The Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT) is inviting written submissions to a new inquiry into Australia’s Defence contract arrangements.
The inquiry, which comes barely a month after the government announced a sweeping review into Australia’s Defence capabilities, will pick up on the findings of a previous parliamentary inquiry, and an auditor-general’s report that found The Defence Industry Security Program (DISP) had been underperforming.
DISP is a security compliance program that ensures all Defence contractors meet required security standards. As of March 2021, Defence reported it had more than 16,000 active contracts, with a total value of over $200 billion.
Last year, the Joint Committee of Public Accounts and Audit (JCPAA) found Defence was “not able to provide the level of confidence or assurance the committee required” that their monitoring and compliance systems for DISP was up to standard.
Following this, an Australian National Audit Office’s (ANAO) report into DISP found that while Defence had developed a clear framework for defining security requirements, its implementation had only been partially effective.
Auditor-general Grant Hehir said Defence’s processing of applications had been too slow for Australia’s current strategic demands, and that DISP was being under-administered.
“Defence does not know which of its active contracts should, or do, require the contracted entity to have DISP membership, a situation that limits the effectiveness of DISP as a security control.”
“Contract managers are not provided with relevant information to help them monitor and manage contractor compliance with contracted DISP requirements.”
The report further found that although Defence recognised the security risk, it had not implemented a framework for managing non-compliance.
Defence agreed to the report’s six recommendations, stating the department was working in partnership with industry to improve policies, practices and outcomes.
“Defence is confident that it will continue to build on the improvements gained through the first half of 2021, with improved systems, processes and engagement for the DISP.”
“The program periodically checks that DISP members are meeting security standards, and a cooperative ‘uplift’ component within the program supports defence industry to improve security resilience when and where needed.”
Defence subcommittee chair Julian Hill said the committee had decided to exercise its oversight powers by conducting a public review of the auditor-general’s recommendations in relation to the DISP.
“The auditor-general raised serious concerns regarding defence’s implementation of the DISP, and management of non-compliance which is fundamental to assuring the security of defence’s people, information and assets,” he said.
“Defence had not established fit-for-purpose arrangements to monitor compliance with contracted DISP requirements.
“The committee will examine defence’s progress in implementing the six primary recommendations it committed to a year ago.”
Submissions to the inquiry close 4 November 2022.
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