Defence companies bidding for Australian shipbuilding contracts will be asked to provide greater detail on how they will develop Australian industry capabilities if a recent submission from the AAMC is adopted.
AAMC Chairman, Mr John Pollaers, in a letter this month to the Minister for Defence, Senator the Hon Marise Payne, and Minister for Defence Industry, the Hon Christopher Pyne, called for specific wording in future Requests for Tender documents aimed at ensuring Australian “sovereign capability”.
Sovereign capability refers to the ability of a country to build and sustain its own defence, including the sophisticated industry needed to guarantee military independence, if necessary, in times of conflict.
The Government’s ambitious program, launched in the Defence White Paper and the Defence Industry Policy Statement in February, is to make Australia’s defence industry a “fundamental input to capability”.
This is designed to drive a greater proportion of the nation’s defence procurement budget to local firms, to increase exports, and to ensure a stronger emphasis on innovation and R&D to strengthen Australian industry capabilities.
“The shipbuilding programme embarked upon by the Australian Government, combined with the Government’s goal as set out in the Defence White Paper, of achieving Sovereign Capability in shipbuilding, are of enormous importance,” the letter said.
The Australian Advanced Manufacturing Council recognises and supports the Government’s objectives.
“We believe that in order to achieve these objectives, the Government should include a specific requirement in all Requests For Tenders (RFTs) that tenderers state how their proposal will address achieving this sovereign capability; and that the tender review process specifically assess each tender on this issue, as well as the other factors,” Mr Pollaers said.
The letter suggested the RFTs could ask tenderers to detail how their bids might answer a range of questions, including the following:
- How will it improve Australia’s capacity to sustain the ship and its systems independently after completion of the project? (e.g. if the host nation of the designer was prevented by its domestic politics from supporting a conflict which Australia was pursuing – how robust will the Australian capacity be?)
- What is the potential for export?
- What research and development plans to further develop technologies and their application, will be associated with the project?
- What IP will be transferred to Australia?
- What new or enhanced manufacturing capability will be associated with the project, and what are the associated benefits to civilian manufacturing?
- What jobs will be created, with what skills, where?
- What firms and technologies may be part of the supply chain for the project?
- What will be the value of work conducted in Australia, versus outside Australia?