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Appendix B: Consultancies and contracts


Overview

Defence engages consultants where it lacks specialist expertise or when independent research and assessment are required. The process for selecting consultants is consistent with Defence procurement policies and the Commonwealth Procurement Rules.

Consulting contracts

In 2013–14, Defence (including the Defence Materiel Organisation) entered into 487 new consultancy contracts (359 with a value greater than $10,000) involving total actual expenditure of $33.3 million (including GST). In addition, 271 consultancy contracts remained active, involving total actual expenditure of $10.6 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. Table B.1 records total expenditure in-year for consulting contracts rather than the full value of the contract.

Table B.1: Total expenditure on consulting contracts, 2011–12 to 2013–14

 

2011–12
$m

2012–13
$m

2013–14
$m

Defence

61.5

37.8

38.3

DMO

5.1

2.9

5.6

Table B.2: Consultancies let greater than $10,000, by Group, 2013–14

Group

Number of contracts let

Total contract value ($)

Office of the Secretary and CDF

0

0

Vice Chief of the Defence Force Group

1

34,640

Joint Operations Command

2

94,244

Navy

1

142,808

Army

5

1,186,798

Air Force

1

528,730

Capability Development Group

0

0

Chief Finance Officer Group

3

595,500

Chief Information Officer Group

15

2,161,215

Defence Science and Technology Organisation

2

126,170

Defence Support and Reform Group

270

33,412,798

Intelligence and Security Group

15

2,592,375

People Strategies and Policy Group

17

1,770,974

Defence Materiel Organisation

27

9,226,424

Total

359

51,872,676

Contracts exempt from the AusTender

In 2013–14, Defence (including the DMO) reported a total of 173 contracts, standing offers or variations, with a total value of $273.7 million, which were subject to an exemption under the Freedom of Information Act 1982. These exemptions were generally applied under the national security provisions of the Act.

Australian National Audit Office access clauses

The Defence contracting templates include standard clauses providing for Auditor-General access to contractors’ and major subcontractors’ premises, records and accounts. Defence has identified the following contracts that were exempt from the requirement to provide Auditor-General access, totalling just over $1.9 billion.

Defence utilises 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 for Foreign Military Sales do not contain ANAO access provisions.

Table B.3: Contracts that do not include the ANAO access clause

Group and company

2013–14 ($)

Purpose

Navy

Egeria Pty Ltd

201,200

Program and project management services in support of Navy information management[1]

Egeria Pty Ltd

111,273

Information management objective and Navy management diary training[1]

Egeria Pty Ltd

116,800

Information Management Services Group drive management[1]

Institution of Engineers Australia

200,088

Memberships[1]

United Kingdom Hydrographic Office

295,694

Navigation charts[2]

Randstad Pty Limited

108,180

Business process analyst[1]

Aquila Marine

164,455

Inflatable sailing boats[1]

Mr Paul Rizzo

156,141

Chair, Rizzo Reform Implementation Committee[1]

Total for the Navy

1,353,831

 

Army

Abco Water Systems

182,985

Hire—wastewater treatment plant[3,4]

United States Department of Defense

13,386,840

Provision of training by the US Army[5]

Myriad Technologies Pty Ltd

603,493

Specialist engineering support[3,4]

BAE Systems Australia Limited

169,403

Provision of services to deliver gateway[3,4]

Cistech Solutions

824,800

Core networking[3,4]

G.H. Varley Pty Ltd

3,224,685

Mounted SATCOM terminal[3,4]

M5 Networks Australia Pty Ltd

3,248,896

Research and development[3,4]

MRB Communications Pty Ltd

281,728

Radios and equipment[3,4]

Myriad Technologies Pty Ltd

406,588

Specialist engineering support[3,4]

Myriad Technologies Pty Ltd

840,864

Specialist engineering[3,4]

Saab Systems Pty Ltd

471,167

Software support services[3,4]

Elbit Systems of Australia Pty Ltd

9,250,000

Training[3,4]

