The Minister for Defence, John Moore, today said that the Defence and Industry Advisory Council, the Federal Government's peak Defence-industry consultative group, is quickly proving itself to be a key body in the exchange of information and ideas between Defence and industry.
"The DIAC will play a major role in the Government's intention that Defence adopt the best available commercial practices in the management of Defence," Mr Moore said.
The DIAC's second meeting took place in Sydney last week. A key outcome of the meeting was the release of a communique entitled 'A Framework for Partnering to Improve Defence Capability'. A copy of the communique is attached.
"Partnering is about the deliberate measures taken by Defence and industry to improve the effective working relationships between stakeholders," said Mr Moore.
"Partnering is not a substitute for a sound relationship or contract between Defence and industry. However, it can be an effective mechanism to gain agreement from all contracting parties on common sense business principles to be followed during the life of a contract."
The DIAC meeting also discussed a number of other issues including globalisation and the effect this has on defence technologies and research, the concept of broad national support for Defence, and the development of an officer exchange program between Defence and Industry.
The DIAC also received initial reports on two initiatives established at the inaugural meeting last December. Dr David MacGibbon and the Under Secretary for Defence, Mick Roche, reported on a program for Defence Acquisition Reform. David Mortimer reported on the applicability of Private Finance Initiatives in Defence.
The next meeting of the DIAC will discuss ongoing progress on these two initiatives. It also will consider furthering the concept of partnering, as well as the national support agenda, industry restructuring, and progress on the review of acquisition and logistics.
Mr Moore said that another issue which will be very important for future DIAC meetings will be consideration of the industry and acquisition aspects of the new Defence White Paper.
The DIAC is chaired by the Minister for Defence and has senior representatives from both industry and Defence.
The Council advises the Government on strategic matters related to achieving the best industry support for Australia's defence requirements.
Defence and Industry Advisory Council Communique: A Framework for Partnering to Improve Defence Capability'
The defence of the nation and its interests is not just the business of our defence force. It is a truly national affair, in which industry performs a critical role.
Over the years, industry has come to play an increasing part in defence through privatisation of the means of production, and through the expanding role of commercial support for operations.
Both Government and industry recognise that the quality of the relationships between buyer and sellers, and among the key stakeholders on each side, is a key driver of performance in delivering goods and services. Effective communication, including early and frank discussion of difficulties with delivery under contract, should be the norm.
Real progress has been achieved in Defence-industry relationships. To develop them further, we need a 'Team Australia' approach - one that calls for greater attention to partnering.
Partnering is about the deliberate measures aimed to improve the effective working relationships between stakeholders. It takes different forms, including 'project partnering' (project-based relationships governed by a Partnering Charter), 'strategic partnering' that set broad ground-rules for all individual activities carried out between the parties, and risk/reward sharing arrangements such as alliance contracting.
Partnering is not a substitute for a sound relationship or contract between Defence and industry. Rather, it can be an effective mechanism to gain agreement from all contracting parties on commonsense business principles to be followed during the execution of a contract.
The Defence and Industry Advisory Council (DIAC) recognises that the Defence-industry environment is very diverse; one size does not fit all. But, it is convinced that further development of partnering between Defence and industry is needed.
In relation to project partnering, the DIAC endorses and encourages the following approach:
**Partnering should be actively considered for all Defence purchases which are complex, high value or high risk - including minor and major capital - facilities projects, and long-term supply and service support arrangements;
**Partnering arrangements should include the parties involved in the generation of key intellectual property;
**Partnering charters should reflect the particular needs of each relationship. No single template should be mechanically applied, although charters should address communication, dispute resolution and transparency;
**Charters should stand alongside the contract, but should not modify the rights and obligations of the parties under the contract;
**Charters should be updated throughout their life to reaffirm goals and ensure the inclusion of new participants; and
**Defence and industry should work together to develop procedures for successful partnering, and to review lessons learnt from the experiences already gained.
An interim 'Toolbox' on partnering has been placed on the Defence Acquisition Organisation Web Site, at this stage addressing project partnering. The Toolbox represents an evolving 'strategic framework for the introduction of partnering across Defence', one of the key initiatives identified in the 1998 Defence and Industry Strategic Policy Statement.
The DIAC will take an active interest in progress with project partnering through follow-up reporting to the Council. Further work is being undertaken on the development and application of strategic partnering and alliance contracting in Defence. The DIAC will consider these developments at future meetings and the Toolbox will be updated accordingly.
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Defence Industry Advisory Council Meeting Issues Framework For Partnering
