18 August 2020
Australia aims for industry benefits through updated procurement rules
by Jon Grevatt
Updated public procurement rules in Australia are expected to benefit the domestic defence industrial base through heightened requirements to provide opportunities for local companies.
The Department of Defence (DoD) in Canberra said that the recently amended Commonwealth Procurement Rules (CPRs) put more emphasis on achieving “value for money” through the development of sovereign capabilities and related skills.
Minister for Defence Industry Melissa Price said, “These are important changes aimed at forging new opportunities for Australia’s terrific defence industries.”
The most recent CPR changes are provided in a document entitled ‘Consideration of Broader Economic Benefits in Procurement’, which was published by the Australian Department of Finance in August.
Updated procurement rules in Australia put more focus on supporting domestic economic benefits in major defence acquisitions such as the country’s procurement of BAE Systems Hunter-class frigates. (Royal Australian Navy)
Value for money
According to the DoD, this economic benefits document outlines “more stringent requirements for procurements valued above AUD4 million (USD2.9 million) for non-construction services and AUD7.5 million for construction services”. It added, “One of the guiding key principles of the CPRs has been a requirement for ‘value for money’: essentially, to look after the interests of the Australian taxpayer.”
The DoD said, “The government has updated the guidance around [the provision of value for money], which strengthens the expectations of procurement decisions makers, so they give the best possible opportunity to Australian industry. The expanded guidance includes more specific details about what factors to consider when awarding a defence contract.”
It added, “This means that when considering ‘value for money’, [the DoD] must give consideration to the contribution of small business, the Australian Industry Capability programme (AIC), sovereign capability and building skills.”
Economic benefits
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