r-- ~===:; 1ltem .r derrnce ministerial representation i€¦ · attachment a. a copy ofthe letter...

63
UNCLASSIFIED Kelly/MCJ3.(J00551 r FOI 337112/13 Reference: r--______________ 1 Australian Serial 1.1 MINISTERIAL REPRESENTATION Department .r Derrnce I I Date Dept Approved: Date Rec in Office: Date Due: For Action: Dr Kelly Through: VCDF For Info: Minister for Defence Secretary, CDF, VCDF, FASMECC. Sublect: Response to Correspondence from Ms Jill HaU MP (on behalf Regarding Concerns Relating to the Warehousing and Distributuion Contract Retender Purpose: To provide a response to Ms Jill Hall MP (on behalf off47 F in relation to concerns regarding employment implications for the employees of the current service provider associated with the renewal of the De artment of Defence Warehousin and Distribution contract. Key Points: I. On]9 February 2013, Ms Jill Hall MP, Federal Member for Shortland, wrote to the Hon Dr Mike KelJy MP (attachment A) on behalf ofm ]a BAE Systems Australia employee. In e-mail to Ms Hall (provided at attaclunent A), I expressed concerns relating to job security and the transfer of employee entitlements as' an outcome of the retender of the Department of Defence's Warehousing and Distribution (W&D) contract. 2. The following information is provided in response to the concerns raised __-, a) The current Defence Integrated Distribution System (DIDS) contract, and other local logistic services contracts. are due to expire on 30 June 2013. The DIDS contract will be replaced by two new national base logistics services contracts. These new contracts will cover W&D and Land Materiel Maintenance (LMM) services. b) A Request for Tender (RFn was released for W&D services on 29 June 2012. The tender closed on 22 October 20 I 2. c) The tender process is continuing, and is on schedule to have the new contractual arrangement in place by 30 June 2013. The outcomes of the W&D tender process have not yet concluded and remain Commercial-In-Confidence. The draft contract attached to the RFT for W&D Services included a contractual requirement that the successful contractor is to comply with the Australian Government's Fair Work Principles. d) In accordance with the RFT for W&D services and the Australian Government·s Fair Work Principles, compliance with the Fair Work Act 2009 is a condition of participation. e) The Fair Work Principles state that the Australian Government does not support the adoption of contracting arrangements that undermine the entitlements of employees, and that the Australian Government expects contractors to meet public expectations of fair and reasonable workplace practices in conducting their business. f) The transfer of business arrangements are regulated by the Fair Work Act and are largely the responsibility of the service providers. There is nothing in the RFT or draft contract that prec1udes such a transfer from occurring. The Commonwealth will neither facilitate nor hinder a transfer of business. as it is outside its powers to do so. Page 1 of 4 UNCLASSIFIED

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Page 1: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

UNCLASSIFIED KellyMCJ3(J00551 r

FOI 33711213Reference r--______________~===_1ltem 1

Australian Gcn~rnment Serial 11 MINISTERIAL REPRESENTATION Department r Derrnce I I

Date Dept Approved Date Rec in Office Date Due

For Action Dr Kelly Through VCDF For Info Minister for Defence Copi~5to Secretary CDF VCDF FASMECC

Sublect Response to Correspondence from Ms Jill HaU MP (on behalf of~7F Regarding Concerns Relating to the Warehousing and Distributuion Contract Retender

Purpose To provide a response to Ms Jill Hall MP (on behalf off47F ~ in relation to concerns regarding employment implications for the employees of the current service provider associated with the renewal of the De artment of Defence Warehousin and Distribution contract

Key Points

I On]9 February 2013 Ms Jill Hall MP Federal Member for Shortland wrote to the Hon Dr Mike KelJy MP (attachment A) on behalf ofm ]a BAE Systems Australia employee In ~ e-mail to Ms Hall (provided at attaclunent A) ~7F Iexpressed ~ concerns relating to job security and the transfer of employee entitlements as an outcome of the retender of the Department of Defences Warehousing and Distribution (WampD) contract

2 The following information is provided in response to the concerns raised by~amp7_F__-

a) The current Defence Integrated Distribution System (DIDS) contract and other local logistic services contracts are due to expire on 30 June 2013 The DIDS contract will be replaced by two new national base logistics services contracts These new contracts will cover WampD and Land Materiel Maintenance (LMM) services

b) A Request for Tender (RFn was released for WampD services on 29 June 2012 The tender closed on 22 October 20 I 2

c) The tender process is continuing and is on schedule to have the new contractual arrangement in place by 30 June 2013 The outcomes of the WampD tender process have not yet concluded and remain Commercial-In-Confidence The draft contract attached to the RFT for WampD Services included a contractual requirement that the successful contractor is to comply with the Australian Governments Fair Work Principles

d) In accordance with the RFT for WampD services and the Australian Governmentmiddots Fair Work Principles compliance with the Fair Work Act 2009 is a condition of participation

e) The Fair Work Principles state that the Australian Government does not support the adoption ofcontracting arrangements that undermine the entitlements ofemployees and that the Australian Government expects contractors to meet public expectations of fair and reasonable workplace practices in conducting their business

f) The transfer of business arrangements are regulated by the Fair Work Act and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that prec1udes such a transfer from occurring The Commonwealth will neither facilitate nor hinder a transfer of business as it is outside its powers to do so

Page 1 of 4

UNCLASSIFIED

UNCLASSIFIED KellyMC13-00055J

Reference

g) It is acknowledged that the outcome of this tender process may have employment implications for the current contractor workforce however this is a matter for the BAE Systems Australia and any future incumbent to manage

Key consi~erations relating to this matter are

a) RFT for LMM Services The tender process for LMM Services is also continuing and is on schedule to have new contractual arrangements in place by 30 June 2013 The outcome of this tender process may also have employment implications for the current contractor workforce

b) Confidentiality The details of both tender processes remain Commercial-In-Confidence and will remain so until the negotiations are concluded and contracts awarded

c) Previous Response You have reviously received correspondence raising similar concerns to those raised by 7F Attachment B (ClarelMC13-000296 dated 5 February 2013) details the information provided in response to an enquiry you received from Mr Paul Bastian National Secretary of the AustraHan Manufacturing Workers Union A copy of the letter responding to Mr Bastians concerns is provided at attachment C

Recommendations

That you

i Note that compliance with the Fair Work Act 2009 is a condition of participation in the RFT for WampD

Noted I Please Discuss

ii Note that transfer of business arrangements are regulated by the Fair Work Act and are largely the responsibil ity of the service providers

Noted I Please Discuss

iii Sign the letter to Jill Hall MP (attachment D) responding to the concerns raised in her letter of 19 February 2013

Signed I Not Signed

Approved By

CWTHOMAS Rear Admiral Royal Australian Navy Commander Joint Logistics

March 2013 Contact Officer Mr David McGahey Phone (03)9282 3709

Page 20f4

UNCLASSIFIED

i

UNCLASSIFIED KellyMe 13-000551

Reference

Primary Addressee

Mike Kelly I I

Information Addressee

Noted I Please Discuss

Stephen Smith I I

Resources

3 NA

Consultation

4 NA

Attachments

A Letter from Jill Hall MP to The Hon Dr Mike Kelly MP dated 19 February 2013

B Ministerial Representation MC 13-000296 dated 5 February 2013

C Letter from The Hon Dr Mike KeUy to Mr Paul Bastian of the AMWU dated 11 February 2013

D Draft letter to Ms Jill Hall MP

Page 3 of4

UNCLASSIFIED

26 Macquarie Street Belmont NSW 2280 PO Box 499 Belmont NSW 2280 Tollfree 1300301 792 Ph (02) 49479711 Fax (02) 49479722 Email JillHallMPaphgovau Web wwwjillhallcom

FOl337121319th February 2013 Item 1

Serial 12

Dr Mike KeJly MP Minister for Defence Materiel PO Box 6022 House of Representatives Parliament House canberra Acr 2600

It~ eeaffnster w

I wlsh to make representations on behalf of ~7F ~=wJ f7F J f47F conceming the renewal of the Department of Defence Warehousing and Distribution contract

r7F Ihas contacted me to express Ej concern about the ImplIcations for employees of the current contractor if another company Is awarded the new contract

1have enclosed a copy of ~ emalls to me In which are listed a number of issues that are worrying to him and his colleagues

1would appreciate your response to these issues and your advice as to any considerations for existing employees that might be included In the award of any new contract

Kind regards

Q ~ JI~P FBdBra NemiHJr forShortand lHmr

-p- ~----- ---~-- - -- ---- -bull- -- -- r- - - c-f --i-- -- ~

) ~ ~ ~ I ~~

Subject RE Defence Contract renewals ISEC=UNClASSIFJEDJ

UNCLASSIFIED

Hi Mark

Thank you for your quick response

p7F The contract will be awarded in April with a start dale of 01 July 13

If the current contractor (BAE Systems Austraiia) isn1 successful they will help in job interviews and allow time to apply for new jobs

This doesnt help with the uncertainty for the coming 6 months all our lives are put on hold

The general feeling is we all wont get our jobs back as the govemment has cut defence spending therefore whoever puts in the Cheapest quote will win and they will need to cut jObS stay profitable

Cheers[7F

IMPORT ANT This email remains the property of the Department of Defence and is subject 10 the jurisdiction of section 70 of the Crimes Act 1914 If you have received this email in error you are requested to contacr rhe sender and delete the email

-____--------__-- --- ~-------- __ -- _ ~-- ----- --- ---~----~ - --- _ From Raper Hark (J Hall HP) [malltQMarkBaoeraphgoyau] Sent TUesda 19 february 2013 1237 TQ~7F ] SUbject FW Defence contra~ renewals [SEC=UNaASSIFJED]

147F ]

Jill has asked me to follow up on your email

Jill would like to make representations on your behalf to the relevant Minister

While the contracting process Is likely to continue we can ask the Minister to address the issue about security of employment and entitlements and how these things are handled in any new contract

In the meantime would you be able to forward your address details in the electorate to enable Jill to write to you in response

Thanks

1

~ -shyParliament Hou~ P 02 627144921 F 02 6ln 8505 markra pertalaph govau

From HaU Jill (MP) Sent Tuesday 19 February 2013 1147 AM To Ra~r Mark (J Hall MP) Subject FW Defence contract renewals [SECUNCLASSIFIEDJ

Please follow up

Thanks

From~F Sent~ Ro=-=n-riiJa~y~(18~ 150 PM To Hall Jill (HPJ Subject Defence contract renewals [SECUNOASSIF[EO]

UNCLASSIFIED

Hi Jill

Could I express my concerns with the upcoming renewal of the Warehousing and Distribution contract with the Department of Defence

I understand there needs 10 be a renewal of the contract periodically however is there any consideration to the impact this has on the workforce involved if a different company wins the tender

Some of these changes that are affecting me are the uncertainty of job security making it hard to f7FI ]and loss of long service accrual with the current employer 0--____

at may result tna7F_____________________---J

Also I will have tEE Iyears of seNlce by the time the current contrad is LIp If the contract is awarded to a different company I may be able to get myoid job back however I will lese all my long seNice accrual not to mention

[lEJdays of sick leave accrued

When the contract is put out to tender in another B years II have to start again and why would a new company want to emplOYfZJyears young person when he may retire anytime within the next term

I believe that an earlier email I sent to Greg Combet should have been forwarded to you in relation to this issue from his offICe as your my member of pariiament

Cheers

147F BAE SYSTEMS

2

IMPORTANT This email remains the property of the Departrnent of Defence and is subject to the Jurisdiction of section 70 of the Crimes Act 1914 If you have received Ulis email in error you are requested to contact Ule sender and ltelele the email

3

Australian Government

Dqlartmenl or Ddence ----

UNCLASSIFIED ClarelMC13-000296

Reference JLCIOUT2013177

FOl3371213 MINISTERIAL REPRESENTATION litem 1 ________________J Serial 13

L-______J

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Materiel Througb VCDF

For Info MINDEF Copies to Secnlary C[)F V([)F FASMECC

Subject MINDM Response to Paul Bastian AMWU Regarding Emplovment Implications of Expiry of BAE Land Materiel Maintenance Contract

Purpose To provide a response to the concerns raised by the National Secretary AustraliWl MWlufacturing Workers Union regarding employment implications of the expiry of BAE Land Materiel MaintenWlce Contract

Key Points

I On 31 51 JWluary 2013 Mr Paul Bastion the National Secretary Australian Manufacturing Workers Union wrote to the Honourable Minister Jason Clare Minister of Parliament regarding employment implications of the expiry of Defences Land Materiel Maintenance Contract with BAE Systems Australia (BAESA) His concerns specifically relate 10 the potential impact on the BAESA workforce

2 The background to the re-tender of the ~d Materiel Maintenance Contract is provided at attachment A A copy of the letter from Mr Bastian is provided at attactunent B The letter was not copied to any other parties

3 In relation to the concerns raised by Mr Bastian Defence has engaged in regular consultation with union representatives regarding the potential impacts of the expiry of the connct on the Commonwealth workforce This engagement has not included discussions regarding BAESA employees as this is a matter for BAESA However the A WMU has been invited to and participated in following formal consultation activities

a) 29 June 2012 - Teleconference with Commander Joint Logistics (CJLOG) and CPSU APESMA NUWand AMWU This teleconference provided an overview of the Defence Logistics Transfonnation Program (DLTP) proposed commonwealth workforce reductions and timeframe for the consultation period

b) 14 August 2012 - Draft organisation structures with Ihe draft StaffTransition Plan (STP) were e-mailed tOlheCPSU APESMANUW and AMWU for comment An initial three week consultation period was provided however this was extended to five weeks at the request of the CPSu

c) 28 August 2012 - Updated documents (STP Wld orgWlisational struclures) along with an overview of feedback received to date was e-mailed to the CPSU APESMA NUW and AMWU

d) 3J August 2012 - A teleconference between CJLOG and tne NUW APESMA and AMWU occurred (CPSU did not attend) The meeting allowed the unions to provide feedback to CJLOG

