skip to navigation skip to content skip to footer

Chapter 10 - Consultancies and contracts

Consultancies

Defence engages consultants where it lacks specialist expertise or when independent research and assessment is required. The process for selecting consultants is consistent with Defence's procurement policies and the Commonwealth Procurement Guidelines. Reasons for engagement include skills currently unavailable, the need for specialised or professional skills and the need for independent research or assessment.

Defence entered into 383 new consultancy contracts (274 with a value greater than $10,000), involving total actual expenditure of $13.9m (including GST). In addition, 265 ongoing consultancy contracts were active, involving total actual expenditure of $26.8m (including GST).

This annual report contains information about actual total expenditure on contracts for consultancies. Information on the value of individual contracts and consultancies is available on the AusTender website.

Table 10.1 - Total expenditure on consulting contracts, 2010-11 to 2012-13
2010-11 2011-12 2012-13
Defence $59.5m $61.5m $37.8m
DMO $0.3m $5.1m $2.9m

Table 10.2 shows a summary by Defence group of 2012-13 consultancies let with a contract value greater than $10,000 (including GST).

Table 10.2 - Consultancies let greater than $10,000 by outcome group, 2012-13

Table 10.2 - Consultancies let greater than $10,000 by outcome group, 2012-13
Outcome group Number of contracts let Total contract value ($)
Office of the Secretary and CDF 8 1,727,013
Navy - -
Army - -
Air Force - -
Intelligence and Security 19 4,083,165
Defence Support and Reform Group 199 19,221,822
Defence Science and Technology Organisation 1 41,721
Chief Information Officer Group 5 714,302
Vice Chief of the Defence Force 7 763,983
Joint Operations Command 2 290,320
Capability Development Group - -
Chief Finance Officer Group 2 986,000
People Strategies and Policy Group 7 889,864
Defence Materiel Organisation 24 2,928,938
Total 274 31,647,128

Legal expenses

Defence

Expenditure on internal and external legal services in 2012-13 is shown in tables 10.3 to 10.5. Internal expenses include salaries for military and civilian staff, divisional operating costs and military justice reimbursements. External expenses are processional fees, disbursements and legal assistance at Commonwealth expense. All figures are GST inclusive.

Table 10.3 - Estimated expenditure on internal and external legal services (Defence), 2011-12 and 2012-13

Table 10.3 - Estimated expenditure on internal and external legal services (Defence), 2011-12 and 2012-13
Type of legal expenditure 2011-12 $m 2012-13 $m
Internal 41.6 41.3
External 36.3 22.2
Total 77.9 63.5

Table 10.4 - Estimated cost breakdown of internal legal expenses (Defence), 2011-12 and 2012-13

Table 10.4 - Estimated cost breakdown of internal legal expenses (Defence), 2011-12 and 2012-13
Items 2011-12 $m 2012-13 $m
Salaries for military lawyers 16.6 16.3
Salaries for civilian staff 13.2 13.8
ADF Reserve legal officers 7.7 7.6
Operating costs 3.4 3.3
Military justice reimbursements 0.7 0.3
Total 41.6 41.3

Table 10.5 - Estimated cost breakdown of external legal expenses (Defence), 2011-12 and 2012-13

Table 10.5 - Estimated cost breakdown of external legal expenses (Defence), 2011-12 and 2012-13
Items 2011-12 $m 2012-13 $m
Professional fees-Defence legal panel 31.9 20.3
Disbursements 4.0 1.6
Legal assistance at Commonwealth expense 0.4 0.3
Total 36.3 22.2

DMO

DMO expenditure on internal and external legal services is shown in tables 10.6 to 10.8. Internal expenditure includes salaries for civilian staff and operating costs that are directly related to the provision of legal services by DMO. External expenditure includes professional fees, disbursements and other legal expenditure, incurred principally through the Strategic Commercial Legal Panel. With the exception of the 2012-13 figures in Table 10.8, all figures are GST exclusive.

