Page 4 - Australian Defence Mag March 2020

4 EDITORIAL
MARCH 2020 | WWW.AUSTRALIANDEFENCE.COM.AU
AIC IN THE DETAIL
KATHERINE ZIESING | CANBERRA
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THIS month will see the industry roadshow for Land 400 Phase 3 kick off around the country. Visiting 12 cities in all states and territories, the process will allow for a ‘speed dating’ type approach with compa- nies able to pitch to a panel of key people from Defence, Rheinmetall and Hanwha at the same time.
The roadshow approach was also used in Phase 2 of the program, albeit at a slightly later stage once government had made it crystal clear that Australian In- dustry Capability (AIC) was a priority. The Risk Mitigation Activity (RMA) then rolled on. And so it is for Phase 3; many of the same processes are being followed for the Mounted Close Combat Capability that were in place for the Combat Recon-
ter but there doesn’t seem to be a coher- ent approach on how to best measure and perform it. What does value for money mean in this area? What is the premium the Commonwealth is willing to pay, if at all, for capability or sovereignty? Where do you draw the line with AIC; is it hotels and facilities maintenance or ‘traditional’ de- fence companies? Does ownership struc- ture matter? Should it?
When I ask these questions of people from all parts of our community I get a wide range of answers and funnily enough very few of them line up. There is a definite misalignment of expectations in this space.
The fact of the matter is that Australia does not have a formal AIC policy in a way that many in the international community understand under an offset framework. There are aspirations rather than mandates. There are best efforts rather than black and white contractual levers. Sixty per cent AIC seems to be the pass mark for acceptable.
Even the publicly available AIC plans hosted on the Defence website come with the fine print of: ‘The information provid- ed in the AIC public plans below is based on information provided by the company that is managing the particular AIC plan and is accurate as at the date of publica- tion. Any questions or issues related to the information contained in an AIC public plan (including confirmation of the infor- mation's currency) should be directed to the contact listed in that plan. Website visitors should note that the AIC public plans may contain links to other websites not controlled by Defence. Defence does not control, nor does it have responsibility for, these websites, nor does the inclusion of the link constitute any form of endorse- ment of those websites by Defence.’ In a nutshell: it’s not us, talk to the prime.
News last month that Minister for De- fence Industry Melissa Price is in the pro- cess of developing an independent audit framework for all major program AIC plans is welcome. And that there will be signifi- cant consequences for failure to comply, she said. Let’s see what the fine print says when it is released. ■
naissance Vehicles. As seen on P34 this month, the con- tenders in the Rhe- inmetall Lynx KF41 and Hanwha Red- back AS21 will be put through their paces in terms of both on field capability and as- sessed on their AIC/ sustainment merits as well. Clearly Rhe- inmetall has walked this path before un- der various phases of Land 121 and Land 400 Phase 3, with only minimal stumbles along the way. Hanwha has also made it known that this not busi- ness as usual for them either. While the company has an impressive international order book of IFVs and self-propelled guns with local content, a potential win in Aus- tralia also means strategic diversity for their home market where the neighbourhood geo-
political temperament can be mercurial.
It will be interesting to see how both contenders shape up in terms of both ca-
pability and AIC.
That, dear reader, brings me neatly to
the vexed issue of AIC. Everyone has a great idea on how to make it work bet-
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“WHAT ARE THE MECHANISMS IN PLACE FOR MAKING SURE THAT PRIMES DELIVER TO THESE AIC ASPIRATIONS? AT THE MOMENT, NOT A LOT.”
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