Defence Industrial Policies and Their Impact on Acquisition Outcomes: A Comparative Analysis of the United Kingdom and Australia
Abstract
The aim of this paper is to compare and contrast a key aspect of the defence industrial policies of the United Kingdom and Australia and reflect on the extent to which those defence industrial policies have had implications for acquisition outcomes. Both Australia and the UK articulate explicit defence industry priorities or preferences (i.e. capabilities the government regards as "essential"). In Australia, their latest incarnation is the so-called Priority Industry Capabilities (PICs). In the United Kingdom, those industrial capabilities were expressed in the 2005 Defence Industrial Strategy and the UK MOD's Defence Innovation Strategy. In the UK, changes in defence industry priorities are likely in 2012. We hypothesise that defence industry policy in the form of pursuing the creation or preservation of stated industry capability priorities can indeed influence procurement decisions and acquisition outcome. We argue (1) If governments stand by their rhetoric on local preference, they will often have to pay a price premium compared with cost-efficient overseas sourcing (2) If shrinking defence budgets lead governments go for cost-efficient supply, they may - probably will - have to renege on their rhetoric about local work. We explore the procurement implications of the tension between policy to sustain domestic defence industrial capabilities, given its costs and budgetary implications, and acquisition that optimises price, quality and delivery, however and wherever achieved. The empirical core of the paper traces the nature and evolution of and reasons for priority-oriented industry policy in the cases of Australia and the UK. Our paper examines: (a) how defence industrial capabilities are expressed; (b) what the priorities actually are in each country; (c) why each country says it has such priorities; (d) whether the priorities have changed; (e) how the priorities were determined.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 2012
- Accession Number
- ADA581951
Entities
People
- Andrew D. James
- Peter Hall
Organizations
- University of New South Wales