PRIORITY INDUSTRY CAPABILITIES Michelle Kelly and Rob Bourke - - PowerPoint PPT Presentation

PRIORITY INDUSTRY CAPABILITIES

Michelle Kelly and Rob Bourke Commercial Enabling Services Division Defence Materiel Organisation

PIC Agenda

• Objectives
• Definition
• Health checking/intervention

• PICs provide a significant strategic advantage to Australia by

supporting the capital equipment requirements of the ADF

• a healthy PIC is one which can deliver now, and in the foreseeable

future, a designated capability on time and to an acceptable technical standard - all at a reasonable price

• Government is prepared to intervene in the market to support a PIC

should a significant capability shortfall exist, the benefits of intervention clearly exceed the costs and sufficient budget funding is available

Three Core Concepts

• defining the capabilities most important to the Australian Defence

Force (ADF) achieving its operational objectives (‘demand’)  assessing whether these capabilities are available from Australian- based companies or, in some cases, from within the public sector (‘supply’)  determining whether, and in what form, intervention by Government to support an ailing capability should occur - where Defence’s demand exceeds what industry and others can reasonably provide

Three Key Steps

• altering the size or timing of capital equipment acquisition or

sustainment projects to better suit the requirements of industry

• changing the procurement method eg. from open competition to

sole source

• extending a preference to companies competing for skilling,

innovation, export and other types of grants

• revising Defence’s general planning procedures

 letting a capability diminish, with a view to restoring later

Five Potential Intervention Measures

• the risk to ADF operations should a capability

not be available from within the Australia

• the impediments to that capability being

supplied from overseas

• the availability of domestic supply alternatives,

like stockpiling Core PIC Selection Criteria

• expanding ADF capability options
• developing technologies and products to

exchange with allies

• cost
• other - eg promoting market competition or

providing ‘strategic insurance’ Ancillary PIC Selection Criteria

Priority Industry Capabilities

• 1. Combat Uniform and Personal Equipment
• 2. Selected Ballistic Munitions and Explosives
• 3. Infantry Weapons and Remote Weapons Stations
• 4. Ship Dry Docking Facilities and Common User

Facilities

• 5. Acoustic Technologies and Systems
• 6. High Frequency and Phased Array Radars
• 7. Electronic Warfare
• 8. In-service Support of Collins submarine combat

system

• 9. Signature Management

10.Anti-Tampering Capabilities 11.Through-life and Real Time Support of Mission and Safety Critical Software 12.‘High End’ System and ‘Systems of Systems’ Integration

• strategic threats - short .v. long term
• PIC availability - short .v. long term
• technology development - inside .v.
• utside the PIC policy umbrella

Selection Criteria Review

• quantity of the capability required
• the period of availability
• specific technologies or products
• Defence’s willingness to pay

What Selection Criteria Doesn’t Specify

Structure-Conduct-Performance Paradigm

• the number and size of existing suppliers
• their dependence on Defence workload
• the position of potential suppliers
• barriers to market entry
• demand for the PIC, now and in foreseeable

future

• the prices existing suppliers charge and their

financial viability

PRIORITY INDUSTRY CAPABILITIES

QUESTIONS?