Conclusion and recommendations
3.1
This chapter outlines the conclusions and recommendations of the
committee arising from the hearing in Port Augusta.
3.2
The committee was pleased to hear the overall message that the Defence
presence is welcomed and supported in local communities. The committee would
like to see Defence able to capitalise on the tremendous goodwill in the region
and the local knowledge, local experience and local skills. It is an
opportunity missed for Defence, and for the region, if it does avail itself of
these local resources to the greatest extent possible.
3.3
The committee recognises that Defence cannot source everything it needs
locally as do the local communities. However, the clear message from the hearing
was that local business wish to have the opportunity to be fairly considered
when Defence is sourcing goods and services.
Business opportunities
3.4
The committee agrees that communication, coordination and streamlining
the dissemination of information are critical to maintaining and improving the
relationship between Defence and the local community. In this regard, the
committee acknowledges the efforts made by Defence to disseminate information
on business opportunities as a result of the Cultana Training Area Expansion
Project as well as the efforts by the Tier 1 contractor St Hilliers to engage
with the local community. The committee appreciates the view expressed by
Defence representatives at the hearing that they recognise using local
contractors or subcontractors or sourcing local suppliers is synonymous with
getting value for money.
3.5
The committee was also encouraged to hear Defence indicate that the take
away message from the hearing was 'that we need to try to be better at
providing visibility about what is going on and where [to] go to get more
information'.[1]
3.6
The committee heard from people satisfied with the level of
communication from Defence and others about business opportunities, and those
who feel they need more information. However, communication needs to be a two
way street. Defence will require clear contact points who will be able to
disseminate and coordinate information for the local community. The committee
discussed with witnesses whether such this contact point or group could also
facilitate the collection of data to supplement information about local skills
and capabilities.[2]
3.7
The committee recognises that each area has its own communication mechanisms
and it is not for the committee to tell local communities how to best organise
them. The committee considered that there were a number of mechanisms in
existence which could, with support, form solid platforms for ongoing
communication and coordination across the region for Defence and others.
3.8
The committee was pleased to hear of the new initiative to bring
together significant stakeholders from the region and develop a coordination
framework. This forum held its first workshop in May 2017 and includes
participation from the RDAs, AusIndustry, chambers of commerce and industry,
local government, the Department of State Development and Defence. Defence
appears to be engaged with this forum to provide information about sector
opportunities that are relevant to the region and also key contacts. It would
seem to the committee that this group will go a long way to addressing the
coordination and dissemination of information issues and supports Defence's continued
involvement.
3.9
The committee hopes this forum could also be used as a conduit to
provide Defence and contractors with information on the local businesses,
skills and capacity in the region. Ensuring local business is in the best
position to take advantage of commercial opportunities to engage with Defence
will require support. The forum could draw on other expertise as required,
through engaging with the Office of the Industry Advocate and the new Centre
for Defence Industry Capability to provide training and capacity building as
required.
3.10
The committee encourages this forum to learn from strategies initiated
in other sectors to strengthen opportunities for collaboration across businesses
companies. These could be explored for use in relation to Defence
opportunities. The committee also notes the Cultana Expansion Area
Environmental Advisory Committee, which includes Defence, will address emerging
issues from a community or environmental perspective.[3]
Local initiatives
3.11
The experiences of several witnesses affirmed the importance of going
beyond information-sharing to develop concrete progress toward collaboration. The
committee received evidence concerning a range of initiatives which could assist
local businesses. These included:
-
businesses connecting directly with Tier 1 contractors;
-
the labour pooling initiative which is helping business maintain
the important contracts in the local area while exploring opportunities for
future work; and
-
raising awareness for businesses that, as subcontractors, they could
offer what they can provide rather than assume they have to fulfil a whole
contract.
SA industry advocate
3.12
The committee commends the establishment of the Industry Advocate in
South Australia and the willingness of this office to engage at national, state
and regional levels.
Recommendation 1
3.13
The committee recommends that Defence engage with the Office of the
Industry Advocate to investigate opportunities for events or workshops which
also include regional areas and local businesses.
Exercises
3.14
The committee acknowledges that Defence is making a concerted effort to
provide information to local communities about exercises, but there seem to be
challenges in contacting Defence when the exercise has ended. Apart from the
apparently temporary liaison officer for Exercise Hamel-16, it appears Defence
has no point of contact permanently located in the area to facilitate
relationships for the training exercises expected to be conducted at Cultana on
a regular, if intermittent, basis.