Table 10.3 - Estimated expenditure on internal and external legal services (Defence), 2011-12 and 2012-13

Table 10.6 - Estimated expenditure on internal and external legal services (DMO), 2011-12 and 2012-13
Type of legal expenditure 2011-12 $m 2012-13 $m
Internal 2.9 3.5
External 11.5 11.7
Total 14.4 15.2

Table 10.7 - Estimated cost breakdown of internal legal expenses (DMO), 2011-12 and 2012-13

Table 10.7 - Estimated cost breakdown of internal legal expenses (DMO), 2011-12 and 2012-13
Items 2011-12 $m 2012-13 $m
Salaried legal staff costs 2.3 3.2
Operating costs attributable to legal services 0.6 0.3
Total 2.9 3.5

Table 10.8 - Expenditure on external legal services (DMO), 2011-12 and 2012-13

Table 10.8 - Expenditure on external legal services (DMO), 2011-12 and 2012-13
Items 2011-12 $m 2012-13 $m
Professional fees-Defence legal panel 11.5 12.9
Professional fees- Attorney-General's Department - -
Legal expenditure-other - 1
Total 11.5 13.9

Australian National Audit Office Access Clauses

Defence contracting templates include standard clauses providing for access by the Auditor-General to the premises, records and accounts of contractors and major subcontractors. Contracts identified by Defence that do not comply with the requirement to provide access by the Auditor-General are shown in Table 10.9.

