Minister for Defence Richard Marles has announced a significant reform to the Department of Defence, which will see the formation of a new independent procurement agency to replace three existing groups.
The Capability Acquisition and Sustainment Group, Guided Weapons and Explosives Ordnance Group, and Naval Shipbuilding and Sustainment Group will be merged into a single entity on 1 July 2026, which will initially be known as the Defence Delivery Group (DDG).
The three groups are currently responsible for nearly 40 percent of defence spending, according to the ABC.
Exactly a year later, on 1 July 2027, the DDG will transition into the autonomous Defence Delivery Agency (DDA), which will report to the Minister for Defence and the Minister for Defence Industry, while being headed up by the National Armaments Director – a newly-created position.
The reform, which has been called the biggest in 50 years, is linked to record-breaking defence spending, with the Department of Defence struggling to fight widely reported cost blowouts and major project delays.
The Department of Defence currently has a budget of almost $60 billion a year, which is set to rise to around $100 billion annually by 2034.
Addressing the press yesterday, Marles said the establishment of the DDA will see a “much bigger bang for buck for the defence spend”.
“It puts a focus on delivery and will ensure that it is much more sharp in the way in which it is undertaken,” he said.
“It will mean that advice comes to government much earlier in the process about the challenges that are facing any particular program, any particular project, so that we can ensure those projects are delivered on time and on budget.
“This is one of the most significant reforms to defence that we have seen. It will greatly change the way that defence operates.”
Under the new structure, once a capability need is identified, it will be assigned to the DDA along with a budget, who will be tasked with delivering the project on time and within budgetary constraints.
Also speaking at yesterday’s press conference, Minister for Defence Industry, Pat Conroy, said the DDA will have strong industrial and commercial skills, pulling the “best and brightest” from the private sector to complement the strong public sector expertise that already resides in these three groups.
“It will have direct control of funding. As I said, this will lead to better project management, better change discipline and greater accountability,” he said.
“This agency will also provide advice on acquisition strategy at first pass approval and will provide advice on acquisition strategy – the commercial realities of projects – on capability submissions at second pass.
“And finally, it will be complemented by what Richard already alluded to, which is the centralisation, standardisation and further professionalisation of capability development under the Vice Chief of the Defence Force.”
Conroy also told reporters that the number of complex defence projects is on the rise, increasing from 27 percent 15 years ago to almost 60 percent today. He noted that when he took on his current role, 28 major projects were running a combined total of 97 years late.
However, detractors have taken a swipe at the announcement, with Greens Senator David Shoebridge saying it would amount to little.
“Of course there must be independent oversight of defence procurement. However, reporting to the Minister of Defence is hardly independent,” he said.
“The same group of people who have overseen defence’s procurement mess are the same people who will head this new agency. That is not fixing an issue, it’s just moving it along and popping a different name tag on it.”
