Defence ministers strengthen AIC

Defence will implement significant improvements to the Australian Industry Capability (AIC) Program so that opportunities for Australian industry are front and centre of Defence decision-making.
The Australian Standard for Defence Contracting (ASDEFCON) will also undergo a major revamp to cut process times and costs for Australian businesses.
Minister for Defence Senator Linda Reynolds said a genuine partnership with Defence and industry was critical to ensuring Australia’s industrial base effectively supports Australia’s national security, as reinforced in the 2020 Defence Strategic Update.
“Defence will strengthen the requirements for AIC in Defence contracts through additional contractual and non-contractual measures and will consult with industry on these changes over the coming months,” Minister Reynolds said.
The delivery of new AIC provisions in future contracts, creation of an Independent AIC Plan Audit Program, recent changes to Commonwealth Procurement Rules guidelines and an overhaul of the CDIC will significantly improve opportunities, protections and support for Australian businesses seeking to enter the Defence sector or looking to expand their footprint with Defence.
“Large companies will know that the Government expects them to honour their AIC commitments, and small businesses know the Government has their backs,” said Minister Reynolds. “Additional AIC provisions in future contracts will require companies to make specific and measurable commitments. Independent audit firms will then ensure large Defence companies are meeting their contracted Australian industry commitments. This will provide an additional level of confidence for Australian businesses.”
The new contractual provisions will be implemented from 1 January 2021 following industry consultation.
The review of ASDEFCON, to be overseen by Minister for Defence Industry Melissa Price, will aim to simplify and streamline contracting and subcontracting templates and remove unnecessary complexities that create additional burden on Australian businesses.