In early July 2009 a sourced tender was released for the further supply of combat uniforms for our defence force. Tenders closed in early August and the contract was let on 22 December 2009. Being a sourced rather than open tender, only two Australian manufacturers were involved on the basis that both had previously supplied the defence force.
The resulting contract to Australian Defence Apparel was for the manufacture of 120,000 combat uniforms at a cost of $A13.6 million at an approximate rate of 60,000 sets per year. The contract included an option for Australian Defence Apparel to source some of the fabric needed from a supplier in China (the Zhe Jiang Huili Dyeing and Finishing Company) rather than obtain all of it from the existing Australian manufacturer (Bruck Textiles in Wangaratta).
The fabric involved is specially designed and specially treated camouflage material unique to Australia, used only by the Australian Defence Force and until now manufactured only in Australia. Three types of ADF combat uniform are involved: Disruptive Pattern Camouflage Uniform (DPCU), Disruptive Pattern Desert Uniform (DPDU) and a fire-retardent version of DPCU.
Both DPCU and DPDU are predominantly worn by the Army and much of the Air Force (when operating on the ground) although Navy personnel sometimes wear DPCU, especially the fire-retardent version, when operating afloat and ashore tactically in littoral or amphibious operations (and DPDU when serving ashore in the Middle East).
The decision to source this fundamental type of defence materiel from an overseas supplier (even as fabric and not the finished article), however, contradicts a longstanding and well-proven principle concerning Australia's defence – including maintenance of a viable defence industrial capacity.
Beginning in 1888 with the creation of the Colonial Ammunition Company by the (pre-federation) Australian Federal Council, Australia has always sought to produce certain basic defence equipment from Australia-based manufacturers only. Federation in 1901 and the experiences of the two world wars brought renewed and sustained initiatives in this regard.
These basic items of equipment include small arms (rifles, pistols, machine guns, etc), ammunition, explosives, combat clothing and individual load-carrying equipment (webbing, packs, etc). In previous eras, and still too some extent now, they have also included preservation of limited capacities for naval shipbuilding and repair, aircraft assembly, the manufacture of artillery pieces and the assembly, manufacture or integration of electronic equipment such as combat systems, radios and radars.
In modern defence policy jargon, the national industrial capacities to produce such key items of defence force equipment are formally classified as Priority Industry Capabilities (PIC) by the Department of Defence. PIC are formally defined as "... those capabilities that confer an essential strategic advantage by being available from within Australia and which, if not available, would significantly undermine defence self-reliance and Australian Defence Force operational capability". Current PIC are endorsed by the Government and include combat clothing – as they effectively always have done.
For most of the 20th Century the factories, facilities and shipyards producing such key items were civil divisions of the Department of Defence and their workers were public servants.
The surviving ones are still primarily located in regional cities such as Lithgow, Bendigo and Wangaratta This is because when they were founded in the early 20th Century, largely before the advent of air forces or when such forces were in their infancy, these inland locations were well serviced by railways and considered to be more secure from foreign naval gunfire and seaborne raids. The small-arms factory at Lithgow was also strategically sited in that area to exploit nearby coal mines and the steelmaking facilities needed for the manufacture (generally under licence), modification and maintenance of small arms.
In pursuit of industrial efficiencies, financial savings and operational rationalisation these Defence-owned (but often commercially moribund) manufacturing facilities were corporatised as Australian Defence Industries in 1989 and privatised in 2001.
Since 2004 many of these facilities have been owned or operated by Thales Australia, an Australian subsidiary of the French company Thales. The former Commonwealth Government Clothing Factory in Bendigo on the other hand now operates independently as Australian Defence Apparel and also makes uniforms and protective clothing for various State Emergency Services and Rural Fire Services.
There are five enduring, tested and commonsense reasons why the design and production of combat uniforms (but not necessarily non-combat ADF uniforms) should remain included in the types of defence materiel limited to domestic Australian manufacture (and classified as a PIC by the Department of Defence).
- First, there are the operational security (OPSEC) implications of this particular PIC. These particularly include reducing the combat risk to ADF personnel by:
- protecting, as much as possible, the methods whereby the pattern and fabric deceive visual observation and other sensor systems that are likely to be deployed against our personnel in battle; and
- preventing potential adversaries from acquiring the ability to produce and deploy Australian uniforms, especially in large numbers, to illegally clothe substantial numbers of their personnel in such uniforms (contrary to the Geneva and Hague Conventions) for use in strategic and tactical deception operations, false-flag propaganda activities, outright attacks and other breaches of the Laws of Armed Conflict (LOAC).