3.15
The committee understands that it may not be possible to have a contact
point on the ground at all times in areas where there is not an ongoing Defence
presence, but nominating a position for contact and disseminating that information
regularly would seem to be a useful step in establishing and maintaining a good
relationship with the local community.
3.16
Other coordination activities should also be considered. For example, the
debrief referred to by Mr Stuppos following Operation Hamel appears to have
been an internal meeting.[4]
The committee sees value in the suggestion by Dr Johnson of a formal post
exercise debrief with community representatives to discuss lessons learned and
possible improvements.[5]
Recommendation 2
3.17
The committee recommends that Defence review its formal mechanisms for
communication and coordination in the Upper Spencer Gulf region to ensure:
-
the most effective flow of information including plans which may
generate potential business opportunities;
-
as much information about upcoming training exercises is being
disseminated to the local community with as much advance notice as possible; and
-
that a contact point regarding local exercises is available on an
ongoing basis and that this information is disseminated regularly.
Recommendation 3
3.18
The committee recommends that Defence hold a post exercise debrief with
the local community representatives on a trial basis and then, in consultation,
evaluate whether it would be useful for stakeholders on an ongoing basis.
3.19
The committee understands the frustration felt by some local business
regarding Defence exercises. While appreciative of the unexpected surge in
business, local businesses reported their disappointment that they had little
forewarning and so they were unable to maximise this opportunity. Advance
notice is critical to allow local shop-owners and business to prepare supplies.
The committee was pleased to hear that an agreement has recently been
negotiated to provide more notice.
Purchasing foodstuffs
3.20
The committee believes that it is important for the government's intent
of engaging with SMEs to be clearly reflected in agency instructions. While the
committee accepts that the intention of Defgram 218/2017 is to inform staff of
the re-tendering of the standing panel and encourage its use, it is concerned
that the wording used does not inadvertently discourage staff from using the
ability to purchase locally as required.
Recommendation 4
3.21
The committee recommends that Defence review Defgram 218/2017 to clarify
or issue supplementary guidance to staff that local purchases outside the
Standing Offer Panel is also encouraged as required.
Current Commonwealth procurement
framework
3.22
The committee recognises the limitations of the current Commonwealth
procurement framework and wishes to look more closely at the South Australian
model and its applicability to Commonwealth procurement. The committee asked
Defence to review the evidence from the Industry Advocate and advise the
committee whether the model could be applied in Defence. The committee
appreciates the willingness of Defence to engage with this model and the
willingness of the Industry Advocate to engage with Defence.
3.23
The committee notes the recent work of the Joint Select Committee on
Government Procurement which was established to inquire into the Commonwealth
Procurement Framework, particularly the amended CPRs. The Joint Select Committee
recommended the formation of an independent Industry Participation Advocate
modelled on the South Australian system to facilitate consideration of
Australian economic benefit required by clause 10.30 of the CPRs.[6]
3.24
The Joint Select Committee also recommended that rural and regional
small and medium businesses be added to the list of exemptions under Appendix
A: Exemptions from Division 2 of the Commonwealth Procurement Rules.[7]
3.25
The committee will review the work of the Joint Select Committee and consider
further work to explore the applicability of the South Australian model and the
other relevant recommendations made by the Joint Select Committee. The
committee will return to this issue in another report.
Regional information
3.26
The committee agrees that there should be a greater level of visibility
and transparency of Defence engagement with the local communities. National
figures mean little to the local areas. The committee notes that Defence was
able to provide the committee with some information breaking down contracts by
region and took on notice to provide further breakdowns.
3.27
Defence also indicated that it will be able to track regional
information regarding the Cultana expansion project through St Hilliers as the
prime contractors and their subcontracting processes.[8]
3.28
As the regional information appears to be available or at least able to
be sourced, the committee considers that making this information available for
local communities will assist with their relationship with Defence.
Recommendation 5
3.29
The committee recommends that Defence make information available to
local communities about Defence expenditure in the area. In consultation, with
the local community, Defence should consider how best to present and
disseminate this information.
Senator Alex
Gallacher
Chair
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