Table 10.9 - Contracts that do not include an ANAO access clause

Table 10.9 - Contracts that do not include an ANAO access clause
Amount ($) Purpose Reason for exclusion
Navy
Insitu Pacific Pty Ltd 998,945 Services to RAN Scaneagle (Unmanned Aerial Vehicle) Purchase under legacy contract that does not contain an ANAO access clause (see Note 1).
Engineers Australia 220,000 Memberships The contract does not contain any confidentiality provisions that protect information in the contract or it does not contain any confidentiality provisions that protect information arising from the carrying out of the contract.
L-3 Oceania 550,000 Hydrographic professional services Purchase under legacy standing offer that does not contain an ANAO access clause (see Note 1).
Nessco Pressure Systems 225,521 Pressure test benches The contract does not contain any confidentiality provisions that protect information in the contract or it does not contain any confidentiality provisions that protect information arising from the carrying out of the contract.
Thermo Fisher Scientific 707,236 Calibration equipment The contract does not contain any confidentiality provisions that protect information in the contract or it does not contain any confidentiality provisions that protect information arising from the carrying out of the contract.
United Kingdom Hydrographic Office 196,317 Navigational charts Purchase of goods under memorandum of understanding with overseas agency that does not contain an ANAO access clause.
Vipac Engineers and Scientists 210,235 Shock tests on pipe systems ANAO access clause was not added as a special condition to Defence terms and conditions.
Wollongong Drawing and Office 110,000 90 GSM plotter paper The contract does not contain any confidentiality provisions that protect information in the contract or it does not contain any confidentiality provisions that protect information arising from the carrying out of the contract.
Total for Navy 3,218,254
Army
Foreign Military Sale 2,457,294 Provision of training by the United States Army Foreign Military Sale standard terms and conditions do not contain ANAO access provisions.
Foreign Military Sale 608,900 Provision of training by the United States Navy Foreign Military Sale standard terms and conditions do not contain ANAO access provisions.
Foreign Military Sale 76,770 Provision of training by the United States Air Force Foreign Military Sale standard terms and conditions do not contain ANAO access provisions.
Foreign Military Sale 91,665 Provision of Chinook-related training Foreign Military Sale standard terms and conditions do not contain ANAO access provisions.
Total for Army 3,234,629
Defence Science and Technology Organisation
Frazer-Nash Consultancy Ltd 972,400 Software Access clauses not applicable within the contracting documentation.
Industeel France 249,431 Sample billets of specialist steel plate Access clauses not applicable within the contracting documentation.
Maritime Research Institute Netherlands 259,066 Research agreement Access clauses not applicable within the contracting documentation.
Orbit Logic Inc 108,220 Software Access clauses not applicable within the contracting documentation.
Reed Elsevier Nederland B.V. 252,517 Electronic reference material Access clauses not applicable within the contracting documentation.
SparkTek Ltd 362,000 Project management Trade secret provisions contained within the contracting documentation.
SparkTek Ltd 400,000 Management advisory services Access clauses not applicable within the contracting documentation.
TeleCommunication Systems Inc 462,732 Communication equipment Secrecy provisions contained within the contracting documentation.
Teledyne Instruments Inc 134,226 Unmanned under water vehicle equipment Secrecy provisions contained within the contracting documentation.
Totalförsvarets forskningsinstitut 296,163 Bilateral research project agreement Access clauses not applicable within the contracting documentation.
Ultra Electronics, Precision Air and Land Systems Inc 106,409 Computer power management modules Access clauses not applicable within the contracting documentation.
US Department of Homeland Security 182,682 Research agreement Access clauses not applicable within the contracting documentation.
US Department of Homeland Security 306,840 Research program Access clauses not applicable within the contracting documentation.
Total for Defence Science and Technology Organisation 4,092,686
Vice Chief of Defence Force Group
Construction/JHC Contractor-Georgiou Group Pty Ltd 797,299 Building fit out, Robertson Barracks Contract template did not provide for access specific to audit purposes and was not manually adjusted.
Construction/JHC Contractor-ISIS Group Australia 2,590,382 Medical centre refurbishment, Robertson Barracks Contract template did not provide for access specific to Audit purposes and was not manually adjusted.
BCDS/JLC Contractor Bar Code Data Systems 620,000 Hardware and software support services Clause overlooked for this agreement.
BCDS/JLC Contractor Bar Code Data Systems 567,705 Hardware and software support services Clause overlooked for this agreement.
CDM/JLC Contractor Communication, Design & Management 352,742 Professional support Clause overlooked for this agreement.
Analytics/JLC Contractor Analytics 249,000 Professional support services Clause overlooked for this agreement.
ACMC Contractor Adelaide Research & Innovation Pty Ltd 123,547 Research Current research agreement template wording of clause about access to premises and records does not specifically mention Auditor-General access.
ACMC Contractor Australian National University-Asia Pacific College of Diplomacy 165,000 Research Current research agreement template wording of clause about access to premises and records does not specifically mention Auditor General access.