- Second are the strategic security implications of, in effect, off-shoring part of a PIC. The chief one of these is ensuring continuity of supply should the international strategic situation ever deteriorate to the point where overseas supplies (from any country) cannot be accessed, or obtained easily or swiftly, because of political or military disruptions to manufacturing or supply chains – or even an ally having higher priorities to supply its own forces. These might include an inability or refusal to supply, delaying supply either actively or due to other priorities, the application of unilateral or multilateral trade sanctions purporting to ban supply, or military attack on our sea-lanes and airspace to prevent supply. Strategic implications also include Australia taking reasonable steps to minimise the scope for breaches of LOAC by any potential adversary.
- Third are the intellectual property (IP) implications of this particular PIC. Both DPCU and DPDU were developed by the Defence Science and Technology Organisation (DSTO) and incorporate technical and manufacturing characteristics that are unique to Australian operational and terrain requirements – and which required considerable effort, expense and proprietary scientific expertise by DSTO. These advantages go beyond the operational security aspects discussed above. They include the financial and technological aspects of IP and our national strategic ability to adapt and improvise such fabrics and uniforms (and the underlying technology) when required by fast-changing combat conditions.
- Fourth are the force mobilisation and preparedness implications of a PIC. If the ADF needs to be expanded suddenly, quickly or significantly, we must be able to scale up production of combat uniforms to match this urgency and scope, and we must retain the national industrial capacity to modify them swiftly and effectively as required.
- Finally, there are some national dignity and national responsibility implications. In strategic terms it would frankly be embarrassing internationally to clothe our defence force in foreign-produced combat uniforms and this would undoubtedly be eventually exploited by enemy propaganda. It is also likely to affect ADF morale detrimentally. Moreover, on a moral responsibility level, if we ask the men and women of our defence force to risk their lives or well-being on our behalf in combat then the least we can do for them is to clothe them appropriately, efficiently and with a truly Australian combat uniform.
The purported savings of $A1.5 million from the part-overseas manufacture option in the latest Australian Defence Apparel contract do not justify sacrificing any of the above principles and precepts concerning a PIC. In fact the relatively small savings sought (from an annual defence equipment procurement budget of around $A6 billion), demonstrate a serious loss of perspective about the support our defence force really needs from the Department of Defence and the country at large. Furthermore, saving $A1.5 million does not justify the increased risks to even one Australian soldier.
On Wednesday morning 10 February 2010 the Minister for Defence Personnel, Materiel and Science, Greg Combet, directed that the optional clause in the contract allowing supplementary foreign manufacture by a Chinese sub-contractor be rescinded and he issued a press release accordingly. This swift corrective action to reaffirm combat clothing is a PIC is supported by the Australia Defence Association and no doubt by most Australians after they grasp the strategic, operational and moral responsibilities involved. The Chief Executive Officer of the Defence Materiel Organisation (DMO) testified to a Senate committee later that morning that he became aware of the problem some ten days earlier. Thus far, the decision to award this type of contract has been attributed to a junior or mid-level public servant in the DMO.
The Minister's action therefore begs four questions not addressed in his press release cancelling the (luckily as yet unexercised) contract option for foreign manufacture:
- First, why did it take a newspaper story to prompt ministerial action?
- Second, why was the flawed decision taken to authorise foreign manufacture in the first place (contrary to combat clothing's classification as a PIC, contrary to long-established principle and practice and indeed contrary to commonsense)?
- Third, why has the political and bureaucratic quest for savings within the Defence budget been allowed to degenerate to the extent that it has become an apparent irrational fixation that over-rode well-known PIC requirements and longstanding, fundamental and proven principles of how we organise and resource our national defence and look after our defence force personnel?
- What will be done to restore appropriate checks and balances, and indeed commonsense, to departmental processes and accountabilities for materiel procurement (and much else)?
One likely underlying reason for these mistakes, of course, is that the Department of Defence is now so large, so organised in functionally-isolated silos, and with bureaucratic decision-makers often so divorced from professional military advice and empathy with, and understanding of, the frontline conditions of soldiering, that such a lack of commonsense and accountability was encouraged and rewarded — not prevented — by institutional and cultural safeguards.
A probable second reason, related to the first one, is Defence's burgeoning inability to retain, diffuse or exploit corporate knowledge.
This is largely due to constantly changing (and top-heavy) bureaucratic structures, a seeming process-driven addiction to ever-changing management fads and fashions, and a high turnover of personnel at all levels.
It is also yet another apparent result of an overall departmental structure (and culture) that continues to ignore the alternative of a first-principles approach to organising our national defence along proper constitutional and professional lines. Including proper civil control of the military by Ministers and Parliament rather than bureaucratic control by an unwieldy, ever-growing and too often unaccountable public service-military bureaucracy.