The Australian Defense Force (ADF) is about to embark on the largest disposal of military equipment since World War II–replacing or upgrading as much as 85 percent of its equipment over the next 15 years.
Minister for Defense Materiel Jason Clare in late June revealed reforms to the disposal of military equipment.
Separately, the ministry revealed plans for strengthening major program acquisition by the creation of an Independent Project Performance Office (IPPO).
As part of the effort over the next decade, Defense will dispose of: up to 24 ships; 70 combat aircraft; 110 other aircraft; 120 helicopters; 600 armored vehicles; 12,000 other vehicles; and a range of communications systems, weapons and explosive ordnance.
This represents 10 per cent of the current value of the entire Australian Government’s non-financial assets, the government said in a statement.
The disposal of military equipment provides an opportunity for Defense to generate revenue to be re-invested in new military equipment for Force 2030.
The British Government has generated more than $1 billion from its military equipment disposals since 1997, the Ministry of Defense said in a statement.
Over the same period and with a similar number and type of assets, the disposal of Australian military equipment has cost around $21 million.
“That’s why I am reforming Australia’s system of military disposals–to reduce costs, generate potential revenue and provide opportunities for Defense industry involvement,” Clare said.
The first opportunity for the Australian Defense industry will be the release of a Request for Proposals (RFP) for the disposal of up to 24 Navy ships across the coming decade, Clare said.
That includes HMAS Manoora, Adelaide-Class frigates and Mine Hunters.
The RFP will be done in two parts:
HMAS Manoora–submissions will close Sept. 15; and
All other ships–submissions will close on Oct. 14.
The latter part will provide the flexibility for companies to bid for all ships, a class of ships or a single ship.
Ideas could include, but are not limited to, dismantling the ships and recycling the parts and sale within Australia or overseas.
A plan to dispose of up to12,000 Army vehicles has also been approved. This includes Land Rovers, Unimog trucks and Mack trucks. This will likely see the sale of vehicles to companies that will repair and upgrade the vehicle and then on-sell them.
The RFP for the vehicle disposals will be released this month.
“By disposing of this equipment in bulk, it will increase the amount of revenue Defense can raise and reinvest in new equipment,” Clare said. “It also provides the scale, which gives real opportunities for business. The money raised from the sale of these vehicles will be invested in Force 2030, with one option being into simulators used for training that will reduce the wear and tear on Army vehicles.”
Historically significant pieces of military equipment will still be made available for preservation.
Clare and Minister for Defense Stephen Smith unveiled the IPPO which began operating July 1.
Establishing an IPPO was a recommendation of the Mortimer Review into Defense Procurement and Sustainment.
The IPPO will reside in the Defense Materiel Organization and will: conduct annual full diagnostic reviews (Gate Reviews) of all major Defense capital acquisition projects; Implement the new Early Indicator and Warning system announced by Smith and Clare May 6; implement the reforms announced today to the Project of Concern process and oversee the remediation of all Projects of Concern; implement a lessons learned process as recommended by the Mortimer Review to improve the way projects are delivered by learning from past mistakes and successes; and assist project teams to develop more robust cost and schedule information to improve the accuracy of this information when it is provided to the government.
An additional 14 independent experts with significant project management and commercial experience will be contracted by Defense to act as board members on Gate Reviews. This will ensure there are at least two external members on every significant Gate Review board.