Page 1 ofS

UNCLASSIFIED

UNCLASSIFIED ClareIMC 13-000296

Reference JLCOUT12013177

e) 5 September 2012 - An updated document that provided a Compilation of union and workforce feedback on the proposed changes was distributed to the CPSU APESMA NUW and AMWU

f) II October 2012 - A final meeting with the unions was held No objection was raised to the proposed structure Implementation was then commenced

4 As the Land Materiel Maintenance Services Retender process is currently ongoing confidentiality regarding its status must be tightly maintained until the negotiations are concluded and a contract awarded

Recommendations

That you

i Note that Defence has consulted with unions including the AMWU on the employment impHcations for the Commonwealth workforce related to the expiry of the Land Materiel Maintenance Contract with BAESA

Noted I Please Discuss

Ii Sign the letter to Mr Bastian responding to the concerns raised in his Jetter of31 January 2013

Signed I Not Signed

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

~ebruary 2013 Phone (03) 9282 7039 I Contact Officer Mr David McGahey

-------

Primary Addressee

Information Addressee

Noted I Please Discuss

Mike Kelly I I

Stephen Smith I I

Page 2 of8

UNCLASSIFIED

UNCLASSIFIED ClareMC13middot000296

Reference JLCOUT120 1377

Resources

5~ NA

Consultation

6 NA

Conflict of Interest

7 NA

Attachments

A Background

B Letter from Mr Paul Bastian to The Hon Jason Clare MP dated 31 January 2013

C Talking points

D Draft letter to Mr Paul Bastion from The Hon Dr Mike KeUy MP

Page 3 of8

UNCLASSIFJED

UNCLASSIFIED FOl3371213 Item 1

Attachment A Serial 14

BA CKGROUND INFORMATION - MINDM Response to Paul Bastian AMWU Regarding Employment Implications ofExpiry of

BAE Land Materiel Maintenallce Contract

1 A Request for Tender (RFT) was released for Land Materiel Maintenance (LMM) services on 29 June 2012 The tender closed on 24 September 2012

2 The tender process is continuing and on schedule to have new contractual arrangement in place by 30 June 2013 The outcomes of the LMM tender process have not yet concluded and remain Commercial-In-Confidence

3 The draft contract attached to the RFT for LMM Services included a contractual requirement that the successful contractor is to comply with Australian Governments Fair Work Principl es

4 In accordance with the RFT for LMM Services and the Australian Governments Fair Work Principles compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement

5 The Fair Work Principles state that the Australian Government does not support the adoption ofcontracting arrangements to undennine the entitlements ofemployees and that the Australian Government expects that in conduc~ing their businesses government contractors meet public expectations of fair and reasonable workplace practices

6 The transition ofbusiness arrangements is regulated by the Fair Work Act and there is nothing in the RFT or draft contract which precludes such a transition from occurring

UNCLASSIFIED

J-Halllet) 1- f FOl3371213 Item 1 Serial 15

31 January 2013

AMWUThe Hon Jason Clare MP Minister for Defence Materiel Parliament House Canberra ACT 2600 Email JasonClareMPaphgovau

Dear Minister Clare

Re EmRlo~ment Implications of Expiry of BAE Land Materiel Maintenance Contract

We write to seek your offices immediate advice and assistance in relallon to our members currenlly employed by BAE $ystems in delivering the Land Maleriel Maintenance contract to your Department

We have been advised by members from numerous sites that BAE Systems has been unsuccessful in Its bid for a new national contract to continue to supply this work and the current contract is set to expire on June 30 this year

Despite BAE management advising our Detegates that they have not been successful in the bid of the contract there has been no ormal briefing of the implications for workers and their families

As you can imagine this lack of information about their ongoing security of employment what this means for their future employment their entillements and whether they will be provided with transitional arrangements to the successful bidder is deeply troubling to our members their families and communities

To satisfy their Immediate concerns we are seeking an urgent meeting with you to gain an understanding of the following

bull the current status of the bidding process bull the transitional employment arrangements for current BAE workers that any successful

bidder will meet as part of being awarded the contract bull whether any job losses are anticipated as a result of the decision to appoint a Single service

provider for each sector to achieve efficient and effective deliverymiddot bull other assurances your office can provide to workers their families and communities about

their on-going employment status and bull whether this has wider implications for other defence contracts such as warehousing and

distribution contract

We will be in contact with your office to arrange a suitable meeting time

AUJl1I81in Manulaclul10g WQrioU~on

Regislerellllamp AFMEPKIU NationI OllIe Lllyel~

33 Parramalla Road GrnnYlUe NSW 2142 TelephlnO 02 esse 15to Fac5unlie 02881119274 allWUamwu No-U

sr1ationsl adminislralioncorresnational secreterynal see leners 13pb213D38doc

UNCLASSIFIED

FOl3371213 Item 1 Attachment C Serial 16

MINDM RESPONSE TO PAUL BASTIAN AMWU REGARDING EMPLOYMENT IMPLICA TIONS OF EXPIRY OF BAE LAND

MA TERIEL MAINTENANCE CONTRACT

MINISTERIAL TALKING POINTS bull If MINDM is asked the current status of the bidding process

Response The tender process is continuing and on schedule to

have new contractual arrangement in place by 30 June 2013 The

outcomes of the Land Materiel Maintenance tender process have not

yet concluded and remain Commercial-In-Confidence

bull IfMINDM is asked if there are wider implications for other

Defence such as warehousing and distribution

Response A RFT for Warehousing and Distribution closed on 24

September 2012 This tender process is continuing and remains

Commercial-In-Confidence The outcome of this tender process

may have employment implications for the current contractor

workforce

bull If MINDM is asked if any job losses are anticipated

Response Defence is limited to provide comment on the

Commonwealth workforce and any proposed changes within BAE

would be subject to comment from BAE Further comment is not

appropriate until the tender process has concluded

UNCLASSIFIED

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

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responsibility Rockhampton ~~ - ~~_ __

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I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

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4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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s47C

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

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I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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tRercrcnce ~CDFJQUTnOIIlao1

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i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

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Name ~ppoiDtme~t DTG

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

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  • 1pdf
  • 2pdf
Page 2: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

UNCLASSIFIED KellyMC13-00055J

Reference

g) It is acknowledged that the outcome of this tender process may have employment implications for the current contractor workforce however this is a matter for the BAE Systems Australia and any future incumbent to manage

Key consi~erations relating to this matter are

a) RFT for LMM Services The tender process for LMM Services is also continuing and is on schedule to have new contractual arrangements in place by 30 June 2013 The outcome of this tender process may also have employment implications for the current contractor workforce

b) Confidentiality The details of both tender processes remain Commercial-In-Confidence and will remain so until the negotiations are concluded and contracts awarded

c) Previous Response You have reviously received correspondence raising similar concerns to those raised by 7F Attachment B (ClarelMC13-000296 dated 5 February 2013) details the information provided in response to an enquiry you received from Mr Paul Bastian National Secretary of the AustraHan Manufacturing Workers Union A copy of the letter responding to Mr Bastians concerns is provided at attachment C

Recommendations

That you

i Note that compliance with the Fair Work Act 2009 is a condition of participation in the RFT for WampD

Noted I Please Discuss

ii Note that transfer of business arrangements are regulated by the Fair Work Act and are largely the responsibil ity of the service providers

Noted I Please Discuss

iii Sign the letter to Jill Hall MP (attachment D) responding to the concerns raised in her letter of 19 February 2013

Signed I Not Signed

Approved By

CWTHOMAS Rear Admiral Royal Australian Navy Commander Joint Logistics

March 2013 Contact Officer Mr David McGahey Phone (03)9282 3709

Page 20f4

UNCLASSIFIED

i

UNCLASSIFIED KellyMe 13-000551

Reference

Primary Addressee

Mike Kelly I I

Information Addressee

Noted I Please Discuss

Stephen Smith I I

Resources

3 NA

Consultation

4 NA

Attachments

A Letter from Jill Hall MP to The Hon Dr Mike Kelly MP dated 19 February 2013

B Ministerial Representation MC 13-000296 dated 5 February 2013

C Letter from The Hon Dr Mike KeUy to Mr Paul Bastian of the AMWU dated 11 February 2013

D Draft letter to Ms Jill Hall MP

Page 3 of4

UNCLASSIFIED

26 Macquarie Street Belmont NSW 2280 PO Box 499 Belmont NSW 2280 Tollfree 1300301 792 Ph (02) 49479711 Fax (02) 49479722 Email JillHallMPaphgovau Web wwwjillhallcom

FOl337121319th February 2013 Item 1

Serial 12

Dr Mike KeJly MP Minister for Defence Materiel PO Box 6022 House of Representatives Parliament House canberra Acr 2600

It~ eeaffnster w

I wlsh to make representations on behalf of ~7F ~=wJ f7F J f47F conceming the renewal of the Department of Defence Warehousing and Distribution contract

r7F Ihas contacted me to express Ej concern about the ImplIcations for employees of the current contractor if another company Is awarded the new contract

1have enclosed a copy of ~ emalls to me In which are listed a number of issues that are worrying to him and his colleagues

1would appreciate your response to these issues and your advice as to any considerations for existing employees that might be included In the award of any new contract

Kind regards

Q ~ JI~P FBdBra NemiHJr forShortand lHmr

-p- ~----- ---~-- - -- ---- -bull- -- -- r- - - c-f --i-- -- ~

) ~ ~ ~ I ~~

Subject RE Defence Contract renewals ISEC=UNClASSIFJEDJ

UNCLASSIFIED

Hi Mark

Thank you for your quick response

p7F The contract will be awarded in April with a start dale of 01 July 13

If the current contractor (BAE Systems Austraiia) isn1 successful they will help in job interviews and allow time to apply for new jobs

This doesnt help with the uncertainty for the coming 6 months all our lives are put on hold

The general feeling is we all wont get our jobs back as the govemment has cut defence spending therefore whoever puts in the Cheapest quote will win and they will need to cut jObS stay profitable

Cheers[7F

IMPORT ANT This email remains the property of the Department of Defence and is subject 10 the jurisdiction of section 70 of the Crimes Act 1914 If you have received this email in error you are requested to contacr rhe sender and delete the email

-____--------__-- --- ~-------- __ -- _ ~-- ----- --- ---~----~ - --- _ From Raper Hark (J Hall HP) [malltQMarkBaoeraphgoyau] Sent TUesda 19 february 2013 1237 TQ~7F ] SUbject FW Defence contra~ renewals [SEC=UNaASSIFJED]

147F ]

Jill has asked me to follow up on your email

Jill would like to make representations on your behalf to the relevant Minister

While the contracting process Is likely to continue we can ask the Minister to address the issue about security of employment and entitlements and how these things are handled in any new contract

In the meantime would you be able to forward your address details in the electorate to enable Jill to write to you in response

Thanks

1

~ -shyParliament Hou~ P 02 627144921 F 02 6ln 8505 markra pertalaph govau

From HaU Jill (MP) Sent Tuesday 19 February 2013 1147 AM To Ra~r Mark (J Hall MP) Subject FW Defence contract renewals [SECUNCLASSIFIEDJ

Please follow up

Thanks

From~F Sent~ Ro=-=n-riiJa~y~(18~ 150 PM To Hall Jill (HPJ Subject Defence contract renewals [SECUNOASSIF[EO]

UNCLASSIFIED

Hi Jill

Could I express my concerns with the upcoming renewal of the Warehousing and Distribution contract with the Department of Defence

I understand there needs 10 be a renewal of the contract periodically however is there any consideration to the impact this has on the workforce involved if a different company wins the tender

Some of these changes that are affecting me are the uncertainty of job security making it hard to f7FI ]and loss of long service accrual with the current employer 0--____

at may result tna7F_____________________---J

Also I will have tEE Iyears of seNlce by the time the current contrad is LIp If the contract is awarded to a different company I may be able to get myoid job back however I will lese all my long seNice accrual not to mention

[lEJdays of sick leave accrued

When the contract is put out to tender in another B years II have to start again and why would a new company want to emplOYfZJyears young person when he may retire anytime within the next term

I believe that an earlier email I sent to Greg Combet should have been forwarded to you in relation to this issue from his offICe as your my member of pariiament

Cheers

147F BAE SYSTEMS

2

IMPORTANT This email remains the property of the Departrnent of Defence and is subject to the Jurisdiction of section 70 of the Crimes Act 1914 If you have received Ulis email in error you are requested to contact Ule sender and ltelele the email

3

Australian Government

Dqlartmenl or Ddence ----

UNCLASSIFIED ClarelMC13-000296

Reference JLCIOUT2013177

FOl3371213 MINISTERIAL REPRESENTATION litem 1 ________________J Serial 13

L-______J

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Materiel Througb VCDF

For Info MINDEF Copies to Secnlary C[)F V([)F FASMECC

Subject MINDM Response to Paul Bastian AMWU Regarding Emplovment Implications of Expiry of BAE Land Materiel Maintenance Contract

Purpose To provide a response to the concerns raised by the National Secretary AustraliWl MWlufacturing Workers Union regarding employment implications of the expiry of BAE Land Materiel MaintenWlce Contract

Key Points

I On 31 51 JWluary 2013 Mr Paul Bastion the National Secretary Australian Manufacturing Workers Union wrote to the Honourable Minister Jason Clare Minister of Parliament regarding employment implications of the expiry of Defences Land Materiel Maintenance Contract with BAE Systems Australia (BAESA) His concerns specifically relate 10 the potential impact on the BAESA workforce

2 The background to the re-tender of the ~d Materiel Maintenance Contract is provided at attachment A A copy of the letter from Mr Bastian is provided at attactunent B The letter was not copied to any other parties

