The Department of Defence is the Australian Government's largest procurer. Successive Australian governments have encouraged the involvement of domestic industries in Defence procurement to develop and maintain the industrial base, secure supply chains, and promote employment and economic growth. 

This audit was undertaken to provide the Parliament with independent assurance on the effectiveness of Defence’s arrangements to deliver Australian industry policy outcomes through its contractual arrangements with its suppliers.

Key findings

1. Defence has not maximised Australian industry participation through the administration of its contracts.
2. Defence’s administrative arrangements for maximising Australian industry participation through its procurement and contracting activities are partly fit for purpose.
3. Defence has not implemented applicable contracting requirements effectively.
4. Defence’s governance, assurance and reporting arrangements for industry participation are partly appropriate.
5. Effective implementation of the next iteration of Australian defence industry contracting policy will require appropriate administrative and IT support systems, including sound procurement controls and contract management activities.