Calytrix Technologies Pty Ltd

990,000

Radio desk-top training system[3,4]

Georgiou Group Pty Ltd

452,985

Construction services[3,4]

Adelaide Metal Fabrication Pty LTd

122,452

Construction of metal cubes[3,4]

Rentokil Pest Control (Qld) Pty Ltd

200,741

Bird-proofing[3,4]

Weymouth Sporting Solutions

125,300

Anti-gravity running machine warranty[3,4]

Madang Resort and Kalibobo Village

318,690

Accommodation[3,4]

Boeing Information Space and Defence

395,975

Specialist maintenance training[3,4]

GATR Technologies Inc.

299,746

Equipment[3,4]

Total for the Army

35,797,338

 

Vice Chief of the Defence Force Group

Georgiou Group Pty Ltd

1,483,250

Construction of health facilities[1]

Georgiou Group Pty Ltd

347,336

Construction of health facilities[1]

Australian Centre for Posttraumatic Mental Health

262,735

Mental health screening[6]

Oakton Services Pty Ltd

714,428

Project support and reporting[7]

Total for the Vice Chief of the Defence Force Group

2,807,749

 

Defence Materiel Organisation

Foreign Military Sale

112,803

Technical support services

Foreign Military Sale

154,939

Component improvement program

Foreign Military Sale

205,600

Supply and support of climate prediction software

Foreign Military Sale

219,356

Cryptographic computers

Foreign Military Sale

264,158

Foreign Liaison Office USAF office administration

Foreign Military Sale

441,669

Foreign Liaison Officer support

Foreign Military Sale

518,617

Explosive ordnance

Foreign Military Sale

607,054

Torpedo repairs

Foreign Military Sale

685,635

Explosive ordnance

Foreign Military Sale

802,292

MOVER software

Foreign Military Sale

910,885

Testing radar warning receiver

Foreign Military Sale

949,490

Procurement of various munitions for MH-60R Seahawk

Foreign Military Sale

993,778

Explosive ordnance

Foreign Military Sale

1,071,175

Specialist system training

Foreign Military Sale

1,400,094

Training missiles

Foreign Military Sale

1,899,413

Procurement of high-grade crypto equipment

Foreign Military Sale

2,019,515

Explosive ordnance

Foreign Military Sale

2,190,951

Follow-on support for AIM-9M Sidewinder

Foreign Military Sale

2,233,640

Aircraft support equipment

Foreign Military Sale

2,688,095

Electronic equipment

Foreign Military Sale

3,479,626

Repairable items and ground support equipment

Foreign Military Sale

3,993,022

Aircraft components, parts and accessories

Foreign Military Sale

4,331,018

Procurement of cryptographic equipment

Foreign Military Sale

10,162,257

Follow-on support case

Foreign Military Sale

10,442,267

In-service support services

Foreign Military Sale

14,671,796

Equipment and support for Standard Missile-2 for Guided Missile Test Set modifications

Foreign Military Sale

15,635,480

Aircraft spares and components

Foreign Military Sale

16,752,300

Missile support

Foreign Military Sale

16,778,784

Spares and support equipment

Foreign Military Sale

20,149,920

RAN fleet sustainment

Foreign Military Sale

22,358,800

Technical support services

Foreign Military Sale

26,120,125

Aircraft software system configuration set

Foreign Military Sale

27,342,290

Inventory

Foreign Military Sale

29,349,438

Explosive ordnance

Foreign Military Sale

53,221,133

Large aircraft infrared countermeasure system

Foreign Military Sale

64,130,598

Torpedoes

Foreign Military Sale

1,519,162,839

Aircraft and support

Total for Defence Materiel Organisation

1,878,450,852

 

Total for Defence

1,918,409,770

 

Notes

  1. Contract template did not provide for access specific to audit purposes and was not manually adjusted.
  2. Purchase of goods under MOU with an overseas agency that does not contain an ANAO access clause.
  3. The statement, relating to templates, at the top of this disclosure only applies to the long-form contracts.
  4. Purpose extracted from AusTender description.
  5. Vendor controlled contract.
  6. DVA Standing Offer panel deed did not include access provision and was not manually adjusted.
  7. ASDEFCON contract template did not provide for access specific to audit purposes and was not manually adjusted.

