DMO Commercial Group Defence Watch Presentation Mr Harry Dunstall 2 October 2012

Transcription

1 Negtiatin Cell DMO has respnsibility fr negtiating and delivering a significant prtfli f acquisitin, supply and thrugh-life supprt cntacts fr military equipment. At any given time the DMO has in excess f $AUD20 billin f cntracts under management. On an annual basis the DMO engages in the negtiatin and signature f tens f thusands f cntracts, entering int arund 2,500 cntracts wrth $AUD100,000 r mre in a typical financial year. CEO DMO has highlighted a requirement t significantly imprve the DMO s perfrmance and reach a best practice level with respect t cmmercial negtiatins. This is critical t the success f the DMO missin fr Gvernment. The CEO has identified an pprtunity t imprve the way in which the DMO appraches and cnducts negtiatins thrugh the establishment f a DMO Negtiatin Cell. The establishment f the Negtiatin Cell is ne f the CEO s key pririties and will be a catalyst fr achieving and maintaining a best practice apprach t cmmercial negtiatins within the DMO. When fully established, it will: prvide DMO prject teams and line management with assistance in the preparatin and cnduct f negtiatins, including the cnduct f independent reviews f negtiatin preparatins; establish and maintain a framewrk fr managing a virtual team f negtiatin specialists drawn frm areas within the DMO and externally t supplement negtiatin teams and prvide mentring assistance t lead negtiatrs; establish and maintain a standardised suite f training fr all DMO persnnel; invlved in negtiatin; and establish and maintain plicies and prcedures relating t negtiatins, including career develpment paths fr negtiatin specialists. The Negtiatin Cell will be cmprised f a small team f permanent members, with access t a virtual team f highly skilled resurces drawn frm the DMO peratinal divisins and externally frm industry.

2 Defence and Industry IP Wrking Grup (DIIPWG) Backgrund: Defence industry, thrugh the Australian Industry Grup, raised a number f issues in relatin t the current Intellectual Prperty and Technical Data apprach taken in the ASDEFCON suite f cntracting templates. Defence has als had cntinuing prblems with the Intellectual Prperty and Technical Data prvisins in the ASDEFCON templates and agreed that they shuld be reviewed and recast, with a much greater fcus n Technical Data. As a result, the Defence and Industry Intellectual Prperty Wrking Grup was cnstituted t prvide a frum in which representatives frm Industry and Defence will explre key Intellectual Prperty and Technical Data issues and then develp practical slutins fr their treatment in the ASDEFCON templates. This will be supprted by the develpment f guidance material, training and imprved management prcesses such as cnducting a Technical Data Requirements Analysis (TDRA). An imprved baseline ASDEFCON template psitin shuld facilitate an imprved negtiatin prcess and utcmes. DIIPWG Structure and Apprach: Stage 1 Preliminary Discussins (cmpleted) Key issues relating t Intellectual Prperty and Technical Data and its management have been scialised within the wrking grup and the appraches t the treatment f Intellectual Prperty and Technical Data in ther jurisdictins the US, UK and Sweden have been cnsidered. Stage 2 Develpment f Guiding Principles and a Framewrk Paper (nearing cmpletin) The Guiding Principles set ut six key bjectives: 1. Imprve Defence and Industry s mutual understanding f Technical Data and assciated Intellectual Prperty rights required t achieve an apprpriate balance between Defence s capability requirements and the prtectin f Industry s legitimate interests. 2. Recgnise the nature and effect f the different frms f Intellectual Prperty fr example, that in Defence cntracts, cpyright will be the primary frm f IP right required by Defence t achieve capability requirements. 3. Clarify and strengthen the understanding f the relatinship between Technical Data and Intellectual Prperty fr example by defining Technical Data requirements and assciated IP rights by reference t the utcme f the Technical Data Requirements Analysis. 4. Imprve apprach t wnership and licensing fr example, establish and agree with Industry defined baseline cre categries f IP licences required by Defence, ptentially including: Australian Defence Rights, an agreed licensing regime t apply t agreed essential categries f Technical Data, r ther types f Technical Data identified in the Technical Data Requirements Analysis as requiring a licence f this nature; and mre restricted licensing arrangements t apply with respect t ther categries f Technical Data, r fr Deliverables ther than Technical Data.

3 5. Implement a fair and reasnable apprach t Intellectual Prperty prtectin and remedies. 6. Imprve Technical Data and Intellectual Prperty management practices. The purpse f the framewrk paper is t utline hw the Guiding Principles will be used t guide and infrm: 1. The drafting f revised Intellectual Prperty and Technical Data clauses in the ASDEFCON templates; and 2. The develpment f the methdlgy and prcess fr cnducting a Technical Data Requirements Analysis. Stage 3 Develpment f ASDEFCON IP / TD prvisins, TDRA template and guidance/plicy material This stage is anticipated t cmmence in Nvember and cntinue thrugh t February 2013 Stage 4 Agreement f the revised IP / TD apprach This stage is anticipated t cmmence in February 2013 and cntinue thrugh t April 2013.

