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Appendices


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 2017-18, Defence entered into 164 new consultancy contracts, based on information presented on Austender, involving total actual expenditure of $32.2 million (including GST). In addition, 182 existing consultancy contracts were active during the reporting year, with total actual expenditure of $75.8 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 2017-18 (including GST), based on information presented on Austender.

Table A.1: New Consultancy contracts entered into (based on AusTender), by program, 2017-18

Program
Number of new contracts
Total contract value ($)
Program 2.1 Strategic Policy & Intelligence
20
9,927,243
Program 2.2 Defence Executive Support
14
1,350,014
Program 2.3 Chief Finance Officer
Program 2.4 Vice Chief of the Defence Force
17
10,078,379
Program 2.5 Navy Capabilities
2
8,823,577
Program 2.6 Army Capabilities
12
2,009,782
Program 2.7 Air Force Capabilities
16
4,484,031
Program 2.8 Joint Operations Command
Program 2.9 Capability Acquisition and Sustainment
22
4,301,399
Program 2.10 Estate and Infrastructure
28
22,803,032
Program 2.11 Chief Information Officer
4
1,550,979
Program 2.12 Defence People
5
430,486
Program 2.13 Defence Science and Technology
6
386,348
Total
164
66,145,269

Note: Programs 2.4 and 2.8 were changed in PAES 2017-18 to reflect the establishment of the Joint Capabilities Group and the Australian Defence Force Headquarters.

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, 2015-16 to 2017-18

2015-16 ($m)
2016-17 ($m)
2017-18 ($m)
Defence
90.7
244.7
108.0

Notes:

  1. Figures are GST inclusive.
  2. Defence has carried out a number of assurance activities to improve the accuracy of the information reported in relation to consultancy contracts. The assurance activities included a review of information relating to the financial year 2016-17. Refer page 136 for more details of Omissions and errors in the 2016-17 Defence annual report.

Australian National Audit Office access clauses

The Defence contracting templates include standard clauses providing for the Auditor-General access to contractors’ and major subcontractors’ premises, records and accounts. During 2017–18, Defence had 41 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, 2017–18

Group and company
Value ($)
Purpose Reason for non-inclusion of ANAO access clause
Army
United States Government
559,156
Technical and engineering services Foreign military sale
Total for the Army
559,156
   
Air Force
United States Government
522,533
Technical and engineering services Foreign military sale
Total for the Air Force
522,533
   
Strategic Policy and Intelligence Group
United States Government
985,321
Technical and engineering services Foreign military sale
Total for Strategic Policy and Intelligence Group
985,321
   
Chief Information Officer Group
United States Government
1,459,149
Equipment and support Foreign military sale
Total for Chief Information Officer Group
1,459,149
   
Capability Acquisition and Sustainment Group
United States Government
3,733,024.62
Equipment and support Foreign military sale
United States Government
11,054,268.27
Light weapons and ammunition Foreign military sale
United States Government
837,195.77
Light weapons and ammunition Foreign military sale
United States Government
22,995,876.51
Specialist military equipment Foreign military sale
United States Government
1,356,784.33
Equipment and support Foreign military sale
United States Government
13,531,604.45
Explosive ordnance Foreign military sale
United States Government
246,125.16
Light weapons and ammunition Foreign military sale
United States Government
4,787,649.60
Technical and engineering services Foreign military sale
United States Government
4,536,215.97
Communication equipment Foreign military sale
United States Government
943,630.10
Aircraft spare and repair parts Foreign military sale
United States Government
432,231.25
Technical and engineering services Foreign military sale
United States Government
100,657.59
Technical and engineering services Foreign military sale
United States Government
10,796,509.02
Technical and engineering services Foreign military sale
United States Government
23,690,520.00
Technical and engineering services Foreign military sale
United States Government
178,135.26
Communication equipment Foreign military sale
United States Government
1,023,178,451.00
Aircraft modification Foreign military sale
United States Government
261,230.19
Special military equipment Foreign military sale
United States Government
524,276,644.99
Aircraft modification Foreign military sale
United States Government
106,734,623.90
Explosive ordnance Foreign military sale
United States Government
71,812,013.42
Special military equipment Foreign military sale
United States Government
4,249,915.32
Light weapons and ammunition Foreign military sale
United States Government
3,581,247.96
Light weapons and ammunition Foreign military sale
United States Government
46,131,405.68
Light weapons and ammunition Foreign military sale
United States Government
81,847,591.85
Light weapons and ammunition Foreign military sale
United States Government
18,589,453.83
Explosive ordnance Foreign military sale
United States Government
7,247,086.60
Equipment and support Foreign military sale
United States Government
3,125,402.15
Technical and engineering services Foreign military sale
United States Government
37,165,871.97
Technical and engineering services Foreign military sale
United States Government
1,052,912.00
Communication equipment Foreign military sale
United States Government
54,539,718.94
Aircraft spare and repair parts Foreign military sale
United States Government
119,076,809.91
Aircraft spare and repair parts Foreign military sale
United States Government
1,701,430.66
Communication equipment Foreign military sale
United States Government
1,243,456.30
Equipment and support Foreign military sale
United States Government
9,245,245.03
Equipment and support Foreign military sale
United States Government
199,977,000.00
Equipment and support MOU shared contribution
United States Government
199,436,000.00
Equipment and support MOU shared contribution
Total for Capability Acquisition and Sustainment Group
2,613,693,940
   
Total for Groups and Services
2,617,220,099
   

Note: All figures are GST inclusive.

