Door opens for small defence business players

Adequate monitoring will be crucial to the success of a new initiative to give small and medium sized businesses a bigger share of the Federal Government’s multi-billion dollar defence spend, industry groups say.

Large contractors will be required to show what extent they will engage local small and medium sized businesses in performing government defence work under a plan announced today by Parliamentary Secretary for Defence Procurement Greg Combet.

But past experience shows monitoring is required to ensure prime contractors maintain a role for small contractors after a tender has been awarded, according to key defence industry small and medium enterprise representative, the Australian Industry and Defence Network.

Executive director Sue Smith says Combet suggested in a speech today that prime contractors could face penalties if they don’t keep promises to involve smaller businesses.

“When a prime tenderer says they have six small and medium enterprises they will work with, they must actually involve them. In the past they wrote small and medium enterprises into the tenders and then just didn’t use them,” Smith says.

The AIDA will also lobby the Government to ensure that small and medium businesses’ intellectual property is protected if they’re included in a tender and then excluded from work down the track.

“Small and medium enterprises often divulge proprietary information to prime contractors on the basis that they’ll be used in the tender, then later they are dropped from the tender and the prime contractor uses the IP in-house,” Smith says.