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Appendixes


Appendix A: Consultancies and contracts

Consulting contracts

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 procurement policies and the Commonwealth Procurement Rules.

In 2016–17, Defence entered into 950 new consultancy contracts (714 with a value greater than $10,000) involving total actual expenditure of $49.9 million (including GST). In addition, 873 consultancy contracts were active during the reporting year, involving total actual expenditure of $204.6 million (including GST).

This annual report contains information about actual expenditure on contracts for consultancies. Information on the value of individual contracts and consultancies is available on the AusTender website, www.tenders.gov.au.

Table A.1 shows a summary, sorted by Defence program, of new consultancy contracts entered into during 2016–17 with a contract value greater than $10,000 (including GST).

Table A.1: New consultancy contracts entered into (value greater than $10,000), by program, 2016–17

Program
Number of new
contracts
Total contract
value ($)
Program 1.1 Strategic Policy and Intelligence
116
30,224,096
Program 1.2 Navy Capabilities
46
5,893,421
Program 1.3 Army Capabilities
15
3,404,095
Program 1.4 Air Force Capabilities
12
9,824,043
Program 1.5 Joint Operations Command
Program 1.6 Vice Chief of the Defence Force
40
9,911,000
Program 1.7 Capability Acquisition and Sustainment
29
34,389,300
Program 1.8 Defence Executive Support
300
37,591,636
Program 1.9 Estate and Infrastructure
71
7,958,573
Program 1.10 Chief Information Officer
6
714,695
Program 1.11 Defence People
39
4,816,463
Program 1.12 Defence Science and Technology
40
8,531,361
Program 1.13 Chief Finance Officer
Total
714
153,258,683

Table A.2 records total expenditure in-year for consulting contracts rather than the full value of the contract.

Table A.2: Total expenditure on consulting contracts, 2014–15 to 2016–17

2014–15 ($m)
2015–16 ($m)
2016–17 ($m)
Defence
71.3
90.7
254.5
Defence Materiel Organisation1
10.3

Note: Figures are GST inclusive.

  1. From 1 July 2015, the Defence Materiel Organisation was incorporated into the Department of Defence. It is no longer a separate listed entity.

Australian National Audit Office access clause

The Defence contracting templates include standard clauses providing for the Auditor-General access to contractors’ and major subcontractors’ premises, records and accounts. During 2016–17, Defence had 37 contracts that were exempt from the requirement to provide access to the Auditor-General (Table A.3).

Table A.3: Contracts that do not include the ANAO access clause, 2016–17

Service/Group and contractor1
Value ($)
Purpose of contract Reason for non-inclusion of ANAO access clause
Army
ICE Demolitions & Asbestos Removal Pty Ltd
239,292
Building demolition Omission
Portion Pack Foods Pty Ltd
1,292,775
Supply of ration packs to Australian Army Cadets Omission
The Stanley Hotel and Suites
449,765
Provision of overseas accommodation Vendor-controlled contract
General Dynamics Mission System
115,314
Secure communications Vendor-controlled contract
National Test Pilot School
1,235,216
Rotary wing test pilot Vendor-controlled contract
National Test Pilot School
643,889
Rotary wing test pilot Vendor-controlled contract
Foreign Military Sales contract
32,798,948
Provision of training through United States Government Vendor-controlled contract
US Treasury, New York
159,299
Acquisition and cross-servicing agreement Vendor-controlled contract
US Department of Defense
1,496,585
Sustainment Memorandum of understanding
US Department of Defense
333,759
Sustainment Memorandum of understanding
Harvard University
107,339
Training Vendor-controlled contract
Total for the Army
38,872,180
Capability Acquisition and Sustainment Group
Foreign Military Sales contract
3,129,158
Light weapons and ammunition Vendor-controlled contract
Foreign Military Sales contract
935,113
Light weapons and ammunition Vendor-controlled contract
Foreign Military Sales contract
6,601,456
Sustainment services Vendor-controlled contract
Foreign Military Sales contract
1,434,805
Personal protective equipment Vendor-controlled contract
Foreign Military Sales contract
493,780
Engineering design and concept analysis Vendor-controlled contract
Foreign Military Sales contract
278,406
Light weapons and ammunition Vendor-controlled contract
Foreign Military Sales contract
287,348
Light weapons and ammunition Vendor-controlled contract
Foreign Military Sales contract
32,420,182
Light weapons and ammunition Vendor-controlled contract
Foreign Military Sales contract
132,173
Light weapons and ammunition Vendor-controlled contract
Foreign Military Sales contract
629,754
Software maintenance and support Vendor-controlled contract
Foreign Military Sales contract
220,722
Aircraft support Vendor-controlled contract
Foreign Military Sales contract
22,245,119
Acquisition of video data link capability Vendor-controlled contract
Foreign Military Sales contract
610,350,130
Procure special military equipment Vendor-controlled contract
Foreign Military Sales contract
811,333
Inert warheads and fin assemblies Vendor-controlled contract
Foreign Military Sales contract
126,069,548
70 radio frequency Vendor-controlled contract
Foreign Military Sales contract
2,995,557
Light weapons and ammunition Vendor-controlled contract
Foreign Military Sales contract
186,647,365
Acquisition of specialist military equipment Vendor-controlled contract
Foreign Military Sales contract
24,756,411
Professional engineering services Vendor-controlled contract
Foreign Military Sales contract
13,025,069
Anti-radiation missile support Vendor-controlled contract
Foreign Military Sales contract
1,800,443
Sustainment support Vendor-controlled contract
Foreign Military Sales contract
5,268,000
Technical and engineering support Vendor-controlled contract
Foreign Military Sales contract
9,315,163
Support for explosive ordnance Vendor-controlled contract
Foreign Military Sales contract
3,305,995
Technical assistance Vendor-controlled contract
Foreign Military Sales contract
65,677,000
Spares and repairs Vendor-controlled contract
Foreign Military Sales contract
1,282,815
Crypto equipment Vendor-controlled contract
Foreign Military Sales contract
98,595,561
Wideband satellite communications Vendor-controlled contract
Total for Capability Acquisition and Sustainment Group
1,218,708,405

