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Minister for Defence Materiel Dr Mike Kelly today acknowledged the vital contribution the Australian defence industry sector made to equipping and sustaining the Australian Defence Force.
“The Government is committed to ensuring that Defence provides continuing opportunities for local industry to compete for work based on open, transparent and accountable processes.
“Effective materiel solutions for the ADF and value for money for the taxpayer will remain the primary considerations,” Dr Kelly said.
In the past 12 months Australian companies have signed major, long-term contracts with Defence. Some examples include:
- Thales Australia has received several contracts totalling approximately $620 million including for the sustainment of maritime systems including on-board systems and equipment for the Navy’s ANZAC and HUON class warships;
- ASC Pty Ltd has been awarded contracts to the total value of approximately $813 million for the provision of sustainment services and equipment, including for Collins Class submarines;
- Canberra company CEA Technologies has received work valued at almost $20 million;
- Australian Defence Apparel has been awarded contracts to the total value of almost $19 million for the manufacture and supply of soldier ballistic plates and protective equipment;
- Bruck Textiles has also received contracts to the total value of around $8 million to manufacture and supply camouflage uniforms; and
- Nova Defence (Nova Systems) received contracts totalling nearly $12 million for the provision of engineering services for ADF aircraft, helicopters and ship systems.
“They provide an incubator and proving ground for technology, knowledge and capacity that can be grown and leveraged across other sectors of industry.
“In individual sectors like shipbuilding and repair, the challenge is to harness those skills and avoid productivity dips.
“The Future Submarine Industry Skills Plan, which the Government will this year release, offers us a great opportunity to tackle those issues in the maritime domain, and more effectively plan for the future.”
Last week Dr Kelly met with a cross-section of Defence companies and received briefings on both current projects and new developments during his visit to the Australian International Airshow and Defence Exposition at Avalon in Victoria.
“It’s encouraging to hear from companies like Northrop Grumman who are looking to come to Australia and set up their base here,” Dr Kelly said.
“I was also really impressed by some of our SMEs and the way they are innovating, working together with Defence and other industry companies to develop new product solutions.”
Industry assistance programs managed by Defence through the Defence Materiel Organisation (DMO) provide grants and funding to companies seeking to develop new equipment solutions, and to pursue export opportunities that will ultimately benefit both Defence and industry.
“Programs such as the Global Supply Chain program and the Priority Industry Capability Innovation Program have been well received by industry and are delivering real results,” Dr Kelly said.
“This is not about just handing out cash. These are targeted programs and investments to encourage defence companies to build or maintain their footprint and skills in Australia, and to help Australian firms to be more competitive on the world stage.”
Under the Global Supply Chain program to date more than 200 contracts have been awarded to 61 Australian companies to the value of $540 million.
The Priority Industry Capability Innovation Program (PIC IP) provides financial support to Australian defence companies to commercialise innovative projects that support a PIC area. The financial support is in the form of matched, repayable grants. The first round of grants totalling $12.1 million was awarded in May 2012 to a total of nine companies. A second round of applications has now closed, with an announcement of successful grant recipients expected in May 2013.
Industry has also been actively engaged with critical work in the early phases of capability development through initiatives under the Rapid Prototyping, Development and Evaluation (RPDE, pronounced RAPID) banner and through the Defence Materials Technology Centre.
Dr Kelly also clarified recent reports of the proportion of defence expenditure that stays in Australia.
“It’s important to have the debate but for the debate to be based on the facts,” Dr Kelly said.
“Since 2009, Defence has been modelling materiel expenditure by location using a rigorous and consistent approach.
“Defence’s analysis has consistently shown that between 52 and 60 per cent of existing work is done in Australia. The good news is that in the current financial year Defence expects that aggregate figure to be as high as 59 per cent.”
“This equates to $4.7 billion of expenditure on defence equipment and through-life support activities in Australia this financial year, and is anticipated to grow across the four-year forward estimates,” Dr Kelly said.
Recent initiatives including the release of Public Australian Industry Capability (AIC) Plans are enhancing industry awareness of opportunities within the supply chains of major companies.
Six of these plans have already been publicly released with work well underway on the development of Australian Industry Plans in support of major programs such as Future Submarines, Future Frigates and LAND 400 Combat Vehicles.