Editorial: Informing the debate | ADM Jun 2010

As part of the ADM role of acting as a communications bridge between Defence and Defence Industry, you can see a new section in the magazine from this edition onwards.

In the News section, you will now find a column from the Defence Materiel Organisation's Acquisition and Sustainment Reform Division that will look at the practical implications of the Strategic Reforms Program (SRP) and how it will affect business.

The most common feedback ADM receives from readers is usually, what do you know?

What can you tell me about this project?

When is the next stage due for approval?

This is an environment where having the most up to date information and intelligence is paramount.

In a recent speech to the C. E. W. Bean Foundation, Defence Minister Senator John Faulkner he spoke of the role of the media in making life uncomfortable, if not difficult, for those in power by asking the hard questions.

"Ladies and gentlemen, neither government ministers nor military officers should expect the heirs to C. E. W. Bean to consider it their job to make us comfortable.

"Their responsibility to hold us to account, to tell the truth, and to expose lies, is an indispensable safeguard of the democratic contract between government and citizen."

But as many of us would know, getting information from Defence can be a difficult proposition.

Questions on timelines, dollars, tenders and negotiations are met with a ‘commercial in confidence' buffer or responses that have little respect for the deadline driven environment of the media.

As you can see from the budget coverage later in the edition, even the numbers can tell a different story to that being told by Defence.

While Defence has undertaken to increase access to people and projects, ADM was concerned about media practices surrounding the competition for new naval helicopters under Air 9000.

All media responses from the contenders prepared for the media are also given to DMO for noting, to make sure that they don't discuss the tender details or directly compare their offerings.

Given these are the details that readers are likely to be seeking, the move seems to be in direct contradiction to the accountability and transparency push from the Minister.

Defence responded to my questions on the issue: it is standard practice under DMO issued RFTs.

But what benefit does the practice provide to informed debate?

AIC: dollars and sense?

Gregor Ferguson | Sydney

The Australian Industry Capability (AIC) program has got off to a gradual, rather than explosive, start.

Its rationale is well understood: Defence, in particular the DMO, doesn't believe the old industrial offsets policy delivered lasting benefits for the local industry.

It was more likely to simply add to the price Australia paid for its defence equipment.

However, local firms cast envious eyes towards countries like Canada whose offsets policy has seen significant volumes of work placed with local contractors by US primes selling helicopters, transport aircraft and fast jets.

While the work may not be ‘noble', it provides essential volume and cash flow and helps sustain industry skills and capabilities through slower times.

Defence's argument is that work won by Australian firms as a result of the AIC program, and particularly work which integrates local small to medium enterprises (SMEs) into the Global Supply Chains of northern hemisphere prime contractors, delivers better and longer-lasting value - it's more likely to be ‘noble' work and provides a more credible platform to pursue future opportunities in export markets.

That's good if it's true, and the next year or so will start to tell us whether Defence's vision for AIC is right or wrong.

Companies such as BAE Systems, Boeing, EADS, Lockheed Martin, Raytheon and Thales should be starting to generate the sort of numbers from their AIC activities which support Defence's argument.

In particular, we should be seeing hard evidence of significant local industry involvement in the Joint Strike Fighter program.

We have to hope the AIC program will turn out to be as successful, in both the quality and quantity of work it generates, as Defence promises.

There are signs of promise, but these have proved illusory in the past.

Where local firms have difficulty is reconciling a DMO which will support Australian SMEs trying to penetrate the Global Supply Chains of overseas primes with a DMO whose industry policy explicitly discriminates in favour of foreign suppliers through the mechanism of Military Off The Shelf (MOTS) purchases.

Defence's growing preference for MOTS purchases is understandable, but does this undermine its case when it tries to support Australian defence exporters?

A matter for discussion, I believe.