Note: Figures are GST inclusive.

  1. Defence uses the United States Department of Defense’s Foreign Military Sales program, which facilitates sales of US arms, defence equipment, defence services and military training to foreign governments. The standard terms and conditions of Foreign Military Sales contracts do not contain ANAO access provisions.

Appendix B: Supplementary online material

Supplementary performance information for 2016–17 is available on the Defence website, as listed below. All supplementary information can be found at www.defence.gov.au/annualreports/16-17 unless otherwise indicated.

Reports
Inspector-General of the Australian Defence Force Annual Report 2016–17 (available at www.defence.gov.au/mjs/reports.asp)
Women in the ADF Report 2016–17 (available from December 2017)
Sexual Misconduct Prevention and Response Office Supplementary Report 2016–17
Acquisition, sustainment, and facilities and infrastructure information
Web Table B.1: Top 30 sustainment products by expenditure, 2016–17
Web Table B.2: Top 30 acquisition projects by expenditure, 2016–17
Web Table B.3: Top 30 acquisition projects by expenditure, variations, 2016–17
Web Table B.4: Current status of previously reported top 30 acquisition projects (projects reported in the last five financial years)
Web Table B.5: Major acquisition projects closed in 2016–17
Web Table B.6: New major acquisition projects approved by Government in 2016–17
Web Table B.7: Top 10 minor acquisition projects, 2016–17
Web Table B.8: Minor acquisition projects closed in 2016–17
Web Table B.9: New minor acquisition projects approved by Government in 2016–17
Web Table B.10: Major capital investment projects approved and announced by Government in 2016–17
Web Table B.11: Approved facilities and infrastructure projects, expenditure by state/territory and federal electorate
Web Table B.12: Performance of capital facilities projects, 2016–17
Web Table B:13: Information on the Status of capital facilities projects for approval by Government and consideration by the Parliamentary Standing Committee on Public Works in 2017–18 is available in the 2017–18 Portfolio Budget Statements pp.149-154.
Web Table B.14: Major Defence establishments and bases

Appendix C: List of requirements

Appendix C contains a list of annual report requirements prepared in accordance with paragraph 17AJ(d) of the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule). Page references in the printed report for Defence’s compliance with these requirements are provided in the right-hand column of Table C.1.