Defence uses the United States Department of Defense’s Foreign Military Sales program, which facilitates sales of United States 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: Online material

The following supplementary performance information is available on the Defence website, unless otherwise indicated.

Table B.1: Additional Online Information

Title
Report of the Inspector-General ADF
Women in ADF Report 2017-18 [PDF-2.9MB]
Sexual Misconduct Prevention and Response Office (SeMPRO) Report [PDF-750KB]
2017/18 Defence Industry and Innovation Programs Annual Report
Acquisition, sustainment, facilities and infrastructure information
Web Table B.1: Top 30 sustainment products by expenditure, 2017–18 [XLS-36KB]
Web Table B.2: Top 30 acquisition projects by expenditure, 2017–18 [XLS-37KB]
Web Table B.3: Top 30 acquisition projects by expenditure (variations), 2017–18 [XLS-29KB]
Web Table B.4: Major acquisition projects closed in 2017–18 [XLS-21KB]
Web Table B.5: New major acquisition projects approved by Government in 2017–18 [XLS-27KB]
Web Table B.6: Approved facilities and infrastructure projects by state and federal electorate [XLS-37KB]
Web Table B.7: Performance of major capital facilities projects 2017–18 [XLS-55KB]
Web Table B.8: Major Defence establishments and bases [XLS-37KB]
Web Table B.9: Status of capital facilities projects for consideration and approval by the Parliamentary Standing Committee on Public Works in 2017–18 [XLS-78KB]

Table B.2: referenced websites and supporting documentation

Reference
2017–18 Defence Corporate Plan
Defence’s Information Publication Scheme
Sea Power Centre – Australia website
Department of Prime Minister and Cabinet Indigenous Procurement website

Appendix C: 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
17AJ(c) Glossary of abbreviations and acronyms Mandatory 233
17AJ(d) List of requirements Mandatory 230
17AJ(e) Details of contact officer Mandatory 240
17AJ(f) Entity’s website address Mandatory 240
17AJ(g) Electronic address of report Mandatory 240
17AD(a) Review by accountable authority    
17AD(a) A review by the accountable authority of the entity Mandatory 2
17AD(b) Overview of the entity    
17AE(1)(a)(i) A description of the role and functions of the entity Mandatory 8
17AE(1)(a)(ii) A description of the organisational structure of the entity Mandatory 12
17AE(1)(a)(iii) A description of the outcomes and programs administered by the entity Mandatory 11
17AE(1)(a)(iv) A description of the purposes of the entity as included in the corporate plan Mandatory 8
17AE(1)(b) An outline of the structure of the portfolio of the entity Portfolio departments—mandatory 9
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 11
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 20
17AD(c)(ii) Report on financial performance    
17AF(1)(a) A discussion and analysis of the entity’s financial performance Mandatory 44
17AF(1)(b) A table summarising the total resources and total payments of the entity Mandatory 44
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 52
17AG(2)(d)–(e) A statement of significant issues reported to the Minister under paragraph 19(1)(e) of the PGPA Act that relates to noncompliance with the finance law and action taken to remedy noncompliance If applicable, mandatory 60
  External scrutiny    
17AG(3) Information on the most significant developments in external scrutiny and the entity’s response to the scrutiny Mandatory 64
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 67
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 68
17AG(3)(c) Information on any capability reviews on the entity that were released during the period If applicable, mandatory 68
  Management of human resources    
17AG(4)(a) An assessment of the entity’s effectiveness in managing and developing employees to achieve entity objectives Mandatory 102
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 85-87, 110
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 93
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 93
17AG(4)(c)(ii) The salary ranges available for APS employees by classification level Mandatory 94
17AG(4)(c)(iii) A description of non-salary benefits provided to employees Mandatory 94
17AG(4)(d)(i) Information on the number of employees at each classification level who received performance pay If applicable, mandatory 95
17AG(4)(d)(ii) Information on aggregate amounts of performance pay at each classification level If applicable, mandatory 95
17AG(4)(d)(iii) Information on the average amount of performance payment, and range of such payments, at each classification level If applicable, mandatory 95
17AG(4)(d)(iv) Information on the aggregate amount of performance payments If applicable, mandatory 95
  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 118
  Purchasing    
17AG(6) An assessment of entity performance against the Commonwealth Procurement Rules Mandatory 118
  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 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 Freedom of Information 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 69
  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 118
17AG(10)(b) An outline of the ways in which the procurement practices of the entity support small and medium-sized enterprises Mandatory 118
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 118
  Financial statements    
17AD(e) Inclusion of the annual financial statements in accordance with subsection 43(4) of the PGPA Act Mandatory 145
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 133
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 132
17AH(1)(c) Outline of mechanisms of disability reporting, including reference to website for further information Mandatory 112
17AH(1)(d) Website reference to where the entity’s Information Publication Scheme statement pursuant to Part II of Freedom of Information Act can be found Mandatory 229
17AH(1)(e) Correction of material errors in previous annual report If applicable, mandatory 136
17AH(2) Information required by other legislation Mandatory 89, 105, 127, 134