ACMC Contractor Brookings Institute 333,000 Research Current research agreement template wording of clause about access to premises and records does not specifically mention Auditor-General access.
ACMC Contractor Kings College London 213,498 Research Current research agreement template wording of clause about access to premises and records does not specifically mention Auditor-General access.
ACMC Contractor Oxford Institute of Ethics, Law and Armed Conflict 106,468 Research Current research agreement template wording of clause about access to premises and records does not specifically mention Auditor-General access.
ACMC Contractor Wizard Projects 144,000 Installation of AV equipment Current template wording of clause about access to premises and records does not specifically mention Auditor-General access.
Total for Vice Chief of the Defence Force Group 6,262,640.50
Joint Operations Command
World Wide Language Resources Inc 28,000,000 Interpreter services The contract does not contain any confidentiality provisions that protect information in the contract or it does not contain any confidentiality provisions that protect information arising from the carrying out of the contract.
Mr S Tsegoi 563,321 Lease of House Juba, South Sudan The contract does not contain any confidentiality provisions that protect information in the contract or it does not contain any confidentiality provisions that protect information arising from the carrying out of the contract.
Total for Joint Operations Command 28,563,321
Defence Materiel Organisation Amount Purpose Reason for exclusion
Foreign Military Sale 20,779,200 Non specified parts See Note 2.
Foreign Military Sale 22,433,655 Course correcting fuse See Note 2.
Foreign Military Sale 1,031,070,773 Aircraft modification and associated support systems See Note 2.
Foreign Military Sale 1,268,445 Aircraft spares and repairs See Note 2.
Foreign Military Sale 6,817,561 Aircraft spares and repairs See Note 2.
Foreign Military Sale 940,688 Aircraft spares and repairs See Note 2.
Foreign Military Sale 92,451,100 Blanket parts order See Note 2.
Foreign Military Sale 2,363,890 Explosive ordnance See Note 2.
Foreign Military Sale 3,174,096 Explosive ordnance See Note 2.
Foreign Military Sale 354,711 Explosive ordnance See Note 2.
Foreign Military Sale 2,467,350 Explosive ordnance See Note 2.
Foreign Military Sale 9,091,692 Explosive ordnance See Note 2.
Foreign Military Sale 2,170,913 Explosive ordnance See Note 2.
Foreign Military Sale 2,890,638 Command and control systems support See Note 2.
Foreign Military Sale 904,213 Software training and support See Note 2.
Foreign Military Sale 39,039,999 Aircraft armament training devices See Note 2.
Foreign Military Sale 1,371,427 Administrative support for the Air Force See Note 2.
Foreign Military Sale 2,491,637 Acquisition of mids landing vehicle See Note 2.
Foreign Military Sale 16,319,159 Acquisition of targets See Note 2.
Foreign Military Sale 2,672,166 Mission planning systems See Note 2.
Foreign Military Sale 638,036 MK14 ASM grenade See Note 2.
Foreign Military Sale 400,000 Spares See Note 2.
Foreign Military Sale 16,063,122 Targets See Note 2.
Foreign Military Sale See Note 2.
Foreign Military Sale 651,688 Satellite communication equipment repairs See Note 2.
Foreign Military Sale 1,104,850 Planning for Hobart class See Note 2.
Foreign Military Sale 46,440,861 Chinook Helicopter See Note 2.
Foreign Military Sale 3,753,226 Military communication system maintenance See Note 2.
Foreign Military Sale 411,180 Global position system receiver See Note 2.
Foreign Military Sale 34,157,048 Harpoon missile and support equipment and services See Note 2.
Foreign Military Sale 47,620,999 Harpoon missile spares and services See Note 2.
Foreign Military Sale 854,969 M32 software integration See Note 2.
Foreign Military Sale 11,049,381 MH60R Jacksonville deployment supply See Note 2.
Foreign Military Sale 4,108,503 Spares See Note 2.
Ventyx Pty Ltd (formally Mincom Limited) 28,201 Military integrated logistic information system upgrade to support inventory See Note 3.
Ventyx Pty Ltd (formally Mincom Limited) 100,000 Ventyx support for direct integration See Note 3.
Ventyx Pty Ltd (formally Mincom Limited) 100,000 Ventyx support for e-business training See Note 3.
Ventyx Pty Ltd (formally Mincom Limited) 109,674 Maintenance report See Note 3.
Ventyx Pty Ltd (formally Mincom Limited) 218,119 Services for military integrated logistic information system finance See Note 3.
Ventyx Pty Ltd (formally Mincom Limited) 230,600 Transition of testing capability See Note 3.
Ventyx Pty Ltd (formally Mincom Limited) 414,555 Military integrated logistic information system upgrade to support inventory See Note 3.
Ventyx Pty Ltd (formally Mincom Limited) 515,000 Webview enhancement package See Note 3.
Ventyx Pty Ltd (formally Mincom Limited) 800,000 Military integrated logistic information system upgrade to support inventory See Note 3.
Ventyx Pty Ltd (formally Mincom Limited) 7,958,108 Military integrated logistic information system licensed maintenance support 2012-13 See Note 3.
Sikorsky Aircraft Corporation 4,656,000 Aircraft technical royalty payment See Note 3.
Total for Defence Materiel Organisation 1,443,521,068
TOTAL 1,488,892,598
Notes
  1. From April 2011, the inclusion of standard clauses providing for Auditor-General access to contractors' and major subcontractors' premises, records and accounts that comply with the requirement to provide Auditor-General access has been mandatory for all Defence contracting templates.
  2. Foreign Military Sales standard terms and conditions do not contain ANAO access provisions.
  3. Header contract terms and conditions predated the Senate clause