Table C.1: List of requirements

PGPA Rule reference Description Requirement Page number
17AD(g) Letter of transmittal
17AI A copy of the letter of transmittal signed and dated by the accountable authority on date final text approved, with statement that the report has been prepared in accordance with section 46 of the PGPA Act and any enabling legislation that specifies additional requirements in relation to the annual report Mandatory v
17AD(h) Aids to access
17AJ(a) Table of contents Mandatory vii
17AJ(b) Alphabetical index Mandatory 236–243
17AJ(c) Glossary of abbreviations and acronyms Mandatory 233
17AJ(d) List of requirements Mandatory 229–231
17AJ(e) Details of contact officer Mandatory 237
17AJ(f) Entity’s website address Mandatory 237
17AJ(g) Electronic address of report Mandatory 237
17AD(a) Review by accountable authority
17AD(a) A review by the accountable authority of the entity Mandatory 2–4
17AD(b) Overview of the entity
17AE(1)(a)(i) A description of the role and functions of the entity Mandatory 10
17AE(1)(a)(ii) A description of the organisational structure of the entity Mandatory 14
17AE(1)(a)(iii) A description of the outcomes and programs administered by the entity Mandatory 13
17AE(1)(a)(iv) A description of the purposes of the entity as included in the corporate plan Mandatory 22–23
17AE(1)(b) An outline of the structure of the portfolio of the entity Portfolio departments— mandatory 11
17AE(2) Where the outcomes and programs administered by the entity differ from any Portfolio Budget Statements, Portfolio Additional Estimates Statements or other portfolio estimates statement that was prepared for the entity for the period, include details of variation and reasons for change If applicable, mandatory 13
17AD(c) Report on the performance of the entity
Annual performance statements
17AD(c)(i); 16F Annual performance statements in accordance with paragraph 39(1)(b) of the PGPA Act and section 16F of the PGPA Rule Mandatory 22–46
17AD(c)(ii) Report on financial performance
17AF(1)(a) A discussion and analysis of the entity’s financial performance Mandatory 50–57
17AF(1)(b) A table summarising the total resources and total payments of the entity Mandatory 50
17AF(2) If there may be significant changes in the financial results during or after the previous or current reporting period, information on those changes, including the cause of any operating loss of the entity; how the entity has responded to the loss and the actions that have been taken in relation to the loss; and any matter or circumstances that it can reasonably be anticipated will have a significant impact on the entity’s future operation or financial results If applicable, mandatory N/A
17AD(d) Management and accountability
Corporate governance
17AG(2)(a) Information on compliance with section 10 of the PGPA Rule (fraud systems) Mandatory v
17AG(2)(b)(i) A certification by the accountable authority that fraud risk assessments and fraud control plans have been prepared Mandatory v
17AG(2)(b)(ii) A certification by the accountable authority that appropriate mechanisms for preventing, detecting incidents of, investigating or otherwise dealing with, and recording or reporting fraud that meet the specific needs of the entity are in place Mandatory v
17AG(2)(b)(iii) A certification by the accountable authority that all reasonable measures have been taken to deal appropriately with fraud relating to the entity Mandatory v
17AG(2)(c) An outline of structures and processes in place for the entity to implement principles and objectives of corporate governance Mandatory 60–70
17AG(2)(d)–(e) A statement of significant issues reported to the Minister under paragraph If applicable, mandatory 69
  External scrutiny
17AG(3) Information on the most significant developments in external scrutiny and the entity’s response to the scrutiny Mandatory 72–76
17AG(3)(a) Information on judicial decisions and decisions of administrative tribunals and by the Australian Information Commissioner that may have a significant effect on the operations of the entity If applicable, mandatory 75
17AG(3)(b) Information on any reports on operations of the entity by the Auditor-General (other than the report under section 43 of the PGPA Act), a parliamentary committee, or the Commonwealth Ombudsman If applicable, mandatory 76
17AG(3)(c) Information on any capability reviews on the entity that were released during the period If applicable, mandatory 76
  Management of human resources
17AG(4)(a) An assessment of the entity’s effectiveness in managing and developing employees to achieve entity objectives Mandatory 101
17AG(4)(b) Statistics on the entity’s APS employees on an ongoing and non-ongoing basis, with statistics on:
  • staffing classification level
  • full-time employees
  • part-time employees
  • gender
  • staff location
  • employees who identify as Indigenous
Mandatory 86–91, 111–112
17AG(4)(c) Information on any enterprise agreements, individual flexibility arrangements, Australian workplace agreements, common law contracts and determinations under subsection 24(1) of the Public Service Act 1999 Mandatory 99
17AG(4)(c)(i) Information on the number of SES and non-SES employees covered by agreements, etc., identified in paragraph17AG(4)(c) of the PGPA Rule Mandatory 99
