Procurement in Defence

Defence is the largest procurement agency in the Commonwealth and is responsible for some of Australia’s most complex procurement activities.  Defence engages with industry to deliver value for money procurement outcomes in order to support departmental and Australian Defence Force capability.

There is a range of legislation that impacts on Commonwealth procurement, including (but not limited to) the Public Governance, Performance and Accountability (PGPA) Act 2013, the PGPA Rules and the Commonwealth Procurement Rules (CPRs).

There is also a range of mandatory Commonwealth procurement-connected policy which may impact on procurement, including initiatives such as Coordinated Procurement, Indigenous Procurement Policy and AusTender reporting.

Achieving value for money is the core rule of the CPRs.  Officials responsible for a procurement must be satisfied, after reasonable enquires, that the procurement achieves a value for money outcome.  Procurements should:
     a    encourage competition and be non-discriminatory;
     b.   use public resources in an efficient, effective, economical and ethical manner  that is not inconsistent with the policies of the Commonwealth;
     c.   facilitate accountable and transparent decision making;
     d.   encourage appropriate engagement with risks; and
     e.   be commensurate with the scale and scope of the business requirement.

To support the application of this procurement related legislation and policy, Defence has a single overarching procurement policy framework managed by Capability Acquisition and Sustainment Group.

Mandatory procurement guidance is contained in the Defence Procurement Policy Manual (DPPM).  The DPPM applies to all Defence officials. In certain circumstances, a contractor may be deemed to be a Defence official in accordance with Defence’s Accountable Authority Instructions, or a contract may extend the application of the DPPM to a contractor.

Within CASG, this departmental policy is supplemented by best-practice process guidance contained in a Complex Procurement Guide and a Simple Procurement Process Tool.  Departmental activities are also supported by a range of standardised templates.

The Australian Standard for Defence Contracting (ASDEFCON) suite of tendering and contracting templates translates these mandatory procurement policy requirements into an appropriate contractual form.  These ASDEFCON templates provide draft contracts, based on established risk profiles, for acquisition, sustainment and related procurement activities, such as establishing a standing offer panel.  These templates are structured around the Conditions of Tender, draft Conditions of Contract and a draft Statement of Work. A number of other template suites are also available across Defence.

Defence is working with the public sector, industry and professional associations to support the development of a national procurement profession.  To support these initiatives, a range of updated vocational procurement courses and university strategic procurement courses are available.  Recently, the Australasian Procurement and Construction Council (APCC) and Defence worked with the Institute of Public Administration Australia to develop a Procurement Capability Standard to assist in the development of public sector procurement capability.

Unsolicited Promotional Product Offers

The Unsolicited Promotional Product Offers (UPPO) scheme allows Australian and New Zealand companies to introduce their commercially available products or services to Defence. The Centre for Defence Industry (CDIC) will assist companies with identifying Defence interest, familiarising themselves with the status of current tendering or purchasing arrangements for similar products, and understanding the processes involved in the defence market. If a Defence interest is identified, the CDIC will facilitate initial contact between the company and the relevant area of Defence.

Unsolicited Innovative Proposals

The Unsolicited Innovative Proposals (UIPs) scheme welcomes innovative suggestions from Australian and New Zealand industry that have the potential to enhance Defence capability, business processes or resource utilisation.

UIPs offer innovation to Defence by providing not standard commercially available products or services. Minor tailoring of an existing service or product to meet Defence requirements will normally not qualify as innovative. 

UIP proposers will need to complete the following formal documentation as part of their submission to Defence:

Further UIP guidance is available online:

Capability and Technology Demonstrator Program 

The Capability and Technology Demonstrator (CTD) Program Office manages processes UIPs on behalf of Defence. 

Proposals in the early stages of development can be submitted to the CTD Program, which focuses on locating technology in Australian industry that could provide capability advantages for Defence. The Defence Science and Technology Group website provides further information. 

Further information

Telephone: +61 2 6128 6497 or freecall 1800 647 946 (within Australia)
Email: CTD Program Office

Postal address 
Capability and Technology Demonstrator Program
Defence Science Technology Group
Department of Defence
24 Scherger Drive

Letter of Recognised Supply

The Letter of Recognised Supply (LoRS) Program is designed to promote Australian industry capabilities by acknowledging the successful supply of products or services to Defence by an Australian company. To receive the LoRS a company needs to meet the standards of supply demanded by the Australian Defence Organisation (ADO). Products and services need to be supplied on time, on budget and to specification. The LoRS provides companies with evidence of their supply to the ADO, to assist in bidding for new work or marketing their capabilities to non-defence customers.