3 In relation to the concerns raised by Mr Bastian Defence has engaged in regular consultation with union representatives regarding the potential impacts of the expiry of the connct on the Commonwealth workforce This engagement has not included discussions regarding BAESA employees as this is a matter for BAESA However the A WMU has been invited to and participated in following formal consultation activities

a) 29 June 2012 - Teleconference with Commander Joint Logistics (CJLOG) and CPSU APESMA NUWand AMWU This teleconference provided an overview of the Defence Logistics Transfonnation Program (DLTP) proposed commonwealth workforce reductions and timeframe for the consultation period

b) 14 August 2012 - Draft organisation structures with Ihe draft StaffTransition Plan (STP) were e-mailed tOlheCPSU APESMANUW and AMWU for comment An initial three week consultation period was provided however this was extended to five weeks at the request of the CPSu

c) 28 August 2012 - Updated documents (STP Wld orgWlisational struclures) along with an overview of feedback received to date was e-mailed to the CPSU APESMA NUW and AMWU

d) 3J August 2012 - A teleconference between CJLOG and tne NUW APESMA and AMWU occurred (CPSU did not attend) The meeting allowed the unions to provide feedback to CJLOG

Page 1 ofS

UNCLASSIFIED

UNCLASSIFIED ClareIMC 13-000296

Reference JLCOUT12013177

e) 5 September 2012 - An updated document that provided a Compilation of union and workforce feedback on the proposed changes was distributed to the CPSU APESMA NUW and AMWU

f) II October 2012 - A final meeting with the unions was held No objection was raised to the proposed structure Implementation was then commenced

4 As the Land Materiel Maintenance Services Retender process is currently ongoing confidentiality regarding its status must be tightly maintained until the negotiations are concluded and a contract awarded

Recommendations

That you

i Note that Defence has consulted with unions including the AMWU on the employment impHcations for the Commonwealth workforce related to the expiry of the Land Materiel Maintenance Contract with BAESA

Noted I Please Discuss

Ii Sign the letter to Mr Bastian responding to the concerns raised in his Jetter of31 January 2013

Signed I Not Signed

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

~ebruary 2013 Phone (03) 9282 7039 I Contact Officer Mr David McGahey

-------

Primary Addressee

Information Addressee

Noted I Please Discuss

Mike Kelly I I

Stephen Smith I I

Page 2 of8

UNCLASSIFIED

UNCLASSIFIED ClareMC13middot000296

Reference JLCOUT120 1377

Resources

5~ NA

Consultation

6 NA

Conflict of Interest

7 NA

Attachments

A Background

B Letter from Mr Paul Bastian to The Hon Jason Clare MP dated 31 January 2013

C Talking points

D Draft letter to Mr Paul Bastion from The Hon Dr Mike KeUy MP

Page 3 of8

UNCLASSIFJED

UNCLASSIFIED FOl3371213 Item 1

Attachment A Serial 14

BA CKGROUND INFORMATION - MINDM Response to Paul Bastian AMWU Regarding Employment Implications ofExpiry of

BAE Land Materiel Maintenallce Contract

1 A Request for Tender (RFT) was released for Land Materiel Maintenance (LMM) services on 29 June 2012 The tender closed on 24 September 2012

2 The tender process is continuing and on schedule to have new contractual arrangement in place by 30 June 2013 The outcomes of the LMM tender process have not yet concluded and remain Commercial-In-Confidence

3 The draft contract attached to the RFT for LMM Services included a contractual requirement that the successful contractor is to comply with Australian Governments Fair Work Principl es

4 In accordance with the RFT for LMM Services and the Australian Governments Fair Work Principles compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement

5 The Fair Work Principles state that the Australian Government does not support the adoption ofcontracting arrangements to undennine the entitlements ofemployees and that the Australian Government expects that in conduc~ing their businesses government contractors meet public expectations of fair and reasonable workplace practices

6 The transition ofbusiness arrangements is regulated by the Fair Work Act and there is nothing in the RFT or draft contract which precludes such a transition from occurring

UNCLASSIFIED

J-Halllet) 1- f FOl3371213 Item 1 Serial 15

31 January 2013

AMWUThe Hon Jason Clare MP Minister for Defence Materiel Parliament House Canberra ACT 2600 Email JasonClareMPaphgovau

Dear Minister Clare

Re EmRlo~ment Implications of Expiry of BAE Land Materiel Maintenance Contract

We write to seek your offices immediate advice and assistance in relallon to our members currenlly employed by BAE $ystems in delivering the Land Maleriel Maintenance contract to your Department

We have been advised by members from numerous sites that BAE Systems has been unsuccessful in Its bid for a new national contract to continue to supply this work and the current contract is set to expire on June 30 this year

Despite BAE management advising our Detegates that they have not been successful in the bid of the contract there has been no ormal briefing of the implications for workers and their families

As you can imagine this lack of information about their ongoing security of employment what this means for their future employment their entillements and whether they will be provided with transitional arrangements to the successful bidder is deeply troubling to our members their families and communities

To satisfy their Immediate concerns we are seeking an urgent meeting with you to gain an understanding of the following

bull the current status of the bidding process bull the transitional employment arrangements for current BAE workers that any successful

bidder will meet as part of being awarded the contract bull whether any job losses are anticipated as a result of the decision to appoint a Single service

provider for each sector to achieve efficient and effective deliverymiddot bull other assurances your office can provide to workers their families and communities about

their on-going employment status and bull whether this has wider implications for other defence contracts such as warehousing and

distribution contract

We will be in contact with your office to arrange a suitable meeting time

AUJl1I81in Manulaclul10g WQrioU~on

Regislerellllamp AFMEPKIU NationI OllIe Lllyel~

33 Parramalla Road GrnnYlUe NSW 2142 TelephlnO 02 esse 15to Fac5unlie 02881119274 allWUamwu No-U

sr1ationsl adminislralioncorresnational secreterynal see leners 13pb213D38doc

UNCLASSIFIED

FOl3371213 Item 1 Attachment C Serial 16

MINDM RESPONSE TO PAUL BASTIAN AMWU REGARDING EMPLOYMENT IMPLICA TIONS OF EXPIRY OF BAE LAND

MA TERIEL MAINTENANCE CONTRACT

MINISTERIAL TALKING POINTS bull If MINDM is asked the current status of the bidding process

Response The tender process is continuing and on schedule to

have new contractual arrangement in place by 30 June 2013 The

outcomes of the Land Materiel Maintenance tender process have not

yet concluded and remain Commercial-In-Confidence

bull IfMINDM is asked if there are wider implications for other

Defence such as warehousing and distribution

Response A RFT for Warehousing and Distribution closed on 24

September 2012 This tender process is continuing and remains

Commercial-In-Confidence The outcome of this tender process

may have employment implications for the current contractor

workforce

bull If MINDM is asked if any job losses are anticipated

Response Defence is limited to provide comment on the

Commonwealth workforce and any proposed changes within BAE

would be subject to comment from BAE Further comment is not

appropriate until the tender process has concluded

UNCLASSIFIED

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

-r

-CJ--=~ middot~O u-_

I~~ H~PtA) _

y I K II (It-~ 1Iin-~ iii r-ot ~

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Lk eI~Ross Island Tow~sville

-___ t-

- -~ -=

bull ~ - - KMad1lssan Coo 0 t w~~ - w- __ ~

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~~Q)~MaCkay ~--l - -~~~ ~) ~ bull bull 11 0 ~ -~__ o

---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

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responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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J

FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

1IIlI t1INIM ~ACT 21IlOO Tilt 1IIZ16l7nlOO Fbull02)WUlIa COMMERlCuINcONflDENCE

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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ii ~() be briercd on the DI~TP

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

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For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 3: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

i

UNCLASSIFIED KellyMe 13-000551

Reference

Primary Addressee

Mike Kelly I I

Information Addressee

Noted I Please Discuss

Stephen Smith I I

Resources

3 NA

Consultation

4 NA

Attachments

A Letter from Jill Hall MP to The Hon Dr Mike Kelly MP dated 19 February 2013

B Ministerial Representation MC 13-000296 dated 5 February 2013

C Letter from The Hon Dr Mike KeUy to Mr Paul Bastian of the AMWU dated 11 February 2013

D Draft letter to Ms Jill Hall MP

Page 3 of4

UNCLASSIFIED

26 Macquarie Street Belmont NSW 2280 PO Box 499 Belmont NSW 2280 Tollfree 1300301 792 Ph (02) 49479711 Fax (02) 49479722 Email JillHallMPaphgovau Web wwwjillhallcom

FOl337121319th February 2013 Item 1

Serial 12

Dr Mike KeJly MP Minister for Defence Materiel PO Box 6022 House of Representatives Parliament House canberra Acr 2600

It~ eeaffnster w

I wlsh to make representations on behalf of ~7F ~=wJ f7F J f47F conceming the renewal of the Department of Defence Warehousing and Distribution contract

r7F Ihas contacted me to express Ej concern about the ImplIcations for employees of the current contractor if another company Is awarded the new contract

1have enclosed a copy of ~ emalls to me In which are listed a number of issues that are worrying to him and his colleagues

1would appreciate your response to these issues and your advice as to any considerations for existing employees that might be included In the award of any new contract

Kind regards

Q ~ JI~P FBdBra NemiHJr forShortand lHmr

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Subject RE Defence Contract renewals ISEC=UNClASSIFJEDJ

UNCLASSIFIED

Hi Mark

Thank you for your quick response

p7F The contract will be awarded in April with a start dale of 01 July 13

If the current contractor (BAE Systems Austraiia) isn1 successful they will help in job interviews and allow time to apply for new jobs

This doesnt help with the uncertainty for the coming 6 months all our lives are put on hold

The general feeling is we all wont get our jobs back as the govemment has cut defence spending therefore whoever puts in the Cheapest quote will win and they will need to cut jObS stay profitable

Cheers[7F

IMPORT ANT This email remains the property of the Department of Defence and is subject 10 the jurisdiction of section 70 of the Crimes Act 1914 If you have received this email in error you are requested to contacr rhe sender and delete the email

-____--------__-- --- ~-------- __ -- _ ~-- ----- --- ---~----~ - --- _ From Raper Hark (J Hall HP) [malltQMarkBaoeraphgoyau] Sent TUesda 19 february 2013 1237 TQ~7F ] SUbject FW Defence contra~ renewals [SEC=UNaASSIFJED]

147F ]

Jill has asked me to follow up on your email

Jill would like to make representations on your behalf to the relevant Minister

While the contracting process Is likely to continue we can ask the Minister to address the issue about security of employment and entitlements and how these things are handled in any new contract

In the meantime would you be able to forward your address details in the electorate to enable Jill to write to you in response

Thanks

1

~ -shyParliament Hou~ P 02 627144921 F 02 6ln 8505 markra pertalaph govau

From HaU Jill (MP) Sent Tuesday 19 February 2013 1147 AM To Ra~r Mark (J Hall MP) Subject FW Defence contract renewals [SECUNCLASSIFIEDJ

Please follow up

Thanks

From~F Sent~ Ro=-=n-riiJa~y~(18~ 150 PM To Hall Jill (HPJ Subject Defence contract renewals [SECUNOASSIF[EO]

UNCLASSIFIED

Hi Jill

Could I express my concerns with the upcoming renewal of the Warehousing and Distribution contract with the Department of Defence

I understand there needs 10 be a renewal of the contract periodically however is there any consideration to the impact this has on the workforce involved if a different company wins the tender

Some of these changes that are affecting me are the uncertainty of job security making it hard to f7FI ]and loss of long service accrual with the current employer 0--____

at may result tna7F_____________________---J

Also I will have tEE Iyears of seNlce by the time the current contrad is LIp If the contract is awarded to a different company I may be able to get myoid job back however I will lese all my long seNice accrual not to mention

[lEJdays of sick leave accrued

When the contract is put out to tender in another B years II have to start again and why would a new company want to emplOYfZJyears young person when he may retire anytime within the next term

I believe that an earlier email I sent to Greg Combet should have been forwarded to you in relation to this issue from his offICe as your my member of pariiament

Cheers

147F BAE SYSTEMS

2

IMPORTANT This email remains the property of the Departrnent of Defence and is subject to the Jurisdiction of section 70 of the Crimes Act 1914 If you have received Ulis email in error you are requested to contact Ule sender and ltelele the email

3

Australian Government

Dqlartmenl or Ddence ----

UNCLASSIFIED ClarelMC13-000296

Reference JLCIOUT2013177

FOl3371213 MINISTERIAL REPRESENTATION litem 1 ________________J Serial 13

L-______J

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Materiel Througb VCDF

For Info MINDEF Copies to Secnlary C[)F V([)F FASMECC

Subject MINDM Response to Paul Bastian AMWU Regarding Emplovment Implications of Expiry of BAE Land Materiel Maintenance Contract

Purpose To provide a response to the concerns raised by the National Secretary AustraliWl MWlufacturing Workers Union regarding employment implications of the expiry of BAE Land Materiel MaintenWlce Contract

Key Points

I On 31 51 JWluary 2013 Mr Paul Bastion the National Secretary Australian Manufacturing Workers Union wrote to the Honourable Minister Jason Clare Minister of Parliament regarding employment implications of the expiry of Defences Land Materiel Maintenance Contract with BAE Systems Australia (BAESA) His concerns specifically relate 10 the potential impact on the BAESA workforce

2 The background to the re-tender of the ~d Materiel Maintenance Contract is provided at attachment A A copy of the letter from Mr Bastian is provided at attactunent B The letter was not copied to any other parties

3 In relation to the concerns raised by Mr Bastian Defence has engaged in regular consultation with union representatives regarding the potential impacts of the expiry of the connct on the Commonwealth workforce This engagement has not included discussions regarding BAESA employees as this is a matter for BAESA However the A WMU has been invited to and participated in following formal consultation activities

a) 29 June 2012 - Teleconference with Commander Joint Logistics (CJLOG) and CPSU APESMA NUWand AMWU This teleconference provided an overview of the Defence Logistics Transfonnation Program (DLTP) proposed commonwealth workforce reductions and timeframe for the consultation period

b) 14 August 2012 - Draft organisation structures with Ihe draft StaffTransition Plan (STP) were e-mailed tOlheCPSU APESMANUW and AMWU for comment An initial three week consultation period was provided however this was extended to five weeks at the request of the CPSu

c) 28 August 2012 - Updated documents (STP Wld orgWlisational struclures) along with an overview of feedback received to date was e-mailed to the CPSU APESMA NUW and AMWU

d) 3J August 2012 - A teleconference between CJLOG and tne NUW APESMA and AMWU occurred (CPSU did not attend) The meeting allowed the unions to provide feedback to CJLOG

