Why CQ businesses are missing out on Defence contracts
CENTRAL Queensland businesses have limited opportunity to grab major Australian Defence Force contracts and it all comes down to definitions.
Livingstone Shire Council director of strategic growth and development Debra Howe raised the problems at the inquiry into the impact of Defence training activities and facilities on rural and regional communities in Rockhampton yesterday.
She said she had attended meetings with Defence in Brisbane to find out how CQ businesses could get big contracts for CQ exercises.
Ms Howe said it came down to the inability of CQ businesses to meet the ADF Tier 1 and 2 business level set out in the criteria for such contracts.
The Livingstone Shire Council submission document to the inquiry states "at present, there are only limited Defence services opportunities and no major prime Defence businesses or Tier 1 or Tier 2 providers located within the Capricorn Coast region”.
"It is imperative that a process is put in place by Defence whereby Tier 1or Tier 2 providers must source local supply where possible,” the submission said.
The submission refers to the most recent statistics the council could find on Australian-based Defence opportunities from 2009/2010 showed 70% of Defence material was sourced from eight prime contractors in Australia including Thales, BAE systems, Boeing Australia and Australian Aerospace.
The remaining 30% were subcontracted to smaller firms within Australia and overseas.
The inquiry heard the big companies get awarded the contract and they then look for 'the cheapest' local business to subcontract to do the work locally.
Livingstone Shire Council submitted the process be streamlined and ensure that local suppliers are given a fair opportunity and ideally preferential consideration in the contract tender process.
This included the defence force redefining the definition of 'local' and changing it to include being within, for example, 200km of the defence facility.
"We have councils that due to the economic downturn in the region, in the past five years that I've been here, have changed their definitions of what is local,” Capricornia Chamber of Commerce president Peter Fraser said.
"I know many businesses who won't put their hand up for defence contacts because they feel they don't have a chance.”