4 Apprved Cntractr Insurance Prgram (ACIP) Initiative Launched: 20 August 2012 under DPPI 10/2012 Purpse: T imprve the management f cntractual insurance requirements and t reduce transactin csts (including cst f tendering) fr bth Defence and Industry. Apprach: Centralised review by nminated persns within the Office f Special Cunsel (cllectively referred t as the ACIP Management Team) and subsequent apprval (prequalificatin) f participating Defence cmpanies glbal/grup and lcal insurance prgrams. Pre-qualificatin is recgnised by: the granting f Apprved Cntractr Insurance Prgram status deeming the Apprved Cntractr Insurance Prgram as cmpliant with individual cntract insurance requirements (subject t any stand-alne prject-specific insurance requirements). Benefits: Streamlined management f insurance, specifically: Industry reducing tender data (insurance TDR) and cntract data (certificates f currency) deliverable requirements DMO prjects reducing tender evaluatin, cntract negtiatin and cntract management effrt thrugh the prvisin by the ACIP Management Team f an assurance reprt that the tendered insurances are within the scpe f the Apprved Cntractr Insurance Prgram, align with the cntract insurance requirements, and that these in turn align with the liability risk assessment. ACIP Management Team will nly prvide an assurance reprt where ne r mre cntract insurances exceed a threshld f $25m r invlve aviatin r marine insurances. Belw this threshld, DMO will accept cmpliance at face value Imprved risk management by DMO f insurable risks that arise ut f the perfrmance f cntracts. Greater transparency t the ACIP Management Team f participating Defence cmpanies glbal/grup insurance plicies. Develpment f a crprate level relatinship between the ACIP Management Team and participating Defence cmpanies glbal risk and insurance managers. Standardisatin the ACIP Management Team will perfrm sme functins previusly decentralised and will be the pint f apprval fr making any material changes t the ASDEFCON insurance clauses. Parameters: Participatin by Defence cmpanies is vluntary and it is envisaged that nly the tp dzen r s prime cntractrs wh cntract regularly with Defence will benefit frm and therefre seek pre-qualificatin. The review prcess has resurce csts fr bth DMO and participating cmpanies, s diminishing returns in applying this Initiative belw a certain scale. It is a cnditin f having their insurance prgrams pre-qualified that Defence cmpanies ntify the ACIP Management Team f any material adverse changes, events, claims and renewals t their insurance prgrams, and that their insurance prgrams are subject t further peridic reviews. The ACIP Management Team will maintain the cnfidentiality f Defence cmpanies insurance plicies by keeping the infrmatin btained clsely held the details will nt be made available t prjects and their advisers. The ACIP Initiative des nt: alter the prject s respnsibility t undertake a Liability Risk Assessment in rder t identify cntract specific risks and determine apprpriate cntract insurance cver

5 and insurance limits f indemnity. The assessment f these risks must nt be influenced by what cver and limits may be available under an Apprved Cntractr Insurance Prgram it is the Liability Risk Assessment which drives cntract insurance requirements (subject t verall value fr mney), nt what insurance cver happens t be available remve the need t require stand-alne prject specific insurance where a risk is nt cvered by the Apprved Cntractr Insurance Prgram remve the need t capture insurance requirements in request dcumentatin and the cntract benchmark cntractrs insurance prgrams Applies t DMO cmplex and strategic prcurements Defence cmpanies with ACIP status: Fur cntractrs have been granted Apprved Cntractr Insurance Prgram status. These are BAE Systems, Being Defence Australia, Raythen Australia and Saab Technlgies Australia. Implementatin and Supprt: ASDEFCON Insurance Handbk Mre detailed ASDEFCON insurance clauses have been develped t facilitate imprved specificatin f cntract insurance requirements. There are tw main versins (lngfrm fr the strategic ASDEFCON templates and shrt fr the mid-level ASDEFCON templates). The clauses prvide greater particularity f insurance requirements and the bligatins f cntractrs in respect f insurance. DMI(PROC) establishes the mandatry plicy requirements fr implementatin f the ACIP Initiative and the rle played by the ACIP Management Team in managing the Initiative. The ACIP Management Team will prvide supprt, with reach back t legal supprt. Webpage, including PwerPint presentatin verview.

6 Pririty Industry Capabilities (PICs) Update Fr sund strategic and financial reasns, the Gvernment is cmmitted t ensuring that certain strategic industry capabilities remain resident in Australia. The establishment PICs supprts this. PICs were first identified within Defence in 2008 thrugh a prcess which assessed the credible cntingencies where capability wuld be required as well as the pssible risks t ready and reliable supply. Steady prgress is being made twards the cmpletin f cmprehensive health assessments f all PICs and fully integrating the PIC cncept int Defence s planning prcesses. The findings f the first six PIC health reviews have nw been publicly released (Cmbat Clthing, Ship Dry Dcking and Cmmn User Facilities, Infantry Weapns, Acustic Technlgies and Systems, Signature Management, and Thrugh-Life and Real Time Supprt f Missin Critical and Safety Critical Sftware). The findings f a seventh PIC review int the High Frequency and Phased Array Radars PIC has been finalised and is expected t be released shrtly. Health reviews f the remaining five PICs (Electrnic Warfare, In-Service Supprt f Cllins Cmbat System, High-End and Systems-f-Systems Integratin, Selected Ballistic Munitins and Explsives, and Anti-Tampering Capabilities) are scheduled fr cmpletin by late 2012-early The PIC health reviews cmpleted t date have identified the need fr a number f interventin strategies. These have ranged frm bringing frward a Defence acquisitin r sustainment prject thrugh t changing cmmercial appraches t market, and assigning a PIC pririty in bidding fr grants under Defence skilling r innvatin prgrams. Hw t strengthen the links between PICs and Defence s range f prgrams fr industry skilling, innvatin and exprt marketing was recently reviewed thrugh a jint study by DMO and cnsultants, KPMG. The findings frm the review will shrtly be cnsidered by the Defence Industry Innvatin Bard (DIIB) with a view t determining hw verall prgram activity shuld be crdinated and funded. PICs have an imprtant rll t play in an industry plicy cntext and will be cnsidered in the preparatin f the frthcming Defence White Paper and assciated Industry Plicy Statement.