Australia’s Minister for Defence Industry Melissa Price has outlined an intention to “strengthen” the country’s defence industrial collaboration policy: the Australian Industry Capability (AIC) programme.
She said the enhancements are necessary to support local industry in light of “growing challenges” faced by defence companies, particularly small businesses, during the Covid-19 pandemic.
German shipbuilder Lürssen has achieved nearly 63% local content in its programme in Australia to build 12 Arafura-class offshore patrol vessels for the Royal Australian Navy. (Lürssen Australia/ASC)
In a statement published by the Australian Department of Defence (DoD) on 15 April, Price said efforts to enhance the AIC programme would be focused on establishing a new contractual framework for the policy and to introduce a new auditing system that would ensure local industry is better protected.
She said, “With the growing challenges faced by the Australian defence industry during Covid-19, these changes to AIC will ensure small businesses are provided with more opportunities to compete for defence work and certainty that major contractors will be held to account on the delivery of these opportunities to small businesses.”
According to Price, the new AIC contractual framework would look to ensure certain levels of local content are met in defence industrial collaborative partnerships between foreign prime contractors and local subcontractors.
She indicated that local content requirements would be included in all contracts between prime contractors and the DoD’s procurement arm, the Capability Acquisition and Sustainment Group (CASG).
“I recognise that we need to go further in our support for small business by offering more guarantees of local content in our defence programmes moving forward,” Price said. “As a result, I will establish a mandated set of contractual terms that are consistently applied to all CASG contracts requiring an AIC plan.”
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