Australian DoD's industrial security vetting criticised by national audit agency

The Australian National Audit Office (ANAO) has criticised the Department of Defence (DoD) in Canberra for failing to properly manage the security vetting of companies involved in delivering contracts worth more than AUD200 billion (USD146 billion).

In an audit released on 13 September, the ANAO found that the DoD's administration of the contractual obligations relating to the Defence Industry Security Programme (DISP) were only “partly effective”.

The DoD's website describes the DSIP as “essentially security vetting for Australian businesses”, but DoD arrangements for monitoring compliance with contracted DISP membership were described by the ANAO as not fit for purpose.

“As of March 2021, Defence had over 16,500 active contracts with a total commitment of more than AUD200 billion,” said the agency, adding, “Defence does not know which of these contracts should, or do, require the contracted entity to have DISP membership. This situation limits the effectiveness of DISP as a security control.”

A 2019 DoD internal audit had identified 13 companies without valid security clearances that were awarded defence contracts with ‘secret' or above security classifications, the ANAO revealed.

By June 2021 nine of these contracts were still in place but only one of the companies had obtained DSIP membership, while three were awaiting approval and five were yet to apply for the necessary accreditation, the ANAO added.