Page 26 - Australian Defence Magazine Dec 2018 - Jan 2019

DEFENCE
DEFENCE BUSINESS
SMEs
Strength in numbers
Horizon Defence Systems
NIGEL PITTAWAY | ADELAIDE & MELBOURNE
When is an Australian Defence small to medium enterprise (SME) not an Australian Defence SME?
THE answer to the riddle is, when the com- pany is a member of Horizon Defence Sys- tems, a recently announced corporate alli- ance formed as a means of creating a ‘critical mass’ of collective expertise.
Although the initial teaming, which cur- rently includes 13 Australian SMEs (with a 14th to be announced shortly) is focussed on Defence projects in the Land and Am- phibious Warfare domains, the construct of the holding company allows for similar alli- ances to be created in other domains in the future, should it prove successful.
Projects initially targeted include Land 125, Land 159 and Land 3025.
Horizon Defence Systems
Horizon Defence Systems was formally launched at the 2018 Land Forces exhibi- tion in Adelaide in October, but the con- cept was born in the middle of 2017 in response to the First Principles Review rec- ommendation that Defence should adopt the ‘Smart Procurement’ initiative. Under the initiative, Defence requirements can be ‘packaged’ and taken to market together,
which often places SMEs at a considerable disadvantage given their (often) niche areas of expertise.
The company hopes that the critical mass of the aggregated SME membership will mitigate this perceived disadvantage and reduce the perceived risk for Defence when considering it for opportunities.
Under the corporate alliance, each group member contributes equity in the form of capital, expertise or labour (or any com- bination thereof) under a share valuation system. Horizon consists of a core advi- sory group, which provides members with guidance on business development, legal, finance, contracting and even public rela- tions matters, but the company is essen- tially administered and led by the members. New members can join the alliance with the agreement of the incumbents.
Across the initial membership of 13 SMEs, the aggregate annual turnover is $125 million and together the companies employ 400 people. The goal, at least in the Land and Amphibious Warfare space, is to grow this to $250 million in aggregate an-
nual turnover and between 600 and 700 ag- gregate employees.
After a review of the Defence Integrated Investment Program (DIIP) was agreed to initially target Tranche 1 of Land 125 Phase 4 (Soldier Systems Integration), fol- lowed by Land 3025 Phase 2 (Deployable Incident Response Regiment Capability), with Horizon Defence Systems to bid as the prime contractor.
However, the variations in timing of one or both these major projects has led Hori- zon to partner with another major prime for the supply of certain items and services for Land 3025/2. This partnership is yet to be announced but is expected to be made public in the short-term.
A Request for Tender (RFT) for Land 125 Phase 4 Tranche 1 was issued in September, with responses to be submitted by February 6, 2019 and this will be the first major test for the corporate alliance methodology.
Team members
The original 14 members span a wide range of capabilities in the Land domain and in- clude:
• Albion Sports Technology is best known
as the manufacturer of the ‘Baggy Green’ cap worn by the Australian Cricket Team, but it is also active in the develop- ment and manufacturer of lightweight protective clothing with potential De- fence applications.
• Benelec is a specialist radio frequency technology company is developing several radio technologies and is already a De- fence supplier. Included in the company’s portfolio are Full Duplex Radios; Helmet Mounted Antennas; Radio Audio Man- agement and Power Supply Management.
• Combat Clothing Australia (CCA) Pro- tect supplies armour-protection for dis- mounted personnel, vehicles and aircraft, as well as other items of a soldier’s combat ensemble. The company is already supply- ing pouches and webbing for Land 125.
• DaronmontTechnologiesisalreadywell- known as the developer and supplier of complex electronics, EW and software systems to Defence. The SME was re-
26 | December 2018 – January 2019 | www.australiandefence.com.au