Assessing Workforce Risks in Defence amid the Closure of the Dept of Finance People Panel Phase 3 RFT

The closure of the Department of Finance People Panel Phase 3 Request for Tender (RFT) signals a critical turning point for Australia’s Defence sector. As the deadline approaches, stakeholders must understand the vital role that workforce contracts play in shaping future capabilities. With global threats evolving, important questions emerge: What risks lie ahead for Defence, and how can we find reliable alternatives to maintain operational effectiveness? Assuming the planned Defence Capability Support Panel is released and suitable companies qualify, there is some hope for agile, outcomes based support to Defence, but what if it is not?

As Australia faces complex challenges on the international stage, the heavy reliance on extensive workforce contracts needs fresh examination. Presently, many large contracts do not directly contribute to improvements in warfighting capability. For instance, a reported 20% of Defence spending on workforce contracts has not led to corresponding enhancements in operational efficiency. This disconnect could seriously undermine long-term Defence initiatives.

Let's hope the numerous feedback inputs to Defence have been considered

Defence procurement is becoming ever more complex. Price-fixing, collusion, and ineffective supply chain management are real and significant threats, with companies before the courts recently. Realising these risks in workforce could inflate project costs by as much as 30%. This not only erodes the foundation of supply and demand but also risks the integrity of Defence operations.

It is crucial for Defence to adopt a tough stance against any contractors compromising the supply chain's integrity. Unchecked practices can lead to higher costs and reduce overall resource efficiency. By failing to act decisively, Defence risks diminishing its bargaining power, potentially impacting force readiness and operational strength.

Additionally, as the Department of Finance moves forward, it is vital to clarify expectations and focus on sustainable performance contracts. Transitioning to outcome-based contracts rather than traditional volume-based contracts can lead to better resource allocation. For example, a case study from the UK’s Ministry of Defence demonstrated that an outcome-focused approach resulted in a 15% improvement in operational readiness. By prioritising tangible results, Defence can ensure that workforce capabilities translate directly into measurable military performance improvements.

Defence stakeholders must improve oversight and scrutiny of both subcontractors and primary suppliers. To build a more resilient Defence supply chain, vigilance in monitoring all dealings is necessary. This vigilance should include a readiness to adapt practices and form partnerships that closely align with overall operational goals.

Eye-level view of a military base emphasizing logistical operations

The closure of the Dept of Finance People Panel Phase 3 RFT underscores the delicate balance needed in managing Defence workforce contracts. As workforce risks loom large, it is crucial that Defence avoids placing all its operational resources in a single approach. By adopting a comprehensive view of workforce management, aligning contracts with concrete capability improvements, and rigorously tackling unethical practices in the procurement process, Defence can better prepare for the future challenges.

The urgent need for a thoughtful reassessment is clear, and the decisions taken now will influence Australia's Defence readiness in the unpredictable realities of tomorrow.