Chapter Six > Commercial Support Program

Commercial Support Program

The Commercial Support Program is Defence's primary mechanism for undertaking competitive tendering and contracting. The program, which began in 1991, aims to ensure that support services are provided to Defence in the most cost-effective manner. Services are contracted out when it is operationally feasible, a viable market exists and industry can demonstrate better value for money.

The Defence Employees Certified Agreement 2004-2006 facilitates the application of the Commercial Support Program in Defence. The agreement covers all market testing and any other competitive tendering or equivalent processes that may result in the contracting out of a Defence civilian activity.

The Defence Integrated Distribution System market-testing activity was finalised during 2003-04 with the signing of a contract between Defence and TenixToll Defence Logistics on 18 December 2003. Requests for tender closed on 30 March 2004 for the Information Technology Infrastructure Support Services - Central Office market-testing activity. Evaluations are proceeding and an announcement is expected during 2004-05.

Table 6.2 Commercial Support Program Progress Summary as at 30 June 2004
CSP evaluation decisions made 121  
Commercial contracts 80 (66%)
In-house options 32 (27%)
Status-quo retained 9 (7%)
Number of positions tested (1) 15,935  
Indicative total value of commercial contracts and in-house options (1) (2) $5,935.4m  

Notes

  1. Values and positions tested are based on information provided at the time of decision announcement.
  2. Indicative total value of contracts covers the full term of the contracts.

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Table 6.3 Activities in Progress or Under Consideration
Activity Name Status
Information technology infrastructure support services Request for tenders closed 30 March 2004. The evaluation is proceeding.
ADF rotary wing flying training - Army Project scope under assessment.
Routine pathology services Appropriate service delivery method to be determined.
Regional information communication technology market testing Scope being finalised.
Personnel Services Being rationalised and restructured under the Business Improvement Project.
Navy technical training services Project scope is under assessment and business case is being finalised.

 

Table 6.4 Activities Not Proceeding Under the Commercial Support Program
Activity Name Reason
ADF rotary wing flying training - Navy This activity has evolved into the Maritime Interim Rotary Training and Support System project. An operating lease is being sought to maintain relevant capabilities until definitive replacements are provided under later phases.
ADF Health Services - All regions The preferred contractor for Victoria withdrew from negotiations. The Australian Capital Territory and southern New South Wales tender evaluation did not recommend a single tenderer. The lack of success with these two activities has led to alternative options being considered for all regional ADF Health Services activities. Future projects are likely to focus on specific bases and/or specialised health services.
Adelaide-class guided missile frigates and Anzac-class ships Aggregation of existing contracts.

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