Contracts exempt from AusTender

In 2012-13, Defence (including the DMO) reported a total of 196 contracts, standing offers or variations thereto, with a total value of $154.1m, which were subject to an exemption under the Freedom of Information Act 1982.

Advertising and market research

Particulars of all amounts relating to advertising and market research paid by, or on behalf of, Defence during 2012-13 are shown in tables 10.10 and 10.11. Details of the persons or organisations paid are provided only for payments of more than $12,100 (including GST) and are shown in Table 10.12.

Table 10.10 - Total advertising and market research expenditure by type of agency, 2010-11 to 2012-13

Table 10.10 - Total advertising and market research expenditure by type of agency, 2010-11 to 2012-13
Type 2010-11 ($) 2011-12 ($) 2012-13 ($)
Advertising 11,712,451 (1) 15,471,365 (2) 11,229,656
Market research 1,054,905 1,196,990 1,260,844
Polling - -
Direct mail - 11,754
Media advertising 23,781,701 26,491,700 21,907,228
TOTAL 36,549,057 43,160,056 34,409,482

Table 10.11 - Total advertising and market research expenditure by group, 2010-11 to 2012-13

Table 10.11 - Total advertising and market research expenditure by group, 2010-11 to 2012-13
2010-11 ($) 2011-12 ($) 2012-13 ($)
Office of the Secretary and CDF 50,092 39,011 40,334
Navy 100,584 78,372 81,836
Army 63,769 65,411 40,969
Air Force 197,373 174,617 147,617
Intelligence and Security Group 330,796 778,748 92,640
Defence Support and Reform Group 1,370,048 1,222,359 458,333
Chief Information Officer Group 326,130 ¹ 373,904 ² 315,766
Defence Science and Technology Organisation 151,634 62,618 25,985
Vice Chief of the Defence Force Group 886,207 917,068 228,675
Joint Operations Command 37,191 - -
Capability Development Group 19,699 22,251 -
Chief Finance Officer Group 10,609 40,444 -
Defence People Group 32,246,988 38,827,678 32,933,303
Defence Materiel Organisation 762,177 476,949 44,024
Chief Operating Officer - 80,626 -
TOTAL 36,553,297 43,160,056 34,409,482
Notes
  1. For 2010-11, $284,756 of expenditure was erroneously omitted from the Chief Information Officer Group entry
  2. For 2011-12, $303,504 of expenditure was erroneously omitted from the Chief Information Officer Group entry

Table 10.12 - Total advertising and market expenditure by group, 2012-13 2012-13

Table 10.12 - Total advertising and market expenditure by group, 2012-13 2012-13
2012-13 ($) Purpose
Office of the Secretary and CDF
Advertising
Adcorp Australia Pty Ltd 20,585 Public consultation for Defence White Paper, Woomera and recruitment
Navy
Advertising
George Patterson Y & R 18,182 Advertising of the International Fleet Review, Sydney, October 2013
Universal McCann 20,110 Advertising for Fleet Air Arm Museum, Nowra
Air Force
Advertising
Adcorp Australia Pty Ltd 20,223 Recruitment advertising
Media advertising
Lastminute Multimedia Pty Ltd 23,286 Royal Australian Air Force Museum advertising
Intelligence and Security Group
Advertising
Adcorp Australia Pty Ltd 92,640 Recruitment advertising-civilian
Defence Support and Reform Group
Advertising
Adcorp Australia Pty Ltd 153,653 Recruitment advertising
Australian Public Service Commission 215,447 General advertising
Australian Public Service Commission 60,057 Recruitment advertising
Wizard People Pty Ltd 29,176 Recruitment advertising
Chief Information Officer
Advertising
Telstra 315,766 Defence directory listing in the Sensis White Pages
Defence Science and Technology Organisation
Advertising
Adcorp Australia Pty Ltd 25,040 Capability and technology demonstrator program Round 18
Vice Chief of the Defence Force
Advertising
Adcorp Australia Pty Ltd 42,962 Non-campaign advertising
Market research
Newspoll 18,075 Market research to measure the awareness of Reservists' employer engagement strategies
Media advertising
Universal McCann 97,018 Reserve and employer support campaign advertisement placements
Adcorp Australia Pty Ltd 61,596 Recruitment Advertising (Civilian)
Defence People Group
Advertising
George Patterson Y&R 5,990,956 Advertising material and retainer fees
Young & Rubicam Brands 4,034,165 Online advertising material including retainer fees
Market research
GfK Australia, Consumer Experiences (formerly GfK Blue Moon Research) 438,097 Qualitative research to maximise ADF recruitment targets
Hall & Partners Open Mind 607,523 Qualitative and quantitative research to maximise ADF recruitment targets
Horizon Research 197,149 Qualitative and quantitative research to maximise ADF recruitment targets
Media advertising
Universal McCann Australia 18,923,827 Advertising placement, including dissemination fees
Adcorp Australia Pty Ltd 2,741,586 Planning and placement of non-campaign advertising for Defence Force Recruitment
Defence Materiel Organisation
Advertising
Adcorp Australia Pty Ltd 17,848 Recruitment advertising
Adcorp Australia Pty Ltd 16,282 General advertising relating to conferences and events