Australia warns prime contractors to deliver on industry co-operation pledges

Australia’s Minister for Defence Industry Melissa Price has warned prime contractors in the country that she will get ‘tough’ on companies that do not comply with obligations to collaborate with local small and medium-sized enterprises (SMEs).

In a speech published by the Department of Defence (DoD) on 17 May Price said the strategy to support collaboration and facilitate greater levels of local content on defence programmes will be framed by the government’s “five pillars approach” to support the development of the local defence-industrial base.

Price said that the requirement to develop a sovereign industrial capability in Australia had prompted her to get “tough on the primes and my own department”. She added, “We are going to expect more of [prime contractors] and tolerate less.”

In the speech – at a function to mark the announcement of Australia’s 2021 defence budget – the minister said, “When I came into this portfolio, I was determined to identify and remove the barriers that were preventing Australian defence SMEs from getting a fair go when vying for defence work.

“But I also wanted to ensure that we had the right levers in place to enable greater access to defence opportunities. It’s not enough just to get rid of the barriers; you’ve also got to work out what the levers are and what the enablers are.”

To support these aims, Price said Australia will pursue the ‘five pillars approach’ that the government and the DoD first mooted in 2020.

These pillars feature a list of reforms comprising:

Price said, “Primes must deliver specific and enforceable commitments for Australian industry capability, IP [intellectual property] transfer, skills transfer, research and development, and spend in Australia.”