Advertising and market research

During 2013–14, Universal McCann Australia conducted the following advertising campaigns: Planning and placement of campaign advertising for Defence Force recruiting including dissemination and other fees; International Fleet Review; and Naval Heritage Collection. Further information on the advertising campaigns is available at www.defence.gov.au/Publications and in the reports on Australian Government advertising prepared by the Department of Finance. Those reports are available at www.finance.gov.au/advertising/index.html.

Table B.4: Total advertising and market research expenditure, by type of agency

Type 

2011–12 ($)

2012–13 ($)

2013–14 ($)

Advertising

15,471,366

11,229,656

12,436,522

Market research

1,196,990

1,260,844

2,189,402

Polling

Direct mail

11,754

22,633

Media advertising

26,491,700

21,907,228

46,929,604

Total

43,160,056

34,409,482

61,578,161

Table B.5: Total advertising and market research expenditure, by Group

Group

2011–12 ($)

2012–13 ($)

2013–14 ($)

Office of the Secretary and CDF

39,011

40,334

33,443

Navy

78,372

81,836

738,163[1]

Army

65,411

40,969

70,044

Air Force

174,617

147,617

265,158

Intelligence and Security Group

778,748

92,640

39,185

Chief Operating Officer

80,626

108,806

Defence Support and Reform Group

1,222,359

458,333

128,467

Chief Information Officer Group

373,904

315,766

323,995

Defence People Group

38,827,678

32,933,303

59,606,036[2]

Defence Science and Technology Organisation

62,618

25,985

23,068

Vice Chief of the Defence Force Group

917,068

228,675

204,036

Joint Operations Command

Capability Development Group

22,251

Chief Finance Officer Group

40,444

728[3]

Defence Materiel Organisation

476,949

44,024

37,759

Total

43,160,056

34,409,482

61,578,161

Notes

  1. Expenditure increased significantly in 2013–14 due to the International Fleet Review.
  2. The change in expenditure in 2013–14 compared to 2011–12 and 2012–13 is primarily due to increased media advertising to enable Defence Force Recruiting to better compete in the Australian recruiting marketplace. The increased expenditure was funded by Defence internally.
  3. The amount relates to recruitment advertising and was erroneously omitted in the Defence Annual Report 2012–13.

Details of the organisations paid are provided only for payments of more than $12,400 (including GST).

Table B.6: Total advertising and market research expenditure by Group

Group, type and company

2013–14 ($)

Purpose

Navy

Advertising

Spatchurst Design Associates

13,710

Advertising on banners and panels—Naval Heritage Collection

Media advertising

Universal McCann Australia

663,901

Media advertising for International Fleet Review campaign and Naval Heritage Collection

George Patterson Y&R

33,869

Media advertising for International Fleet Review campaign

Air Force

Advertising

Adcorp Australia Pty Ltd

103,841

Centenary of Military Aviation advertising

Adcorp Australia Pty Ltd

45,968

Recruitment advertising

Media advertising

Last Minute Multimedia Pty Ltd

17,394

Royal Australian Air Force Museum advertising

Intelligence and Security

Advertising

Adcorp Australia Pty Ltd

18,861

Recruitment advertising

Chief Operating Officer

Advertising

Adcorp Australia Pty Ltd

108,806

Support to the operation of the Honours and Awards Tribunal through advertisement of matters to be considered and recruitment of the Chair and Tribunal members