17AG(4)(c)(ii) The salary ranges available for APS employees by classification level Mandatory 100
17AG(4)(c)(iii) A description of non-salary benefits provided to employees Mandatory 100  
17AG(4)(d)(i) Information on the number of employees at each classification level who received performance pay If applicable, mandatory 101–102
17AG(4)(d)(ii) Information on aggregate amounts of performance pay at each classification level If applicable, mandatory 101–102
17AG(4)(d)(iii) Information on the average amount of performance payment, and range of such payments, at each classification level If applicable, mandatory 101–102
17AG(4)(d)(iv) Information on the aggregate amount of performance payments If applicable, mandatory 101–102
  Asset management
17AG(5) An assessment of effectiveness of asset management where asset management is a significant part of the entity’s activities If applicable, mandatory 120
  Purchasing
17AG(6) An assessment of entity performance against the Commonwealth Procurement Rules Mandatory 120
  Consultants
17AG(7)(a) A summary statement detailing the number of new contracts engaging consultants entered into during the period; the total actual expenditure on all new consultancy contracts entered into during the period (inclusive of GST); the number of ongoing consultancy contracts that were entered into during a previous reporting period; and the total actual expenditure in the reporting year on the ongoing consultancy contracts (inclusive of GST) Mandatory 226
17AG(7)(b) A statement that ‘During [reporting period], [specified number] new consultancy contracts were entered into involving total actual expenditure of $[specified million]. In addition, [specified number] ongoing consultancy contracts were active during the period, involving total actual expenditure of $[specified million].’ Mandatory 226
17AG(7)(c) A summary of the policies and procedures for selecting and engaging consultants and the main categories of purposes for which consultants were selected and engaged Mandatory 226
17AG(7)(d) A statement that ‘Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.’ Mandatory 226
  Australian National Audit Office access clauses
17AG(8) If an entity entered into a contract with a value of more than $100,000 (inclusive of GST) and the contract did not provide the Auditor-General with access to the contractor’s premises, the report must include the name of the contractor, purpose and value of the contract, and the reason why a clause allowing access was not included in the contract If applicable, mandatory 226–227
  Exempt contracts
17AG(9) If an entity entered into a contract or there is a standing offer with a value greater than $10,000 (inclusive of GST) which has been exempted from being published on AusTender because it would disclose exempt matters under the FOI Act, the annual report must include a statement that the contract or standing offer has been exempted, and the value of the contract or standing offer, to the extent that doing so does not disclose the exempt matters If applicable, mandatory 77
  Small business
17AG(10)(a) A statement that ‘[Name of entity] supports small business participation in the Commonwealth Government procurement market. Small and medium-sized enterprise and small enterprise participation statistics are available on the Department of Finance’s website.’ Mandatory 120
17AG(10)(b) An outline of the ways in which the procurement practices of the entity support small and medium-sized enterprises Mandatory 120–121
17AG(10)(c) If the entity is considered by the department administered by the Finance Minister as material in nature—a statement that ‘[Name of entity] recognises the importance of ensuring that small businesses are paid on time. The results of the survey of Australian Government payments to small business are available on the Treasury’s website.’ If applicable, mandatory 120
  Financial statements
17AD(e) Inclusion of the annual financial statements in accordance with subsection 43(4) of the PGPA Act Mandatory 146–223
17AD(f) Other mandatory information
17AH(1)(a)(i) If the entity conducted advertising campaigns, a statement that ‘During [reporting period], the [name of entity] conducted the following advertising campaigns: [names of advertising campaigns undertaken]. Further information on those advertising campaigns is available at [address of entity’s website] and in the reports on Australian Government advertising prepared by the Department of Finance. Those reports are available on the Department of Finance’s website.’ If applicable, mandatory 139
17AH(1)(a)(ii) If the entity did not conduct advertising campaigns, a statement to that effect If applicable, mandatory N/A
17AH(1)(b) A statement that ‘Information on grants awarded by [name of entity] during [reporting period] is available at [address of entity’s website].’ If applicable, mandatory 138
17AH(1)(c) Outline of mechanisms of disability reporting, including reference to website for further information Mandatory 115
17AH(1)(d) Website reference to where the entity’s Information Publication Scheme statement pursuant to Part II of FOI Act can be found Mandatory 77
17AH(1)(e) Correction of material errors in previous annual report If applicable, mandatory 142
17AH(2) Information required by other legislation Mandatory 92–94, 102–104, 130–132, 139–141