Defence streamlines service provider arrangements

| February 7, 2018

The Minister for Defence Industry, the Hon Christopher Pyne MP, has announced that Defence has entered into Major Service Provider (MSP) agreements with four Australian industry led teams in order to engage with the rest of the industry more effectively.

Minister Pyne said the MSP agreements represent a fundamental change to how Defence’s Capability, Acquisition and Sustainment Group (CASG) service providers will work together to acquire and sustain capability for the Australian Defence Force (ADF).

The Major Service Providers will support CASG in tasks like workforce planning and management, industry and supply chain management, and longer term partnerships to better deliver capability.

“The agreement actively encourages healthy competition in the market, including fostering a viable and vibrant small-to-medium enterprise sector for ‘above the line’ subject matter expertise,” Minister Pyne said.

“Not only does this arrangement recognise industry’s importance as a fundamental input to capability, it will also deliver better value for money to the Commonwealth.”

Minister Pyne said this has been achieved through an interactive and competitive dialogue process with industry, including with the four successful MSP teams led by Jacobs Australia, Nova Systems Australia, Kellogg Brown & Root (KBR), and Downer EDI Engineering Power.

“The MSP agreement will also ensure an enhanced and sustainable capability exists within both Defence and industry to support current and future Commonwealth work requirements,” Minister Pyne said.

“All the MSPs provided a competitive price for the delivery of services and are committed to working with, growing, and developing the Australian Defence industry sector.”

By mid-2018 a further tranche of service provider arrangements will be delivered. The new Defence Services Support panel will make available the expertise of over 350 SMEs to support Defence in delivering capability.

A new vision for MSP relationships

The reforms form part of a revised model for the delivery of ‘above the line’ support services by the CASG as the delivery of MSP services requires a far more proactive, relationship driven interaction, with much higher levels of collaboration between CASG and industry than has been the case in the past.

The establishment of the Defence Support Services (DSS) Panel for the procurement of services in skill sets across the six CASG Centres of Expertise (CoEs) is an evolution of the current CAS-SS Panel and aims to achieve a more strategic and integrated approach.

The appointment of a small number of Major Service Providers should ensure they are capable of delivering larger, longer-term and more integrated work packages across the CASG domains and allow CASG greater visibility and control over market engagement and service delivery.

The new model should encourage healthy competition in the market, including fostering a viable and vibrant small to medium enterprise sector for SMEs with relevant subject matter expertise.

MSP Responsibilities

The MSP element of the procurement process, including development of the MSP model, was undertaken through an ongoing and interactive competitive dialogue with seven shortlisted participants, to ensure that the model considered both CASG and industry perspectives, and can deliver on the aims of both groups before the final four MSPs were selected.

The MSPs will offer a range of strategic, capability and integrated work partner services.

Strategic Partner services will include assisting the Commonwealth with workforce planning and management, industry and supply chain development and management, workforce development, and work package planning and development.

Capability Partner services will be provided primarily to CASG CoEs and include an agreed annual level of effort, notably in relation to pre- and immediately post-Gate Zero tasks.

Integrated Work Partner services will see larger and more complex Integrated Work Packages (IWPs) undertaken in terms of CASG Domains and CoEs.

The four successful MSPs involve partnerships between engineering and consulting firms. The Jacobs Beca Team involves Jacobs Australia and Beca Consultants, while Team Nova comprises Nova systems Australia, QinetiQ and PricewaterhouseCoopers Consulting. The KEY Team is made up of Kellog Brown & Root and EY and Team Downer is a partnership between Downer EDI Engineering Power, AGIS Group, DXC Technology Australia, Systra Scott Lister Australia, Envista, and Providence Consulting Group.

The winning tenders by these teams shared similar characteristics. All selected MSPs are Australian companies and each provided a competitive price for delivery of services. Each team committed to use SMEs within their workshare, including using small businesses on the DSS Panel.

All the teams committed to mentor and work with the Defence SME community to increase capability and capacity in the Defence industry and each committed to mentor and work with CASG to improve APS and military staff capability and capacity.

Smaller firms interested in working with the MSPs should contact the lead company in each case.