Page 27 - Australian Defence Magazine July-August 2021

JULY-AUGUST 2021 | WWW.AUSTRALIANDEFENCE.COM.AU
DEFENCE BUSINESS 27
and $1.5 billion on its contractors. With around 16,000 of the former and 5,500-6,000 of the latter, that means De- fence is paying on average $120,000 for a public servant and $280,000 for a contractor.
Defence seems to have gotten quite comfortable with this arrangement. It may well be the case
that paying 130% for a contractor is value
for money, but since Defence also told the
Senate that ‘Defence has not undertaken a comparative cost analysis of contractors compared to APS staff’ there’s no way for Defence to know (and assure the govern- ment and Australian public) that it is.
As both the acquisition and sustainment budgets rapidly grow over the course of the decade, Defence and industry will be com- peting for the same skills, without good management the supply of workforce will go down and the cost will keep going up.
A further cause for concern around Defence’s ability to achieve the plan set out in the DSU is that we still haven’t gotten beyond the delivery problems that have plagued De- fence projects for decades. Earlier this year Defence can- celled a project delivering a new submarine rescue system. Defence officials have said that the Department and the
contractor had irreconcilable differences in their under- standing of the project. In other words, Defence got into contract and spent $100 million before realising it and its industry partner couldn’t agree on what the project was meant to be delivering. This issue is all the more salient in
“ WHEN WE NO LONGER HAVE WARNING TIME, HOW DOES IT MAKE SENSE TO SPEND $575 BILLION ON DEFENCE OVER THE DECADE AND NOT GET A SINGLE NEW WARSHIP INTO SERVICE IN THAT PERIOD?”
light of the recent tragic Indonesian sub- marine disaster.
We’ve also seen the Army’s digital battle management system put on hold, first re- vealed by ADM. Elbit has strenuously denied rumours about serious security flaws, and Defence has said it’s a world leading capabil- ity and it’s the Army’s highest priority. But as the ANAO has pointed out, the project has been running for fifteen years, has cost nearly $2 billion to date, has only equipped part of the Army, and is likely to take over another decade to complete the rest of the Army. If taking a quarter of a century to equip your
troops with your highest priority capability is acceptable, then Defence’s comfortable way of doing business needs a shake-up. Defence has gotten a new minister in Peter Dutton. It’s hard to see him being happy with that comfortable plan. He might just be the person to make things rather uncomfort-
able for Defence. ■
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