Defence Support and Reform Group

Media advertising

Adcorp Australia Pty Ltd

12,737

Range safety warning public notices

Chief Information Officer

Advertising

Sensis Pty Ltd

322,081

Defence directory listing in White Pages

Defence People

Advertising

George Patterson Y&R

4,576,916

ADF recruitment advertising

Young & Rubicom Brands

2,999,709

ADF recruitment advertising

Havas Worldwide Australia Pty Ltd

1,765,519

ADF recruitment advertising

Australian Public Service Commission

89,063

APS recruitment

Market research

GfK Australia Pty Ltd

665,353

Qualitative and quantitative research to maximise ADF recruitment targets

Open Mind/Hall & Partners

773,305

Qualitative and quantitative research to maximise ADF recruitment targets

Horizon Research

582,569

Qualitative and quantitative research to maximise ADF recruitment targets

Media advertising

Universal McCann Australia

38,444,900

Planning and placement of campaign advertising including dissemination and other fees

Adcorp Australia Pty Ltd

7,522,105

Planning and placement of non-campaign advertising

Defence Science and Technology Organisation

Advertising

Adcorp Australia Pty Ltd

14,141

Capability and Technology Demonstrator Program

Vice Chief of the Defence Force Group

Advertising

Adcorp Australia Pty Ltd

20,518

Non-campaign ad placement (Live Firing Range Notices)

Adcorp Australia Pty Ltd

15,344

Recruitment advertising (civilian)

Market research

Newspoll

54,225

Employer research to measure the level of awareness among employers of Reserves and Reserve Service

Newspoll

99,100

Reserve research on attitude of Reservists and their employers

University of Melbourne

14,850

Market research for the development of the Australian Defence Force Cadets Youth Development Framework

Defence Materiel Organisation

Advertising

Adcorp Australia Pty Ltd

16,132

Promote conferences

Adcorp Australia Pty Ltd

14,224

Recruitment advertising

Legal expenses—Defence

Expenditure on internal and external legal services in 2013–14 is shown in tables B.7 to B.9. Internal expenses include salaries for military and civilian staff, divisional operating costs and military justice reimbursements. External expenses are professional fees, disbursements and legal assistance at Commonwealth expense. All figures are GST inclusive.

Table B.7: Estimated expenditure on internal and external legal services, 2012–13 and 2013–14

Type of legal expenditure

2012–13

$m

2013–14

$m

Internal

41.3

41.8

External

22.2

21.3

Total

63.5

63.1

Table B.8: Estimated cost breakdown of internal legal expenses, 2012–13 and 2013–14

Items

2012–13

$m

2013–14

$m

Salaries for military lawyers

16.3

18.5

Salaries for APS staff

13.8

13.3

ADF Reserve legal officers

7.6

6.8

Operating costs of the division

3.3

2.9

Military justice disbursements

0.3

0.3

Total

41.3

41.8

Table B.9: Estimated cost breakdown of external legal expenses, 2012–13 and 2013–14

Items

2012–13

$m

2013–14

$m

Professional fees—Defence legal panel

20.3

19.7

Disbursements

1.6

1.6

Legal assistance at Commonwealth expense

0.3

0.0

Total

22.2

21.3

Legal expenses—Defence Materiel Organisation

DMO expenditure on internal and external legal services is shown in tables B.10 to B.12. 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.

Table B.10: Estimated expenditure on internal and external legal services, 2012–13 and 2013–14

Type of legal expenditure

2012–13

$m

2013–14

$m

Internal

3.5

3.1

External

11.7

11.0

Total

15.2

14.1

Table B.11: Estimated cost breakdown of internal legal expenses, 2012–13 and 2013–14

Items

2012–13

$m

2013–14

$m

Salaried legal staff costs

3.2

3.0

Operating costs attributable to legal services

0.3

0.2

Total

3.5

3.2

Table B.12: Expenditure external legal services, 2012–13 and 2013–14

Items

2012–13

$m

2013–14

$m

Professional fees—Defence legal panel

12.9

11.0

Professional fees—Attorney-General’s Department

Legal expenditure—other

1.0

Payments pursuant to licence arrangements with collecting societies

Total

13.9

11.0