Page 1 ofS

UNCLASSIFIED

UNCLASSIFIED ClareIMC 13-000296

Reference JLCOUT12013177

e) 5 September 2012 - An updated document that provided a Compilation of union and workforce feedback on the proposed changes was distributed to the CPSU APESMA NUW and AMWU

f) II October 2012 - A final meeting with the unions was held No objection was raised to the proposed structure Implementation was then commenced

4 As the Land Materiel Maintenance Services Retender process is currently ongoing confidentiality regarding its status must be tightly maintained until the negotiations are concluded and a contract awarded

Recommendations

That you

i Note that Defence has consulted with unions including the AMWU on the employment impHcations for the Commonwealth workforce related to the expiry of the Land Materiel Maintenance Contract with BAESA

Noted I Please Discuss

Ii Sign the letter to Mr Bastian responding to the concerns raised in his Jetter of31 January 2013

Signed I Not Signed

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

~ebruary 2013 Phone (03) 9282 7039 I Contact Officer Mr David McGahey

-------

Primary Addressee

Information Addressee

Noted I Please Discuss

Mike Kelly I I

Stephen Smith I I

Page 2 of8

UNCLASSIFIED

UNCLASSIFIED ClareMC13middot000296

Reference JLCOUT120 1377

Resources

5~ NA

Consultation

6 NA

Conflict of Interest

7 NA

Attachments

A Background

B Letter from Mr Paul Bastian to The Hon Jason Clare MP dated 31 January 2013

C Talking points

D Draft letter to Mr Paul Bastion from The Hon Dr Mike KeUy MP

Page 3 of8

UNCLASSIFJED

UNCLASSIFIED FOl3371213 Item 1

Attachment A Serial 14

BA CKGROUND INFORMATION - MINDM Response to Paul Bastian AMWU Regarding Employment Implications ofExpiry of

BAE Land Materiel Maintenallce Contract

1 A Request for Tender (RFT) was released for Land Materiel Maintenance (LMM) services on 29 June 2012 The tender closed on 24 September 2012

2 The tender process is continuing and on schedule to have new contractual arrangement in place by 30 June 2013 The outcomes of the LMM tender process have not yet concluded and remain Commercial-In-Confidence

3 The draft contract attached to the RFT for LMM Services included a contractual requirement that the successful contractor is to comply with Australian Governments Fair Work Principl es

4 In accordance with the RFT for LMM Services and the Australian Governments Fair Work Principles compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement

5 The Fair Work Principles state that the Australian Government does not support the adoption ofcontracting arrangements to undennine the entitlements ofemployees and that the Australian Government expects that in conduc~ing their businesses government contractors meet public expectations of fair and reasonable workplace practices

6 The transition ofbusiness arrangements is regulated by the Fair Work Act and there is nothing in the RFT or draft contract which precludes such a transition from occurring

UNCLASSIFIED

J-Halllet) 1- f FOl3371213 Item 1 Serial 15

31 January 2013

AMWUThe Hon Jason Clare MP Minister for Defence Materiel Parliament House Canberra ACT 2600 Email JasonClareMPaphgovau

Dear Minister Clare

Re EmRlo~ment Implications of Expiry of BAE Land Materiel Maintenance Contract

We write to seek your offices immediate advice and assistance in relallon to our members currenlly employed by BAE $ystems in delivering the Land Maleriel Maintenance contract to your Department

We have been advised by members from numerous sites that BAE Systems has been unsuccessful in Its bid for a new national contract to continue to supply this work and the current contract is set to expire on June 30 this year

Despite BAE management advising our Detegates that they have not been successful in the bid of the contract there has been no ormal briefing of the implications for workers and their families

As you can imagine this lack of information about their ongoing security of employment what this means for their future employment their entillements and whether they will be provided with transitional arrangements to the successful bidder is deeply troubling to our members their families and communities

To satisfy their Immediate concerns we are seeking an urgent meeting with you to gain an understanding of the following

bull the current status of the bidding process bull the transitional employment arrangements for current BAE workers that any successful

bidder will meet as part of being awarded the contract bull whether any job losses are anticipated as a result of the decision to appoint a Single service

provider for each sector to achieve efficient and effective deliverymiddot bull other assurances your office can provide to workers their families and communities about

their on-going employment status and bull whether this has wider implications for other defence contracts such as warehousing and

distribution contract

We will be in contact with your office to arrange a suitable meeting time

AUJl1I81in Manulaclul10g WQrioU~on

Regislerellllamp AFMEPKIU NationI OllIe Lllyel~

33 Parramalla Road GrnnYlUe NSW 2142 TelephlnO 02 esse 15to Fac5unlie 02881119274 allWUamwu No-U

sr1ationsl adminislralioncorresnational secreterynal see leners 13pb213D38doc

UNCLASSIFIED

FOl3371213 Item 1 Attachment C Serial 16

MINDM RESPONSE TO PAUL BASTIAN AMWU REGARDING EMPLOYMENT IMPLICA TIONS OF EXPIRY OF BAE LAND

MA TERIEL MAINTENANCE CONTRACT

MINISTERIAL TALKING POINTS bull If MINDM is asked the current status of the bidding process

Response The tender process is continuing and on schedule to

have new contractual arrangement in place by 30 June 2013 The

outcomes of the Land Materiel Maintenance tender process have not

yet concluded and remain Commercial-In-Confidence

bull IfMINDM is asked if there are wider implications for other

Defence such as warehousing and distribution

Response A RFT for Warehousing and Distribution closed on 24

September 2012 This tender process is continuing and remains

Commercial-In-Confidence The outcome of this tender process

may have employment implications for the current contractor

workforce

bull If MINDM is asked if any job losses are anticipated

Response Defence is limited to provide comment on the

Commonwealth workforce and any proposed changes within BAE

would be subject to comment from BAE Further comment is not

appropriate until the tender process has concluded

UNCLASSIFIED

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

-r

-CJ--=~ middot~O u-_

I~~ H~PtA) _

y I K II (It-~ 1Iin-~ iii r-ot ~

-- t_

CI

c~~~ ~

Lk eI~Ross Island Tow~sville

-___ t-

- -~ -=

bull ~ - - KMad1lssan Coo 0 t w~~ - w- __ ~

~- ~ t~ ttL_ ( ~ ~ bull 1

til ~ - - u-- o

~~Q)~MaCkay ~--l - -~~~ ~) ~ bull bull 11 0 ~ -~__ o

---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

1 t I

I

COMME1lICAL-IN-CONFlDEHCE

II

1

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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17 m ZOtl

CiRfalNAL HAND DEUVERED

I I

L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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2

Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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L I

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

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Name ~ppoiDtme~t DTG

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

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  • 1pdf
  • 2pdf
Page 4: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

26 Macquarie Street Belmont NSW 2280 PO Box 499 Belmont NSW 2280 Tollfree 1300301 792 Ph (02) 49479711 Fax (02) 49479722 Email JillHallMPaphgovau Web wwwjillhallcom

FOl337121319th February 2013 Item 1

Serial 12

Dr Mike KeJly MP Minister for Defence Materiel PO Box 6022 House of Representatives Parliament House canberra Acr 2600

It~ eeaffnster w

I wlsh to make representations on behalf of ~7F ~=wJ f7F J f47F conceming the renewal of the Department of Defence Warehousing and Distribution contract

r7F Ihas contacted me to express Ej concern about the ImplIcations for employees of the current contractor if another company Is awarded the new contract

1have enclosed a copy of ~ emalls to me In which are listed a number of issues that are worrying to him and his colleagues

1would appreciate your response to these issues and your advice as to any considerations for existing employees that might be included In the award of any new contract

Kind regards

Q ~ JI~P FBdBra NemiHJr forShortand lHmr

-p- ~----- ---~-- - -- ---- -bull- -- -- r- - - c-f --i-- -- ~

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Subject RE Defence Contract renewals ISEC=UNClASSIFJEDJ

UNCLASSIFIED

Hi Mark

Thank you for your quick response

p7F The contract will be awarded in April with a start dale of 01 July 13

If the current contractor (BAE Systems Austraiia) isn1 successful they will help in job interviews and allow time to apply for new jobs

This doesnt help with the uncertainty for the coming 6 months all our lives are put on hold

The general feeling is we all wont get our jobs back as the govemment has cut defence spending therefore whoever puts in the Cheapest quote will win and they will need to cut jObS stay profitable

Cheers[7F

IMPORT ANT This email remains the property of the Department of Defence and is subject 10 the jurisdiction of section 70 of the Crimes Act 1914 If you have received this email in error you are requested to contacr rhe sender and delete the email

-____--------__-- --- ~-------- __ -- _ ~-- ----- --- ---~----~ - --- _ From Raper Hark (J Hall HP) [malltQMarkBaoeraphgoyau] Sent TUesda 19 february 2013 1237 TQ~7F ] SUbject FW Defence contra~ renewals [SEC=UNaASSIFJED]

147F ]

Jill has asked me to follow up on your email

Jill would like to make representations on your behalf to the relevant Minister

While the contracting process Is likely to continue we can ask the Minister to address the issue about security of employment and entitlements and how these things are handled in any new contract

In the meantime would you be able to forward your address details in the electorate to enable Jill to write to you in response

Thanks

1

~ -shyParliament Hou~ P 02 627144921 F 02 6ln 8505 markra pertalaph govau

From HaU Jill (MP) Sent Tuesday 19 February 2013 1147 AM To Ra~r Mark (J Hall MP) Subject FW Defence contract renewals [SECUNCLASSIFIEDJ

Please follow up

Thanks

From~F Sent~ Ro=-=n-riiJa~y~(18~ 150 PM To Hall Jill (HPJ Subject Defence contract renewals [SECUNOASSIF[EO]

UNCLASSIFIED

Hi Jill

Could I express my concerns with the upcoming renewal of the Warehousing and Distribution contract with the Department of Defence

I understand there needs 10 be a renewal of the contract periodically however is there any consideration to the impact this has on the workforce involved if a different company wins the tender

Some of these changes that are affecting me are the uncertainty of job security making it hard to f7FI ]and loss of long service accrual with the current employer 0--____

at may result tna7F_____________________---J

Also I will have tEE Iyears of seNlce by the time the current contrad is LIp If the contract is awarded to a different company I may be able to get myoid job back however I will lese all my long seNice accrual not to mention

[lEJdays of sick leave accrued

When the contract is put out to tender in another B years II have to start again and why would a new company want to emplOYfZJyears young person when he may retire anytime within the next term

I believe that an earlier email I sent to Greg Combet should have been forwarded to you in relation to this issue from his offICe as your my member of pariiament

Cheers

147F BAE SYSTEMS

2

IMPORTANT This email remains the property of the Departrnent of Defence and is subject to the Jurisdiction of section 70 of the Crimes Act 1914 If you have received Ulis email in error you are requested to contact Ule sender and ltelele the email

3

Australian Government

Dqlartmenl or Ddence ----

UNCLASSIFIED ClarelMC13-000296

Reference JLCIOUT2013177

FOl3371213 MINISTERIAL REPRESENTATION litem 1 ________________J Serial 13

L-______J

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Materiel Througb VCDF

For Info MINDEF Copies to Secnlary C[)F V([)F FASMECC

Subject MINDM Response to Paul Bastian AMWU Regarding Emplovment Implications of Expiry of BAE Land Materiel Maintenance Contract

Purpose To provide a response to the concerns raised by the National Secretary AustraliWl MWlufacturing Workers Union regarding employment implications of the expiry of BAE Land Materiel MaintenWlce Contract

Key Points

I On 31 51 JWluary 2013 Mr Paul Bastion the National Secretary Australian Manufacturing Workers Union wrote to the Honourable Minister Jason Clare Minister of Parliament regarding employment implications of the expiry of Defences Land Materiel Maintenance Contract with BAE Systems Australia (BAESA) His concerns specifically relate 10 the potential impact on the BAESA workforce

2 The background to the re-tender of the ~d Materiel Maintenance Contract is provided at attachment A A copy of the letter from Mr Bastian is provided at attactunent B The letter was not copied to any other parties

3 In relation to the concerns raised by Mr Bastian Defence has engaged in regular consultation with union representatives regarding the potential impacts of the expiry of the connct on the Commonwealth workforce This engagement has not included discussions regarding BAESA employees as this is a matter for BAESA However the A WMU has been invited to and participated in following formal consultation activities

a) 29 June 2012 - Teleconference with Commander Joint Logistics (CJLOG) and CPSU APESMA NUWand AMWU This teleconference provided an overview of the Defence Logistics Transfonnation Program (DLTP) proposed commonwealth workforce reductions and timeframe for the consultation period

b) 14 August 2012 - Draft organisation structures with Ihe draft StaffTransition Plan (STP) were e-mailed tOlheCPSU APESMANUW and AMWU for comment An initial three week consultation period was provided however this was extended to five weeks at the request of the CPSu

c) 28 August 2012 - Updated documents (STP Wld orgWlisational struclures) along with an overview of feedback received to date was e-mailed to the CPSU APESMA NUW and AMWU

d) 3J August 2012 - A teleconference between CJLOG and tne NUW APESMA and AMWU occurred (CPSU did not attend) The meeting allowed the unions to provide feedback to CJLOG

Page 1 ofS

UNCLASSIFIED

UNCLASSIFIED ClareIMC 13-000296

Reference JLCOUT12013177

e) 5 September 2012 - An updated document that provided a Compilation of union and workforce feedback on the proposed changes was distributed to the CPSU APESMA NUW and AMWU

f) II October 2012 - A final meeting with the unions was held No objection was raised to the proposed structure Implementation was then commenced

4 As the Land Materiel Maintenance Services Retender process is currently ongoing confidentiality regarding its status must be tightly maintained until the negotiations are concluded and a contract awarded

Recommendations

That you

i Note that Defence has consulted with unions including the AMWU on the employment impHcations for the Commonwealth workforce related to the expiry of the Land Materiel Maintenance Contract with BAESA

