Defence importers and exporters, Defence Materiel Organisation (DMO) and Australian defence industry respectively must navigate complex foreign policy and varying acquisition processes to achieve objectives. Counsellor Defence Materiel (CONDMAT) Branch in Washington aims to smooth these processes for North America.

CONDMAT Washington performs three key roles: procurement, the principal responsibility of the office; understand and influence the United States (US) regulatory environment including legislation, policy interpretation and procedures on Australia/US procurement and releasability; and an export support function for Australian companies.

POLICY

The policy/regulatory function is undertaken by CONDMAT Washington, Mark Reynolds, and the Defence Materiel Attaché, Jim Gledhill, with broader support from everyone in the CONDMAT office and other Australian Defence Force (ADF) staff based in Washington.

Mr Reynolds began a three year posting in January 2006. He said, 'given the importance of the US Department of Defense (DoD) and US industry to the ADF's mission and the crucial role both have in all aspects of DMO's business, it is vital that we have good lines of communication and a clear understanding of each others aims and requirements. A big part of my job is fostering this.'

Activities within the policy and regulatory area include development and review of Memoranda of Understanding that facilitate the business processes between the two countries; engagement with those who can modify the laws and regulations; and attempts to educate the US defence industry and government community about Australia 's capabilities, needs, and our value to the US.

Mr Reynolds said a good example of current work is the Embassy's efforts to inform US lawmakers about Australia 's interests and concerns regarding the US Defense Authorisation and Appropriation Bills affecting development and production of the Joint Strike Fighter (JSF). Congress is currently considering the 2007 Bills and both the House of Representatives and Senate have marked up the Bills with changes to the US DoD's proposed build program for the JSFs. Australia has expressed concerns about the potential impact these changes could have to the schedule and unit cost of the program because of the direct affect these would have on the maintenance of Australia 's airborne fighter and strike capabilities. Working with Congress is one of the Embassy's principal roles and all relevant agencies within the Embassy are supporting this activity.

We have also been working closely with the international defence community in Washington to clarify recent changes to the US Foreign Military Sales (FMS) pricing structure. The US has just changed the 'Administration Surcharge' it applies to FMS cases from 2.5 per cent to 3.8 per cent, which can be a significant amount on large programs such as the C-17 Globemaster or the AEGIS Combat System for the Air Warfare Destroyers, both of which Australia was able to accelerate processing to get within the changeover deadline and get the lower cost. We have been working to gain a full understanding of why the US needed to change its fee structure, and the basis for the amounts now being applied.

We are also now working with the US DoD to develop Technology Release Roadmaps for major, complex programs so that access to US technology, technical data and intellectual property can be foreshadowed and the releasability processes worked into project schedules to ensure timely access. Many Australian program schedules have had difficulties with the US regulatory system, known as the International Traffic in Arms Regulations or ITARS, that controls the type and level of access the ADF and our contractors can have. The Roadmaps are an initiative that could become part of the baseline of future programs to try and overcome these difficulties.