Department of Defence seeks industry feedback on draft AIC Enhanced Contractual Framework

The Draft AIC Enhanced Contractual Framework and related supporting artefacts are intended to provide specific and measurable AIC commitments that promote greater accountability for achieving the AIC objectives.

Defence has changed the approach for AIC from a ‘one-size-fits-all’ approach across its acquisition and sustainment contracting templates to a more flexible and scalable approach. This approach enables greater alignment with the unique aspects of each procurement, and is consistent with the view of defence industry as one of the fundamental inputs to capability.

The changes to be introduced by the new framework are directed at:

• better achieving Government’s and Defence’s requirements for maximising opportunities for Australian industry to participate in each procurement, while also recognising the core role of industry in delivering ADF Capability; and
• strengthening the contractual terms to ensure that these requirements are achieved through revised tendering processes and the inclusion of specific and measurable contractual commitments to enhance accountability.

Under the new framework, the key enhancements are to elevate AIC as a “core” clause with strengthened AIC obligations that contractors must comply with under contracts. To complement these obligations a new AIC remediation regime will be introduced.

The enhanced contractual framework will not be applied retrospectively. Defence will adopt a phased implementation approach across the ASDEFCON template suite from 1 January 2021.

The first package of draft documents (the AIC core package) is now available for consultation and comprises:

• updated Conditions of Tender, Conditions of Contract (and Glossary), and Statement of Work
• new Australian Contract Expenditure Measurement Rules
• extracts from relevant artefacts which describe the enhanced framework
   

The Australian Industry Capability (AIC) Program is designed to meet key objectives of the 2016 Defence and Industry Policy Statement (DIPS). In accordance with the DIPS, the AIC Program aims to:

• Provide opportunities for Australian companies to compete on merit for defence work within Australia and overseas.
• Influence foreign prime contractors and original equipment manufacturers, including Australian subsidiaries, to deliver cost-effective support.
• Facilitate transfer of technology and access to appropriate intellectual property rights.
• Encourage investment in Australian industry.