Noted I Please Discuss

Ii Sign the letter to Mr Bastian responding to the concerns raised in his Jetter of31 January 2013

Signed I Not Signed

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

~ebruary 2013 Phone (03) 9282 7039 I Contact Officer Mr David McGahey

-------

Primary Addressee

Information Addressee

Noted I Please Discuss

Mike Kelly I I

Stephen Smith I I

Page 2 of8

UNCLASSIFIED

UNCLASSIFIED ClareMC13middot000296

Reference JLCOUT120 1377

Resources

5~ NA

Consultation

6 NA

Conflict of Interest

7 NA

Attachments

A Background

B Letter from Mr Paul Bastian to The Hon Jason Clare MP dated 31 January 2013

C Talking points

D Draft letter to Mr Paul Bastion from The Hon Dr Mike KeUy MP

Page 3 of8

UNCLASSIFJED

UNCLASSIFIED FOl3371213 Item 1

Attachment A Serial 14

BA CKGROUND INFORMATION - MINDM Response to Paul Bastian AMWU Regarding Employment Implications ofExpiry of

BAE Land Materiel Maintenallce Contract

1 A Request for Tender (RFT) was released for Land Materiel Maintenance (LMM) services on 29 June 2012 The tender closed on 24 September 2012

2 The tender process is continuing and on schedule to have new contractual arrangement in place by 30 June 2013 The outcomes of the LMM tender process have not yet concluded and remain Commercial-In-Confidence

3 The draft contract attached to the RFT for LMM Services included a contractual requirement that the successful contractor is to comply with Australian Governments Fair Work Principl es

4 In accordance with the RFT for LMM Services and the Australian Governments Fair Work Principles compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement

5 The Fair Work Principles state that the Australian Government does not support the adoption ofcontracting arrangements to undennine the entitlements ofemployees and that the Australian Government expects that in conduc~ing their businesses government contractors meet public expectations of fair and reasonable workplace practices

6 The transition ofbusiness arrangements is regulated by the Fair Work Act and there is nothing in the RFT or draft contract which precludes such a transition from occurring

UNCLASSIFIED

J-Halllet) 1- f FOl3371213 Item 1 Serial 15

31 January 2013

AMWUThe Hon Jason Clare MP Minister for Defence Materiel Parliament House Canberra ACT 2600 Email JasonClareMPaphgovau

Dear Minister Clare

Re EmRlo~ment Implications of Expiry of BAE Land Materiel Maintenance Contract

We write to seek your offices immediate advice and assistance in relallon to our members currenlly employed by BAE $ystems in delivering the Land Maleriel Maintenance contract to your Department

We have been advised by members from numerous sites that BAE Systems has been unsuccessful in Its bid for a new national contract to continue to supply this work and the current contract is set to expire on June 30 this year

Despite BAE management advising our Detegates that they have not been successful in the bid of the contract there has been no ormal briefing of the implications for workers and their families

As you can imagine this lack of information about their ongoing security of employment what this means for their future employment their entillements and whether they will be provided with transitional arrangements to the successful bidder is deeply troubling to our members their families and communities

To satisfy their Immediate concerns we are seeking an urgent meeting with you to gain an understanding of the following

bull the current status of the bidding process bull the transitional employment arrangements for current BAE workers that any successful

bidder will meet as part of being awarded the contract bull whether any job losses are anticipated as a result of the decision to appoint a Single service

provider for each sector to achieve efficient and effective deliverymiddot bull other assurances your office can provide to workers their families and communities about

their on-going employment status and bull whether this has wider implications for other defence contracts such as warehousing and

distribution contract

We will be in contact with your office to arrange a suitable meeting time

AUJl1I81in Manulaclul10g WQrioU~on

Regislerellllamp AFMEPKIU NationI OllIe Lllyel~

33 Parramalla Road GrnnYlUe NSW 2142 TelephlnO 02 esse 15to Fac5unlie 02881119274 allWUamwu No-U

sr1ationsl adminislralioncorresnational secreterynal see leners 13pb213D38doc

UNCLASSIFIED

FOl3371213 Item 1 Attachment C Serial 16

MINDM RESPONSE TO PAUL BASTIAN AMWU REGARDING EMPLOYMENT IMPLICA TIONS OF EXPIRY OF BAE LAND

MA TERIEL MAINTENANCE CONTRACT

MINISTERIAL TALKING POINTS bull If MINDM is asked the current status of the bidding process

Response The tender process is continuing and on schedule to

have new contractual arrangement in place by 30 June 2013 The

outcomes of the Land Materiel Maintenance tender process have not

yet concluded and remain Commercial-In-Confidence

bull IfMINDM is asked if there are wider implications for other

Defence such as warehousing and distribution

Response A RFT for Warehousing and Distribution closed on 24

September 2012 This tender process is continuing and remains

Commercial-In-Confidence The outcome of this tender process

may have employment implications for the current contractor

workforce

bull If MINDM is asked if any job losses are anticipated

Response Defence is limited to provide comment on the

Commonwealth workforce and any proposed changes within BAE

would be subject to comment from BAE Further comment is not

appropriate until the tender process has concluded

UNCLASSIFIED

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

-r

-CJ--=~ middot~O u-_

I~~ H~PtA) _

y I K II (It-~ 1Iin-~ iii r-ot ~

-- t_

CI

c~~~ ~

Lk eI~Ross Island Tow~sville

-___ t-

- -~ -=

bull ~ - - KMad1lssan Coo 0 t w~~ - w- __ ~

~- ~ t~ ttL_ ( ~ ~ bull 1

til ~ - - u-- o

~~Q)~MaCkay ~--l - -~~~ ~) ~ bull bull 11 0 ~ -~__ o

---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

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Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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FOl33712113 Item 1 Serial 39

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Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

l i 1 I I I I t i

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bullbull

FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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L I

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

v~ ~ f r- iy A~~LJl~ d-tL ~ i

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COMfERICAIN-CONPIDENtt

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_m___________ =middotmiddot~~======~~~==~~~~~=~-middot~middot-=

FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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tRercrcnce ~CDFJQUTnOIIlao1

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ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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bull KfulCarr

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Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 5: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

Subject RE Defence Contract renewals ISEC=UNClASSIFJEDJ

UNCLASSIFIED

Hi Mark

Thank you for your quick response

p7F The contract will be awarded in April with a start dale of 01 July 13

If the current contractor (BAE Systems Austraiia) isn1 successful they will help in job interviews and allow time to apply for new jobs

This doesnt help with the uncertainty for the coming 6 months all our lives are put on hold

The general feeling is we all wont get our jobs back as the govemment has cut defence spending therefore whoever puts in the Cheapest quote will win and they will need to cut jObS stay profitable

Cheers[7F

IMPORT ANT This email remains the property of the Department of Defence and is subject 10 the jurisdiction of section 70 of the Crimes Act 1914 If you have received this email in error you are requested to contacr rhe sender and delete the email

-____--------__-- --- ~-------- __ -- _ ~-- ----- --- ---~----~ - --- _ From Raper Hark (J Hall HP) [malltQMarkBaoeraphgoyau] Sent TUesda 19 february 2013 1237 TQ~7F ] SUbject FW Defence contra~ renewals [SEC=UNaASSIFJED]

147F ]

Jill has asked me to follow up on your email

Jill would like to make representations on your behalf to the relevant Minister

While the contracting process Is likely to continue we can ask the Minister to address the issue about security of employment and entitlements and how these things are handled in any new contract

In the meantime would you be able to forward your address details in the electorate to enable Jill to write to you in response

Thanks

1

~ -shyParliament Hou~ P 02 627144921 F 02 6ln 8505 markra pertalaph govau

From HaU Jill (MP) Sent Tuesday 19 February 2013 1147 AM To Ra~r Mark (J Hall MP) Subject FW Defence contract renewals [SECUNCLASSIFIEDJ

Please follow up

Thanks

From~F Sent~ Ro=-=n-riiJa~y~(18~ 150 PM To Hall Jill (HPJ Subject Defence contract renewals [SECUNOASSIF[EO]

UNCLASSIFIED

Hi Jill

Could I express my concerns with the upcoming renewal of the Warehousing and Distribution contract with the Department of Defence

I understand there needs 10 be a renewal of the contract periodically however is there any consideration to the impact this has on the workforce involved if a different company wins the tender

Some of these changes that are affecting me are the uncertainty of job security making it hard to f7FI ]and loss of long service accrual with the current employer 0--____

at may result tna7F_____________________---J

Also I will have tEE Iyears of seNlce by the time the current contrad is LIp If the contract is awarded to a different company I may be able to get myoid job back however I will lese all my long seNice accrual not to mention

[lEJdays of sick leave accrued

When the contract is put out to tender in another B years II have to start again and why would a new company want to emplOYfZJyears young person when he may retire anytime within the next term

I believe that an earlier email I sent to Greg Combet should have been forwarded to you in relation to this issue from his offICe as your my member of pariiament

Cheers

147F BAE SYSTEMS

2

IMPORTANT This email remains the property of the Departrnent of Defence and is subject to the Jurisdiction of section 70 of the Crimes Act 1914 If you have received Ulis email in error you are requested to contact Ule sender and ltelele the email

3

Australian Government

Dqlartmenl or Ddence ----

UNCLASSIFIED ClarelMC13-000296

Reference JLCIOUT2013177

FOl3371213 MINISTERIAL REPRESENTATION litem 1 ________________J Serial 13

L-______J

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Materiel Througb VCDF

For Info MINDEF Copies to Secnlary C[)F V([)F FASMECC

Subject MINDM Response to Paul Bastian AMWU Regarding Emplovment Implications of Expiry of BAE Land Materiel Maintenance Contract

Purpose To provide a response to the concerns raised by the National Secretary AustraliWl MWlufacturing Workers Union regarding employment implications of the expiry of BAE Land Materiel MaintenWlce Contract

Key Points

I On 31 51 JWluary 2013 Mr Paul Bastion the National Secretary Australian Manufacturing Workers Union wrote to the Honourable Minister Jason Clare Minister of Parliament regarding employment implications of the expiry of Defences Land Materiel Maintenance Contract with BAE Systems Australia (BAESA) His concerns specifically relate 10 the potential impact on the BAESA workforce

2 The background to the re-tender of the ~d Materiel Maintenance Contract is provided at attachment A A copy of the letter from Mr Bastian is provided at attactunent B The letter was not copied to any other parties

3 In relation to the concerns raised by Mr Bastian Defence has engaged in regular consultation with union representatives regarding the potential impacts of the expiry of the connct on the Commonwealth workforce This engagement has not included discussions regarding BAESA employees as this is a matter for BAESA However the A WMU has been invited to and participated in following formal consultation activities

a) 29 June 2012 - Teleconference with Commander Joint Logistics (CJLOG) and CPSU APESMA NUWand AMWU This teleconference provided an overview of the Defence Logistics Transfonnation Program (DLTP) proposed commonwealth workforce reductions and timeframe for the consultation period

b) 14 August 2012 - Draft organisation structures with Ihe draft StaffTransition Plan (STP) were e-mailed tOlheCPSU APESMANUW and AMWU for comment An initial three week consultation period was provided however this was extended to five weeks at the request of the CPSu

c) 28 August 2012 - Updated documents (STP Wld orgWlisational struclures) along with an overview of feedback received to date was e-mailed to the CPSU APESMA NUW and AMWU

d) 3J August 2012 - A teleconference between CJLOG and tne NUW APESMA and AMWU occurred (CPSU did not attend) The meeting allowed the unions to provide feedback to CJLOG

Page 1 ofS

UNCLASSIFIED

UNCLASSIFIED ClareIMC 13-000296

Reference JLCOUT12013177

e) 5 September 2012 - An updated document that provided a Compilation of union and workforce feedback on the proposed changes was distributed to the CPSU APESMA NUW and AMWU

f) II October 2012 - A final meeting with the unions was held No objection was raised to the proposed structure Implementation was then commenced

4 As the Land Materiel Maintenance Services Retender process is currently ongoing confidentiality regarding its status must be tightly maintained until the negotiations are concluded and a contract awarded

Recommendations

That you

i Note that Defence has consulted with unions including the AMWU on the employment impHcations for the Commonwealth workforce related to the expiry of the Land Materiel Maintenance Contract with BAESA

Noted I Please Discuss

Ii Sign the letter to Mr Bastian responding to the concerns raised in his Jetter of31 January 2013

Signed I Not Signed

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

~ebruary 2013 Phone (03) 9282 7039 I Contact Officer Mr David McGahey

-------

Primary Addressee

Information Addressee

Noted I Please Discuss

Mike Kelly I I

Stephen Smith I I

Page 2 of8

UNCLASSIFIED

UNCLASSIFIED ClareMC13middot000296

Reference JLCOUT120 1377

Resources

5~ NA

Consultation

6 NA

Conflict of Interest

7 NA

Attachments

A Background

B Letter from Mr Paul Bastian to The Hon Jason Clare MP dated 31 January 2013

C Talking points

D Draft letter to Mr Paul Bastion from The Hon Dr Mike KeUy MP

Page 3 of8

UNCLASSIFJED

UNCLASSIFIED FOl3371213 Item 1

Attachment A Serial 14

BA CKGROUND INFORMATION - MINDM Response to Paul Bastian AMWU Regarding Employment Implications ofExpiry of

BAE Land Materiel Maintenallce Contract

1 A Request for Tender (RFT) was released for Land Materiel Maintenance (LMM) services on 29 June 2012 The tender closed on 24 September 2012

2 The tender process is continuing and on schedule to have new contractual arrangement in place by 30 June 2013 The outcomes of the LMM tender process have not yet concluded and remain Commercial-In-Confidence

3 The draft contract attached to the RFT for LMM Services included a contractual requirement that the successful contractor is to comply with Australian Governments Fair Work Principl es

4 In accordance with the RFT for LMM Services and the Australian Governments Fair Work Principles compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement

5 The Fair Work Principles state that the Australian Government does not support the adoption ofcontracting arrangements to undennine the entitlements ofemployees and that the Australian Government expects that in conduc~ing their businesses government contractors meet public expectations of fair and reasonable workplace practices

