EMBARGOED UNTIL 2100 27 AUG 97
MIN 111/97 Wednesday, 27 August, 1997
AUSTRALIAN INDUSTRY MUST BE INVOLVED IN THROUGH-LIFE SUPPORT OF DEFENCE EQUIPMENT
The Minister for Defence, Mr Ian McLachlan, said tonight that it was increasingly important that Australian industry was involved in the through-life support of defence equipment.
Mr McLachlan, addressing the 1997 Defence Procurement Seminar in Canberra, said that Australian industry must be involved in more than just the acquisition of equipment, but in the ongoing processes of modification and upgrading.
"In the past Defence has found to its cost that there is much more to buying equipment than simply the up-front purchase price," he said.
The Defence Minister said that the real cost of equipment included long-term maintenance and support, training the people who use it and the opportunity costs of other projects forgone.
"You might think that you have a bargain when you buy two second-hand training helicopter support ships for $61 million. It turns out to be less attractive when the modernisation costs lift the total price to about $228 million. We must learn from our predecessor's experiences."
In 1996/97, Defence spent $2.4 billion on major and minor capital equipment, of which $1.3 billion, close to 55%, was spent in Australia. Defence looked to Australian industry for cost-effective ways to meet military needs.
Mr McLachlan emphasised the Defence Reform Program's advantages to industry through more investment in equipment to enhance defence capability plus the expansion and acceleration of the Commercial Support Program.
"Industry will gain from the long-term continuation of work while Defence will benefit from lower costs and a viable support base, with the Lead in Fighter project a good example of such a contract," he said.
"In some cases, the equipment investment will be designed to bring new capabilities into the Australian Defence Force - such as airborne early warning and control. In others, this is to ensure our forces have the most effective capabilities we can give them.
"Under the Commercial Support Program to date, 80 evaluation decisions have been made with more than two thirds won by commercial contractors. CSP achievements have been significant with estimated annual savings now at $153 million," Mr McLachlan said.
The Minister presented the Defence Industry Quality and Achievement Awards, established 15 years ago to encourage industry to gain quality system certification so that companies could market their skills as being amongst the best in their field.
In 1987, there were only six companies registered in the Standards Association's Supplier Assessment Scheme - by April this year, Australia had 11,105 firms with ISO 9000 certifications.
"The recipients of awards tonight show that Australia's defence companies are now leading edge companies able to compete with the world's best," Mr McLachlan said.
This year there was not a winner of the Major Capital Equipment Projects over $20 million category. The two projects in this category are yet to be fully completed, however, both finalists have made valuable contributions to Defence capabilities.
Buchanan Advanced Composites won the Major Capital Equipment Projects under $20 million category for outstanding achievement in the development, manufacture and supply of the Mobile Intensive Rescue Facility (MIRF) for the Australian Defence Force.
Designed to meet a Defence Force requirement, this equipment has a wide range of possible application, including supporting remote communities, hospitals and mining sites, oil rigs, large ocean going ships and aeromedical retrieval. It has already been successfully deployed in Rwanda and more recently for transporting one of the victims of the Blackhawk accident between Townsville and Perth.
AMC Search Ltd won the Supplies and Services category for the outstanding delivery of training programs in the Pacific Patrol Boat Training Project.
Around 340 Pacific Islanders each year receive training under the program in a diverse range of skills including ship safety and husbandry, marine technical propulsion, technical electronics, navigation and seamanship, and fisheries surveillance and management.
The Facilities and Property category was won by Spantech Pty Ltd for outstanding achievement in the design and construction of explosives storehouses and non-explosives workshop at HMAS Stirling for the Royal Australian Navy.
In order to release land in Sydney for the 2000 Olympics, alternative ammunition storage facilities had to established at Garden Island in Western Australia. Working to a timetable of only 17 weeks, Spantech offered an alternative to the Department's conforming designs which were one third larger than earlier storehouses while providing a 5.5% cost benefit to Defence.
Further information:
Ministerial Jim Bonner 0419 438 490
Departmental Mignon Patterson (02) 62652886/018 632657 Colonel Roger
Dace (02) 62664098/018 697 451