In continuing with my editorial practice for the year of
commenting on how our themes relate to the upcoming White Paper, I find myself in
two minds. On the one hand, the Top 40 Defence Contractors and Top 20 SMEs
survey demonstrates the width and breadth that Australian industry has to
offer. The minimum cut off for turnover has increased yet again, there are both
new and old entrants making an appearance and the number of locally-owned SMEs
seems to be on the rise.
A range of programs has reached impressive millstones this year.
For the RAAF, both Wedgetail and MRTT have been accepted at various levels. The
Army has seen the last upgraded M113 handed over and a range of Force Protection
measures for Afghanistan (Giraffe C-RAM plus better armour and uniforms) have
come into play. And the Navy has weathered its share of heartache on
sustainment for the amphibious and Collins fleets to come out the other end a
stronger organisation for their battles.
On the other hand, there have been closures of some very well
known SMEs in 2012. Amidst a restrained budgetary environment in the wake of
some of the largest defence cuts on record, there have been good businesses go
the wall where valuable skills have been lost.
Once again, government released a flurry of important
announcements as this edition was being finalised. From an update to the
Projects of Concern list and how each domain is faring capability wise to a
response to the scathing Coles review on submarine maintenance and more
contract announcements, there were dozens of announcements coming out of the various
ministers offices before Christmas. The clearing of the 2012 decks was palpable.
But what does that mean for 2013? With a new White Paper and
Defence Industry Policy Statement in the offing alongside a federal election, 2013
might be a year of standstill. Industry has already highlighted the slow pace
of approvals and descoping of programs seen in 2012 and to have this further
slow would risk jobs and capability delivery schedules.
The Priority Industry Capability (PIC) health check framework
seeks to maintain sovereign skills in key areas. Yet one of the most eagerly awaited
health checks in Electronic Warfare (EW) proved less than satisfactory in many ways.
For what must have been months of work inside the DMO, the scant four-page
document makes only two recommendations:
“Providing Australian-based companies with proven EW
expertise with preferential access to Defence’s existing range of industry
assistance programs, especially those relating to industry innovation. This
preference will normally exceed program assistance afforded to other PICs.” And “Exploring the option of
establishing a Masters level university course in EW within Australia, designed
to assist in skilling people from both industry and Defence.”
Surprisingly, “In the light of recent and expected changes in
Defence requirements, the health check found the industry aspects of the PIC to
be reasonably healthy. The check considered that while DSTO and JEWOSU face a
number of resource challenges, the current and expected capabilities within
both areas of Defence are consistent with a healthy PIC.”
This view is in stark contrast to that expressed by BAE Systems
Australia CEO David Allott in our From
the Source interview this month. He sees the sector
reaching a tipping point within months if action is not taken. The policy
recommendations from the health check fall far below what is needed, according
to industry sources. Indeed the health check seems to brush over the key
challenge – the lack of ongoing interesting work for a skilled workforce.
The adage of practice makes perfect was never more apt than it
is in the Defence industry. The principle of use it or lose it seems to have disappeared
from the debate all together. Then again, when it comes to a healthy debate
about defence and security issues in the public arena, the subject only rates a
mention when defence or industry gets it wrong, usually with large sums of
taxpayer money. There are many good things happening in both realms of the
Defence community, even programs that are on time and under budget, but these
are rarely heard of outside our relatively small neighbourhood.
For 2013 I would like to see a number of things happen:
• A year free from reviews – implement what has been done under the plethora of reviews done over the past few years and see how measures bed down. Change takes time in such a large organisation.
• Certainty of schedule – a vague DCP band is not any way to run a business let alone a government.
• Bipartisan support for complex programs – it was heartening to hear support from both sides of the house at the Submarine Institute of Australia conference on the Future Submarine. There were excellent political speeches there that need to be heard by more than just the choir. Land 400 and the New Air Combat Capability programs, to name but two programs, would also benefit from such support.
• Above all, some positivity about what can be done when we all work towards a common goal would be great.