6 The transition ofbusiness arrangements is regulated by the Fair Work Act and there is nothing in the RFT or draft contract which precludes such a transition from occurring

UNCLASSIFIED

J-Halllet) 1- f FOl3371213 Item 1 Serial 15

31 January 2013

AMWUThe Hon Jason Clare MP Minister for Defence Materiel Parliament House Canberra ACT 2600 Email JasonClareMPaphgovau

Dear Minister Clare

Re EmRlo~ment Implications of Expiry of BAE Land Materiel Maintenance Contract

We write to seek your offices immediate advice and assistance in relallon to our members currenlly employed by BAE $ystems in delivering the Land Maleriel Maintenance contract to your Department

We have been advised by members from numerous sites that BAE Systems has been unsuccessful in Its bid for a new national contract to continue to supply this work and the current contract is set to expire on June 30 this year

Despite BAE management advising our Detegates that they have not been successful in the bid of the contract there has been no ormal briefing of the implications for workers and their families

As you can imagine this lack of information about their ongoing security of employment what this means for their future employment their entillements and whether they will be provided with transitional arrangements to the successful bidder is deeply troubling to our members their families and communities

To satisfy their Immediate concerns we are seeking an urgent meeting with you to gain an understanding of the following

bull the current status of the bidding process bull the transitional employment arrangements for current BAE workers that any successful

bidder will meet as part of being awarded the contract bull whether any job losses are anticipated as a result of the decision to appoint a Single service

provider for each sector to achieve efficient and effective deliverymiddot bull other assurances your office can provide to workers their families and communities about

their on-going employment status and bull whether this has wider implications for other defence contracts such as warehousing and

distribution contract

We will be in contact with your office to arrange a suitable meeting time

AUJl1I81in Manulaclul10g WQrioU~on

Regislerellllamp AFMEPKIU NationI OllIe Lllyel~

33 Parramalla Road GrnnYlUe NSW 2142 TelephlnO 02 esse 15to Fac5unlie 02881119274 allWUamwu No-U

sr1ationsl adminislralioncorresnational secreterynal see leners 13pb213D38doc

UNCLASSIFIED

FOl3371213 Item 1 Attachment C Serial 16

MINDM RESPONSE TO PAUL BASTIAN AMWU REGARDING EMPLOYMENT IMPLICA TIONS OF EXPIRY OF BAE LAND

MA TERIEL MAINTENANCE CONTRACT

MINISTERIAL TALKING POINTS bull If MINDM is asked the current status of the bidding process

Response The tender process is continuing and on schedule to

have new contractual arrangement in place by 30 June 2013 The

outcomes of the Land Materiel Maintenance tender process have not

yet concluded and remain Commercial-In-Confidence

bull IfMINDM is asked if there are wider implications for other

Defence such as warehousing and distribution

Response A RFT for Warehousing and Distribution closed on 24

September 2012 This tender process is continuing and remains

Commercial-In-Confidence The outcome of this tender process

may have employment implications for the current contractor

workforce

bull If MINDM is asked if any job losses are anticipated

Response Defence is limited to provide comment on the

Commonwealth workforce and any proposed changes within BAE

would be subject to comment from BAE Further comment is not

appropriate until the tender process has concluded

UNCLASSIFIED

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

-r

-CJ--=~ middot~O u-_

I~~ H~PtA) _

y I K II (It-~ 1Iin-~ iii r-ot ~

-- t_

CI

c~~~ ~

Lk eI~Ross Island Tow~sville

-___ t-

- -~ -=

bull ~ - - KMad1lssan Coo 0 t w~~ - w- __ ~

~- ~ t~ ttL_ ( ~ ~ bull 1

til ~ - - u-- o

~~Q)~MaCkay ~--l - -~~~ ~) ~ bull bull 11 0 ~ -~__ o

---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

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D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

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I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

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  • 1pdf
  • 2pdf
Page 6: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

~ -shyParliament Hou~ P 02 627144921 F 02 6ln 8505 markra pertalaph govau

From HaU Jill (MP) Sent Tuesday 19 February 2013 1147 AM To Ra~r Mark (J Hall MP) Subject FW Defence contract renewals [SECUNCLASSIFIEDJ

Please follow up

Thanks

From~F Sent~ Ro=-=n-riiJa~y~(18~ 150 PM To Hall Jill (HPJ Subject Defence contract renewals [SECUNOASSIF[EO]

UNCLASSIFIED

Hi Jill

Could I express my concerns with the upcoming renewal of the Warehousing and Distribution contract with the Department of Defence

I understand there needs 10 be a renewal of the contract periodically however is there any consideration to the impact this has on the workforce involved if a different company wins the tender

Some of these changes that are affecting me are the uncertainty of job security making it hard to f7FI ]and loss of long service accrual with the current employer 0--____

at may result tna7F_____________________---J

Also I will have tEE Iyears of seNlce by the time the current contrad is LIp If the contract is awarded to a different company I may be able to get myoid job back however I will lese all my long seNice accrual not to mention

[lEJdays of sick leave accrued

When the contract is put out to tender in another B years II have to start again and why would a new company want to emplOYfZJyears young person when he may retire anytime within the next term

I believe that an earlier email I sent to Greg Combet should have been forwarded to you in relation to this issue from his offICe as your my member of pariiament

Cheers

147F BAE SYSTEMS

2

IMPORTANT This email remains the property of the Departrnent of Defence and is subject to the Jurisdiction of section 70 of the Crimes Act 1914 If you have received Ulis email in error you are requested to contact Ule sender and ltelele the email

3

Australian Government

Dqlartmenl or Ddence ----

UNCLASSIFIED ClarelMC13-000296

Reference JLCIOUT2013177

FOl3371213 MINISTERIAL REPRESENTATION litem 1 ________________J Serial 13

L-______J

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Materiel Througb VCDF

For Info MINDEF Copies to Secnlary C[)F V([)F FASMECC

Subject MINDM Response to Paul Bastian AMWU Regarding Emplovment Implications of Expiry of BAE Land Materiel Maintenance Contract

Purpose To provide a response to the concerns raised by the National Secretary AustraliWl MWlufacturing Workers Union regarding employment implications of the expiry of BAE Land Materiel MaintenWlce Contract

Key Points

I On 31 51 JWluary 2013 Mr Paul Bastion the National Secretary Australian Manufacturing Workers Union wrote to the Honourable Minister Jason Clare Minister of Parliament regarding employment implications of the expiry of Defences Land Materiel Maintenance Contract with BAE Systems Australia (BAESA) His concerns specifically relate 10 the potential impact on the BAESA workforce

2 The background to the re-tender of the ~d Materiel Maintenance Contract is provided at attachment A A copy of the letter from Mr Bastian is provided at attactunent B The letter was not copied to any other parties

3 In relation to the concerns raised by Mr Bastian Defence has engaged in regular consultation with union representatives regarding the potential impacts of the expiry of the connct on the Commonwealth workforce This engagement has not included discussions regarding BAESA employees as this is a matter for BAESA However the A WMU has been invited to and participated in following formal consultation activities

a) 29 June 2012 - Teleconference with Commander Joint Logistics (CJLOG) and CPSU APESMA NUWand AMWU This teleconference provided an overview of the Defence Logistics Transfonnation Program (DLTP) proposed commonwealth workforce reductions and timeframe for the consultation period

b) 14 August 2012 - Draft organisation structures with Ihe draft StaffTransition Plan (STP) were e-mailed tOlheCPSU APESMANUW and AMWU for comment An initial three week consultation period was provided however this was extended to five weeks at the request of the CPSu

c) 28 August 2012 - Updated documents (STP Wld orgWlisational struclures) along with an overview of feedback received to date was e-mailed to the CPSU APESMA NUW and AMWU

d) 3J August 2012 - A teleconference between CJLOG and tne NUW APESMA and AMWU occurred (CPSU did not attend) The meeting allowed the unions to provide feedback to CJLOG

Page 1 ofS

UNCLASSIFIED

UNCLASSIFIED ClareIMC 13-000296

Reference JLCOUT12013177

e) 5 September 2012 - An updated document that provided a Compilation of union and workforce feedback on the proposed changes was distributed to the CPSU APESMA NUW and AMWU

f) II October 2012 - A final meeting with the unions was held No objection was raised to the proposed structure Implementation was then commenced

4 As the Land Materiel Maintenance Services Retender process is currently ongoing confidentiality regarding its status must be tightly maintained until the negotiations are concluded and a contract awarded

Recommendations

That you

i Note that Defence has consulted with unions including the AMWU on the employment impHcations for the Commonwealth workforce related to the expiry of the Land Materiel Maintenance Contract with BAESA

Noted I Please Discuss

Ii Sign the letter to Mr Bastian responding to the concerns raised in his Jetter of31 January 2013

Signed I Not Signed

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

~ebruary 2013 Phone (03) 9282 7039 I Contact Officer Mr David McGahey

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Primary Addressee

Information Addressee

Noted I Please Discuss

Mike Kelly I I

Stephen Smith I I

Page 2 of8

UNCLASSIFIED

UNCLASSIFIED ClareMC13middot000296

Reference JLCOUT120 1377

Resources

5~ NA

Consultation

6 NA

Conflict of Interest

7 NA

Attachments

A Background

B Letter from Mr Paul Bastian to The Hon Jason Clare MP dated 31 January 2013

C Talking points

D Draft letter to Mr Paul Bastion from The Hon Dr Mike KeUy MP

Page 3 of8

UNCLASSIFJED

UNCLASSIFIED FOl3371213 Item 1

Attachment A Serial 14

BA CKGROUND INFORMATION - MINDM Response to Paul Bastian AMWU Regarding Employment Implications ofExpiry of

BAE Land Materiel Maintenallce Contract

1 A Request for Tender (RFT) was released for Land Materiel Maintenance (LMM) services on 29 June 2012 The tender closed on 24 September 2012

2 The tender process is continuing and on schedule to have new contractual arrangement in place by 30 June 2013 The outcomes of the LMM tender process have not yet concluded and remain Commercial-In-Confidence

3 The draft contract attached to the RFT for LMM Services included a contractual requirement that the successful contractor is to comply with Australian Governments Fair Work Principl es

4 In accordance with the RFT for LMM Services and the Australian Governments Fair Work Principles compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement

5 The Fair Work Principles state that the Australian Government does not support the adoption ofcontracting arrangements to undennine the entitlements ofemployees and that the Australian Government expects that in conduc~ing their businesses government contractors meet public expectations of fair and reasonable workplace practices

6 The transition ofbusiness arrangements is regulated by the Fair Work Act and there is nothing in the RFT or draft contract which precludes such a transition from occurring

UNCLASSIFIED

J-Halllet) 1- f FOl3371213 Item 1 Serial 15

31 January 2013

AMWUThe Hon Jason Clare MP Minister for Defence Materiel Parliament House Canberra ACT 2600 Email JasonClareMPaphgovau

Dear Minister Clare

Re EmRlo~ment Implications of Expiry of BAE Land Materiel Maintenance Contract

We write to seek your offices immediate advice and assistance in relallon to our members currenlly employed by BAE $ystems in delivering the Land Maleriel Maintenance contract to your Department

We have been advised by members from numerous sites that BAE Systems has been unsuccessful in Its bid for a new national contract to continue to supply this work and the current contract is set to expire on June 30 this year

Despite BAE management advising our Detegates that they have not been successful in the bid of the contract there has been no ormal briefing of the implications for workers and their families

As you can imagine this lack of information about their ongoing security of employment what this means for their future employment their entillements and whether they will be provided with transitional arrangements to the successful bidder is deeply troubling to our members their families and communities

To satisfy their Immediate concerns we are seeking an urgent meeting with you to gain an understanding of the following

bull the current status of the bidding process bull the transitional employment arrangements for current BAE workers that any successful

bidder will meet as part of being awarded the contract bull whether any job losses are anticipated as a result of the decision to appoint a Single service

provider for each sector to achieve efficient and effective deliverymiddot bull other assurances your office can provide to workers their families and communities about

their on-going employment status and bull whether this has wider implications for other defence contracts such as warehousing and

distribution contract

We will be in contact with your office to arrange a suitable meeting time

AUJl1I81in Manulaclul10g WQrioU~on

Regislerellllamp AFMEPKIU NationI OllIe Lllyel~

33 Parramalla Road GrnnYlUe NSW 2142 TelephlnO 02 esse 15to Fac5unlie 02881119274 allWUamwu No-U

sr1ationsl adminislralioncorresnational secreterynal see leners 13pb213D38doc

UNCLASSIFIED

FOl3371213 Item 1 Attachment C Serial 16

MINDM RESPONSE TO PAUL BASTIAN AMWU REGARDING EMPLOYMENT IMPLICA TIONS OF EXPIRY OF BAE LAND

MA TERIEL MAINTENANCE CONTRACT

MINISTERIAL TALKING POINTS bull If MINDM is asked the current status of the bidding process

Response The tender process is continuing and on schedule to

have new contractual arrangement in place by 30 June 2013 The

outcomes of the Land Materiel Maintenance tender process have not

yet concluded and remain Commercial-In-Confidence

bull IfMINDM is asked if there are wider implications for other

Defence such as warehousing and distribution

Response A RFT for Warehousing and Distribution closed on 24

September 2012 This tender process is continuing and remains

Commercial-In-Confidence The outcome of this tender process

may have employment implications for the current contractor

workforce

bull If MINDM is asked if any job losses are anticipated

Response Defence is limited to provide comment on the

Commonwealth workforce and any proposed changes within BAE

would be subject to comment from BAE Further comment is not

appropriate until the tender process has concluded

UNCLASSIFIED

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

-r

-CJ--=~ middot~O u-_

I~~ H~PtA) _

y I K II (It-~ 1Iin-~ iii r-ot ~

-- t_

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Lk eI~Ross Island Tow~sville

-___ t-

- -~ -=

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---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

t

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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J

FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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COMMERClAL-INcoNFIDENCE

AlllcbmrIu It ~ TlMlampblo ~ IUIJIIIIIIiIc key rmilltDDriS ii ~bDpIlIDCIIIUlion~ortbe~

