The 2019 Defence Policy for Industry Participation will provide more opportunity for Australian companies to compete for work with Defence and represents the next step in the Australian Government’s multi-faceted Defence industry policy agenda.
The policy builds on the Australian Industry Capability Program and Local Industry Capability Plan. The policy introduces a new requirement on tenderers to address Australian industry involvement for all Defence materiel and non-materiel procurements above $4 million, and for the procurement of construction services above $7.5 million.
To meet the new requirements of the policy, successful tenderers will need to provide detailed commitments on how they will utilise and develop Australian industry. These commitments will become contracted deliverables and successful tenders will be required to report on their performance against them.
The policy provides a more consistent approach to the consideration of Australian industry at the national and local levels across Defence procurement. This will assist in addressing the requirements to consider the broader economic benefits of such procurements under the Commonwealth Procurement Rules.
The government recognises that there is no ‘one size fits all’ approach to Defence procurement, and the application of the policy will need to be pragmatic and flexible. The policy must reflect the wide range of Defence’s procurement activities, and also balance consideration of Australian industry with seeking to lower the costs of tendering. The policy does not mandate or preference local suppliers.
Defence will apply the requirements of the policy through a staged implementation process over 2019 to both new projects and new phases of existing projects. This will provide industry with time to become familiar with, and prepare for, the new requirements.