department’s response to assist in stimulating the economy.
“The net result of this is an expected increase in projects to be released through the Estate Works Program over the coming years.”
ADM has now cross-checked the updated schedule against AusTender and found that, at the time of writing, 77 packages have been put to market. These are worth between $86 million and $278 million. Yet the number of contracts scheduled for release this calendar quarter has plummeted by 99, representing a dramatic decrease in value of between $166-$400 million on previous forecasts just as Australia enters an economic recession. This is represented by ‘New Q3 2020’ in the chart above.
There have been other notable changes. The Estate Works Program Tender Schedule now forecasts work packages by the calendar quarter instead of by the month, as in the previous iteration. The updated document shows that a further 73 packages are scheduled for release in the next three business quarters, which are worth between $210 million and $503 million.
“In the current environment, Defence strongly recognises the importance of this information to enable Defence Industry to plan and manage their workforce and resources,” Defence said.
ADM Comment: Whilst the available work packages planned for this quarter have dropped significantly, the total shortfall in the forecast over the promised three years amounts to 83 work packages worth a minimum of $89 million. With seven quarters remaining, the update shows there is still time for Defence to achieve the Minister’s promise – even if the pace of work has slowed dramatically when industry arguably needs it most.