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lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

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bull

r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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ii ~() be briercd on the DI~TP

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

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- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 7: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

IMPORTANT This email remains the property of the Departrnent of Defence and is subject to the Jurisdiction of section 70 of the Crimes Act 1914 If you have received Ulis email in error you are requested to contact Ule sender and ltelele the email

3

Australian Government

Dqlartmenl or Ddence ----

UNCLASSIFIED ClarelMC13-000296

Reference JLCIOUT2013177

FOl3371213 MINISTERIAL REPRESENTATION litem 1 ________________J Serial 13

L-______J

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Materiel Througb VCDF

For Info MINDEF Copies to Secnlary C[)F V([)F FASMECC

Subject MINDM Response to Paul Bastian AMWU Regarding Emplovment Implications of Expiry of BAE Land Materiel Maintenance Contract

Purpose To provide a response to the concerns raised by the National Secretary AustraliWl MWlufacturing Workers Union regarding employment implications of the expiry of BAE Land Materiel MaintenWlce Contract

Key Points

I On 31 51 JWluary 2013 Mr Paul Bastion the National Secretary Australian Manufacturing Workers Union wrote to the Honourable Minister Jason Clare Minister of Parliament regarding employment implications of the expiry of Defences Land Materiel Maintenance Contract with BAE Systems Australia (BAESA) His concerns specifically relate 10 the potential impact on the BAESA workforce

2 The background to the re-tender of the ~d Materiel Maintenance Contract is provided at attachment A A copy of the letter from Mr Bastian is provided at attactunent B The letter was not copied to any other parties

3 In relation to the concerns raised by Mr Bastian Defence has engaged in regular consultation with union representatives regarding the potential impacts of the expiry of the connct on the Commonwealth workforce This engagement has not included discussions regarding BAESA employees as this is a matter for BAESA However the A WMU has been invited to and participated in following formal consultation activities

a) 29 June 2012 - Teleconference with Commander Joint Logistics (CJLOG) and CPSU APESMA NUWand AMWU This teleconference provided an overview of the Defence Logistics Transfonnation Program (DLTP) proposed commonwealth workforce reductions and timeframe for the consultation period

b) 14 August 2012 - Draft organisation structures with Ihe draft StaffTransition Plan (STP) were e-mailed tOlheCPSU APESMANUW and AMWU for comment An initial three week consultation period was provided however this was extended to five weeks at the request of the CPSu

c) 28 August 2012 - Updated documents (STP Wld orgWlisational struclures) along with an overview of feedback received to date was e-mailed to the CPSU APESMA NUW and AMWU

d) 3J August 2012 - A teleconference between CJLOG and tne NUW APESMA and AMWU occurred (CPSU did not attend) The meeting allowed the unions to provide feedback to CJLOG

Page 1 ofS

UNCLASSIFIED

UNCLASSIFIED ClareIMC 13-000296

Reference JLCOUT12013177

e) 5 September 2012 - An updated document that provided a Compilation of union and workforce feedback on the proposed changes was distributed to the CPSU APESMA NUW and AMWU

f) II October 2012 - A final meeting with the unions was held No objection was raised to the proposed structure Implementation was then commenced

4 As the Land Materiel Maintenance Services Retender process is currently ongoing confidentiality regarding its status must be tightly maintained until the negotiations are concluded and a contract awarded

Recommendations

That you

i Note that Defence has consulted with unions including the AMWU on the employment impHcations for the Commonwealth workforce related to the expiry of the Land Materiel Maintenance Contract with BAESA

Noted I Please Discuss

Ii Sign the letter to Mr Bastian responding to the concerns raised in his Jetter of31 January 2013

Signed I Not Signed

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

~ebruary 2013 Phone (03) 9282 7039 I Contact Officer Mr David McGahey

-------

Primary Addressee

Information Addressee

Noted I Please Discuss

Mike Kelly I I

Stephen Smith I I

Page 2 of8

UNCLASSIFIED

UNCLASSIFIED ClareMC13middot000296

Reference JLCOUT120 1377

Resources

5~ NA

Consultation

6 NA

Conflict of Interest

7 NA

Attachments

A Background

B Letter from Mr Paul Bastian to The Hon Jason Clare MP dated 31 January 2013

C Talking points

D Draft letter to Mr Paul Bastion from The Hon Dr Mike KeUy MP

Page 3 of8

UNCLASSIFJED

UNCLASSIFIED FOl3371213 Item 1

Attachment A Serial 14

BA CKGROUND INFORMATION - MINDM Response to Paul Bastian AMWU Regarding Employment Implications ofExpiry of

BAE Land Materiel Maintenallce Contract

1 A Request for Tender (RFT) was released for Land Materiel Maintenance (LMM) services on 29 June 2012 The tender closed on 24 September 2012

2 The tender process is continuing and on schedule to have new contractual arrangement in place by 30 June 2013 The outcomes of the LMM tender process have not yet concluded and remain Commercial-In-Confidence

3 The draft contract attached to the RFT for LMM Services included a contractual requirement that the successful contractor is to comply with Australian Governments Fair Work Principl es

4 In accordance with the RFT for LMM Services and the Australian Governments Fair Work Principles compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement

5 The Fair Work Principles state that the Australian Government does not support the adoption ofcontracting arrangements to undennine the entitlements ofemployees and that the Australian Government expects that in conduc~ing their businesses government contractors meet public expectations of fair and reasonable workplace practices

6 The transition ofbusiness arrangements is regulated by the Fair Work Act and there is nothing in the RFT or draft contract which precludes such a transition from occurring

UNCLASSIFIED

J-Halllet) 1- f FOl3371213 Item 1 Serial 15

31 January 2013

AMWUThe Hon Jason Clare MP Minister for Defence Materiel Parliament House Canberra ACT 2600 Email JasonClareMPaphgovau

Dear Minister Clare

Re EmRlo~ment Implications of Expiry of BAE Land Materiel Maintenance Contract

We write to seek your offices immediate advice and assistance in relallon to our members currenlly employed by BAE $ystems in delivering the Land Maleriel Maintenance contract to your Department

We have been advised by members from numerous sites that BAE Systems has been unsuccessful in Its bid for a new national contract to continue to supply this work and the current contract is set to expire on June 30 this year

Despite BAE management advising our Detegates that they have not been successful in the bid of the contract there has been no ormal briefing of the implications for workers and their families

As you can imagine this lack of information about their ongoing security of employment what this means for their future employment their entillements and whether they will be provided with transitional arrangements to the successful bidder is deeply troubling to our members their families and communities

To satisfy their Immediate concerns we are seeking an urgent meeting with you to gain an understanding of the following

bull the current status of the bidding process bull the transitional employment arrangements for current BAE workers that any successful

bidder will meet as part of being awarded the contract bull whether any job losses are anticipated as a result of the decision to appoint a Single service

provider for each sector to achieve efficient and effective deliverymiddot bull other assurances your office can provide to workers their families and communities about

their on-going employment status and bull whether this has wider implications for other defence contracts such as warehousing and

distribution contract

We will be in contact with your office to arrange a suitable meeting time

AUJl1I81in Manulaclul10g WQrioU~on

Regislerellllamp AFMEPKIU NationI OllIe Lllyel~

33 Parramalla Road GrnnYlUe NSW 2142 TelephlnO 02 esse 15to Fac5unlie 02881119274 allWUamwu No-U

sr1ationsl adminislralioncorresnational secreterynal see leners 13pb213D38doc

UNCLASSIFIED

FOl3371213 Item 1 Attachment C Serial 16

MINDM RESPONSE TO PAUL BASTIAN AMWU REGARDING EMPLOYMENT IMPLICA TIONS OF EXPIRY OF BAE LAND

MA TERIEL MAINTENANCE CONTRACT

MINISTERIAL TALKING POINTS bull If MINDM is asked the current status of the bidding process

Response The tender process is continuing and on schedule to

have new contractual arrangement in place by 30 June 2013 The

outcomes of the Land Materiel Maintenance tender process have not

yet concluded and remain Commercial-In-Confidence

bull IfMINDM is asked if there are wider implications for other

Defence such as warehousing and distribution

Response A RFT for Warehousing and Distribution closed on 24

September 2012 This tender process is continuing and remains

Commercial-In-Confidence The outcome of this tender process

may have employment implications for the current contractor

workforce

bull If MINDM is asked if any job losses are anticipated

Response Defence is limited to provide comment on the

Commonwealth workforce and any proposed changes within BAE

would be subject to comment from BAE Further comment is not

appropriate until the tender process has concluded

UNCLASSIFIED

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

-r

-CJ--=~ middot~O u-_

I~~ H~PtA) _

y I K II (It-~ 1Iin-~ iii r-ot ~

-- t_

CI

c~~~ ~

Lk eI~Ross Island Tow~sville

-___ t-

- -~ -=

bull ~ - - KMad1lssan Coo 0 t w~~ - w- __ ~

~- ~ t~ ttL_ ( ~ ~ bull 1

til ~ - - u-- o

~~Q)~MaCkay ~--l - -~~~ ~) ~ bull bull 11 0 ~ -~__ o

---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

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~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

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- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 8: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

Australian Government

Dqlartmenl or Ddence ----

UNCLASSIFIED ClarelMC13-000296

Reference JLCIOUT2013177

FOl3371213 MINISTERIAL REPRESENTATION litem 1 ________________J Serial 13

L-______J

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Materiel Througb VCDF

For Info MINDEF Copies to Secnlary C[)F V([)F FASMECC

Subject MINDM Response to Paul Bastian AMWU Regarding Emplovment Implications of Expiry of BAE Land Materiel Maintenance Contract

Purpose To provide a response to the concerns raised by the National Secretary AustraliWl MWlufacturing Workers Union regarding employment implications of the expiry of BAE Land Materiel MaintenWlce Contract

Key Points

I On 31 51 JWluary 2013 Mr Paul Bastion the National Secretary Australian Manufacturing Workers Union wrote to the Honourable Minister Jason Clare Minister of Parliament regarding employment implications of the expiry of Defences Land Materiel Maintenance Contract with BAE Systems Australia (BAESA) His concerns specifically relate 10 the potential impact on the BAESA workforce

2 The background to the re-tender of the ~d Materiel Maintenance Contract is provided at attachment A A copy of the letter from Mr Bastian is provided at attactunent B The letter was not copied to any other parties

3 In relation to the concerns raised by Mr Bastian Defence has engaged in regular consultation with union representatives regarding the potential impacts of the expiry of the connct on the Commonwealth workforce This engagement has not included discussions regarding BAESA employees as this is a matter for BAESA However the A WMU has been invited to and participated in following formal consultation activities

a) 29 June 2012 - Teleconference with Commander Joint Logistics (CJLOG) and CPSU APESMA NUWand AMWU This teleconference provided an overview of the Defence Logistics Transfonnation Program (DLTP) proposed commonwealth workforce reductions and timeframe for the consultation period

b) 14 August 2012 - Draft organisation structures with Ihe draft StaffTransition Plan (STP) were e-mailed tOlheCPSU APESMANUW and AMWU for comment An initial three week consultation period was provided however this was extended to five weeks at the request of the CPSu

c) 28 August 2012 - Updated documents (STP Wld orgWlisational struclures) along with an overview of feedback received to date was e-mailed to the CPSU APESMA NUW and AMWU

d) 3J August 2012 - A teleconference between CJLOG and tne NUW APESMA and AMWU occurred (CPSU did not attend) The meeting allowed the unions to provide feedback to CJLOG

Page 1 ofS

UNCLASSIFIED

UNCLASSIFIED ClareIMC 13-000296

Reference JLCOUT12013177

e) 5 September 2012 - An updated document that provided a Compilation of union and workforce feedback on the proposed changes was distributed to the CPSU APESMA NUW and AMWU

f) II October 2012 - A final meeting with the unions was held No objection was raised to the proposed structure Implementation was then commenced

4 As the Land Materiel Maintenance Services Retender process is currently ongoing confidentiality regarding its status must be tightly maintained until the negotiations are concluded and a contract awarded

Recommendations

That you

i Note that Defence has consulted with unions including the AMWU on the employment impHcations for the Commonwealth workforce related to the expiry of the Land Materiel Maintenance Contract with BAESA

Noted I Please Discuss

Ii Sign the letter to Mr Bastian responding to the concerns raised in his Jetter of31 January 2013

Signed I Not Signed

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

~ebruary 2013 Phone (03) 9282 7039 I Contact Officer Mr David McGahey

-------

Primary Addressee

Information Addressee

Noted I Please Discuss

Mike Kelly I I

Stephen Smith I I

Page 2 of8

UNCLASSIFIED

UNCLASSIFIED ClareMC13middot000296

Reference JLCOUT120 1377

Resources

5~ NA

Consultation

6 NA

Conflict of Interest

7 NA

Attachments

A Background

B Letter from Mr Paul Bastian to The Hon Jason Clare MP dated 31 January 2013

C Talking points

D Draft letter to Mr Paul Bastion from The Hon Dr Mike KeUy MP

Page 3 of8

UNCLASSIFJED

UNCLASSIFIED FOl3371213 Item 1

Attachment A Serial 14

BA CKGROUND INFORMATION - MINDM Response to Paul Bastian AMWU Regarding Employment Implications ofExpiry of

BAE Land Materiel Maintenallce Contract

1 A Request for Tender (RFT) was released for Land Materiel Maintenance (LMM) services on 29 June 2012 The tender closed on 24 September 2012

2 The tender process is continuing and on schedule to have new contractual arrangement in place by 30 June 2013 The outcomes of the LMM tender process have not yet concluded and remain Commercial-In-Confidence

3 The draft contract attached to the RFT for LMM Services included a contractual requirement that the successful contractor is to comply with Australian Governments Fair Work Principl es

4 In accordance with the RFT for LMM Services and the Australian Governments Fair Work Principles compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement

5 The Fair Work Principles state that the Australian Government does not support the adoption ofcontracting arrangements to undennine the entitlements ofemployees and that the Australian Government expects that in conduc~ing their businesses government contractors meet public expectations of fair and reasonable workplace practices

6 The transition ofbusiness arrangements is regulated by the Fair Work Act and there is nothing in the RFT or draft contract which precludes such a transition from occurring

UNCLASSIFIED

J-Halllet) 1- f FOl3371213 Item 1 Serial 15

31 January 2013

AMWUThe Hon Jason Clare MP Minister for Defence Materiel Parliament House Canberra ACT 2600 Email JasonClareMPaphgovau

Dear Minister Clare

Re EmRlo~ment Implications of Expiry of BAE Land Materiel Maintenance Contract

We write to seek your offices immediate advice and assistance in relallon to our members currenlly employed by BAE $ystems in delivering the Land Maleriel Maintenance contract to your Department

We have been advised by members from numerous sites that BAE Systems has been unsuccessful in Its bid for a new national contract to continue to supply this work and the current contract is set to expire on June 30 this year

Despite BAE management advising our Detegates that they have not been successful in the bid of the contract there has been no ormal briefing of the implications for workers and their families

As you can imagine this lack of information about their ongoing security of employment what this means for their future employment their entillements and whether they will be provided with transitional arrangements to the successful bidder is deeply troubling to our members their families and communities

To satisfy their Immediate concerns we are seeking an urgent meeting with you to gain an understanding of the following

bull the current status of the bidding process bull the transitional employment arrangements for current BAE workers that any successful

bidder will meet as part of being awarded the contract bull whether any job losses are anticipated as a result of the decision to appoint a Single service

provider for each sector to achieve efficient and effective deliverymiddot bull other assurances your office can provide to workers their families and communities about

their on-going employment status and bull whether this has wider implications for other defence contracts such as warehousing and

distribution contract

We will be in contact with your office to arrange a suitable meeting time

AUJl1I81in Manulaclul10g WQrioU~on

Regislerellllamp AFMEPKIU NationI OllIe Lllyel~

33 Parramalla Road GrnnYlUe NSW 2142 TelephlnO 02 esse 15to Fac5unlie 02881119274 allWUamwu No-U

sr1ationsl adminislralioncorresnational secreterynal see leners 13pb213D38doc

UNCLASSIFIED

FOl3371213 Item 1 Attachment C Serial 16

MINDM RESPONSE TO PAUL BASTIAN AMWU REGARDING EMPLOYMENT IMPLICA TIONS OF EXPIRY OF BAE LAND

MA TERIEL MAINTENANCE CONTRACT

MINISTERIAL TALKING POINTS bull If MINDM is asked the current status of the bidding process

Response The tender process is continuing and on schedule to

have new contractual arrangement in place by 30 June 2013 The

outcomes of the Land Materiel Maintenance tender process have not

yet concluded and remain Commercial-In-Confidence

bull IfMINDM is asked if there are wider implications for other

Defence such as warehousing and distribution

Response A RFT for Warehousing and Distribution closed on 24

September 2012 This tender process is continuing and remains

Commercial-In-Confidence The outcome of this tender process

may have employment implications for the current contractor

workforce

bull If MINDM is asked if any job losses are anticipated

Response Defence is limited to provide comment on the

Commonwealth workforce and any proposed changes within BAE

would be subject to comment from BAE Further comment is not

appropriate until the tender process has concluded

UNCLASSIFIED

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

-r

-CJ--=~ middot~O u-_

I~~ H~PtA) _

y I K II (It-~ 1Iin-~ iii r-ot ~

-- t_

CI

c~~~ ~

Lk eI~Ross Island Tow~sville

-___ t-

- -~ -=

bull ~ - - KMad1lssan Coo 0 t w~~ - w- __ ~

~- ~ t~ ttL_ ( ~ ~ bull 1

til ~ - - u-- o

~~Q)~MaCkay ~--l - -~~~ ~) ~ bull bull 11 0 ~ -~__ o

---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

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Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

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AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

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I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

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Name ~ppoiDtme~t DTG

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

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  • 1pdf
  • 2pdf
Page 9: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

UNCLASSIFIED ClareIMC 13-000296

Reference JLCOUT12013177

e) 5 September 2012 - An updated document that provided a Compilation of union and workforce feedback on the proposed changes was distributed to the CPSU APESMA NUW and AMWU

f) II October 2012 - A final meeting with the unions was held No objection was raised to the proposed structure Implementation was then commenced

4 As the Land Materiel Maintenance Services Retender process is currently ongoing confidentiality regarding its status must be tightly maintained until the negotiations are concluded and a contract awarded

Recommendations

That you

i Note that Defence has consulted with unions including the AMWU on the employment impHcations for the Commonwealth workforce related to the expiry of the Land Materiel Maintenance Contract with BAESA

Noted I Please Discuss

Ii Sign the letter to Mr Bastian responding to the concerns raised in his Jetter of31 January 2013

Signed I Not Signed

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

~ebruary 2013 Phone (03) 9282 7039 I Contact Officer Mr David McGahey

-------

Primary Addressee

Information Addressee

Noted I Please Discuss

Mike Kelly I I

Stephen Smith I I

Page 2 of8

UNCLASSIFIED

UNCLASSIFIED ClareMC13middot000296

Reference JLCOUT120 1377

Resources

5~ NA

Consultation

6 NA

Conflict of Interest

7 NA

Attachments

A Background

B Letter from Mr Paul Bastian to The Hon Jason Clare MP dated 31 January 2013

C Talking points

D Draft letter to Mr Paul Bastion from The Hon Dr Mike KeUy MP

Page 3 of8

UNCLASSIFJED

UNCLASSIFIED FOl3371213 Item 1

Attachment A Serial 14

BA CKGROUND INFORMATION - MINDM Response to Paul Bastian AMWU Regarding Employment Implications ofExpiry of

BAE Land Materiel Maintenallce Contract

1 A Request for Tender (RFT) was released for Land Materiel Maintenance (LMM) services on 29 June 2012 The tender closed on 24 September 2012

2 The tender process is continuing and on schedule to have new contractual arrangement in place by 30 June 2013 The outcomes of the LMM tender process have not yet concluded and remain Commercial-In-Confidence

3 The draft contract attached to the RFT for LMM Services included a contractual requirement that the successful contractor is to comply with Australian Governments Fair Work Principl es

4 In accordance with the RFT for LMM Services and the Australian Governments Fair Work Principles compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement

5 The Fair Work Principles state that the Australian Government does not support the adoption ofcontracting arrangements to undennine the entitlements ofemployees and that the Australian Government expects that in conduc~ing their businesses government contractors meet public expectations of fair and reasonable workplace practices

6 The transition ofbusiness arrangements is regulated by the Fair Work Act and there is nothing in the RFT or draft contract which precludes such a transition from occurring

UNCLASSIFIED

J-Halllet) 1- f FOl3371213 Item 1 Serial 15

31 January 2013

AMWUThe Hon Jason Clare MP Minister for Defence Materiel Parliament House Canberra ACT 2600 Email JasonClareMPaphgovau

Dear Minister Clare

Re EmRlo~ment Implications of Expiry of BAE Land Materiel Maintenance Contract

We write to seek your offices immediate advice and assistance in relallon to our members currenlly employed by BAE $ystems in delivering the Land Maleriel Maintenance contract to your Department

We have been advised by members from numerous sites that BAE Systems has been unsuccessful in Its bid for a new national contract to continue to supply this work and the current contract is set to expire on June 30 this year

Despite BAE management advising our Detegates that they have not been successful in the bid of the contract there has been no ormal briefing of the implications for workers and their families

As you can imagine this lack of information about their ongoing security of employment what this means for their future employment their entillements and whether they will be provided with transitional arrangements to the successful bidder is deeply troubling to our members their families and communities

To satisfy their Immediate concerns we are seeking an urgent meeting with you to gain an understanding of the following

bull the current status of the bidding process bull the transitional employment arrangements for current BAE workers that any successful

bidder will meet as part of being awarded the contract bull whether any job losses are anticipated as a result of the decision to appoint a Single service

provider for each sector to achieve efficient and effective deliverymiddot bull other assurances your office can provide to workers their families and communities about

their on-going employment status and bull whether this has wider implications for other defence contracts such as warehousing and

distribution contract

We will be in contact with your office to arrange a suitable meeting time

AUJl1I81in Manulaclul10g WQrioU~on

Regislerellllamp AFMEPKIU NationI OllIe Lllyel~

33 Parramalla Road GrnnYlUe NSW 2142 TelephlnO 02 esse 15to Fac5unlie 02881119274 allWUamwu No-U

sr1ationsl adminislralioncorresnational secreterynal see leners 13pb213D38doc

UNCLASSIFIED

FOl3371213 Item 1 Attachment C Serial 16

MINDM RESPONSE TO PAUL BASTIAN AMWU REGARDING EMPLOYMENT IMPLICA TIONS OF EXPIRY OF BAE LAND

MA TERIEL MAINTENANCE CONTRACT

MINISTERIAL TALKING POINTS bull If MINDM is asked the current status of the bidding process

Response The tender process is continuing and on schedule to

have new contractual arrangement in place by 30 June 2013 The

outcomes of the Land Materiel Maintenance tender process have not

yet concluded and remain Commercial-In-Confidence

bull IfMINDM is asked if there are wider implications for other

Defence such as warehousing and distribution

Response A RFT for Warehousing and Distribution closed on 24

September 2012 This tender process is continuing and remains

Commercial-In-Confidence The outcome of this tender process

may have employment implications for the current contractor

workforce

bull If MINDM is asked if any job losses are anticipated

Response Defence is limited to provide comment on the

Commonwealth workforce and any proposed changes within BAE

would be subject to comment from BAE Further comment is not

appropriate until the tender process has concluded

UNCLASSIFIED

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

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responsibility Rockhampton ~~ - ~~_ __

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Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

$4-

tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

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AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

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Name ~ppoiDtme~t DTG

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COLA Maclean

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Cltuf~d by (Subject matter expert)

MrD McGahey

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  • 1pdf
  • 2pdf
Page 10: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

UNCLASSIFIED ClareMC13middot000296

Reference JLCOUT120 1377

Resources

5~ NA

Consultation

6 NA

Conflict of Interest

7 NA

Attachments

A Background

B Letter from Mr Paul Bastian to The Hon Jason Clare MP dated 31 January 2013

C Talking points

D Draft letter to Mr Paul Bastion from The Hon Dr Mike KeUy MP

Page 3 of8

UNCLASSIFJED

UNCLASSIFIED FOl3371213 Item 1

Attachment A Serial 14

BA CKGROUND INFORMATION - MINDM Response to Paul Bastian AMWU Regarding Employment Implications ofExpiry of

BAE Land Materiel Maintenallce Contract

1 A Request for Tender (RFT) was released for Land Materiel Maintenance (LMM) services on 29 June 2012 The tender closed on 24 September 2012

2 The tender process is continuing and on schedule to have new contractual arrangement in place by 30 June 2013 The outcomes of the LMM tender process have not yet concluded and remain Commercial-In-Confidence

3 The draft contract attached to the RFT for LMM Services included a contractual requirement that the successful contractor is to comply with Australian Governments Fair Work Principl es

4 In accordance with the RFT for LMM Services and the Australian Governments Fair Work Principles compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement

5 The Fair Work Principles state that the Australian Government does not support the adoption ofcontracting arrangements to undennine the entitlements ofemployees and that the Australian Government expects that in conduc~ing their businesses government contractors meet public expectations of fair and reasonable workplace practices

6 The transition ofbusiness arrangements is regulated by the Fair Work Act and there is nothing in the RFT or draft contract which precludes such a transition from occurring

UNCLASSIFIED

J-Halllet) 1- f FOl3371213 Item 1 Serial 15

31 January 2013

AMWUThe Hon Jason Clare MP Minister for Defence Materiel Parliament House Canberra ACT 2600 Email JasonClareMPaphgovau

Dear Minister Clare

Re EmRlo~ment Implications of Expiry of BAE Land Materiel Maintenance Contract

We write to seek your offices immediate advice and assistance in relallon to our members currenlly employed by BAE $ystems in delivering the Land Maleriel Maintenance contract to your Department

We have been advised by members from numerous sites that BAE Systems has been unsuccessful in Its bid for a new national contract to continue to supply this work and the current contract is set to expire on June 30 this year

Despite BAE management advising our Detegates that they have not been successful in the bid of the contract there has been no ormal briefing of the implications for workers and their families

As you can imagine this lack of information about their ongoing security of employment what this means for their future employment their entillements and whether they will be provided with transitional arrangements to the successful bidder is deeply troubling to our members their families and communities

To satisfy their Immediate concerns we are seeking an urgent meeting with you to gain an understanding of the following

bull the current status of the bidding process bull the transitional employment arrangements for current BAE workers that any successful

bidder will meet as part of being awarded the contract bull whether any job losses are anticipated as a result of the decision to appoint a Single service

provider for each sector to achieve efficient and effective deliverymiddot bull other assurances your office can provide to workers their families and communities about

their on-going employment status and bull whether this has wider implications for other defence contracts such as warehousing and

distribution contract

We will be in contact with your office to arrange a suitable meeting time

AUJl1I81in Manulaclul10g WQrioU~on

Regislerellllamp AFMEPKIU NationI OllIe Lllyel~

33 Parramalla Road GrnnYlUe NSW 2142 TelephlnO 02 esse 15to Fac5unlie 02881119274 allWUamwu No-U

sr1ationsl adminislralioncorresnational secreterynal see leners 13pb213D38doc

UNCLASSIFIED

FOl3371213 Item 1 Attachment C Serial 16

MINDM RESPONSE TO PAUL BASTIAN AMWU REGARDING EMPLOYMENT IMPLICA TIONS OF EXPIRY OF BAE LAND

MA TERIEL MAINTENANCE CONTRACT

MINISTERIAL TALKING POINTS bull If MINDM is asked the current status of the bidding process

Response The tender process is continuing and on schedule to

have new contractual arrangement in place by 30 June 2013 The

outcomes of the Land Materiel Maintenance tender process have not

yet concluded and remain Commercial-In-Confidence

bull IfMINDM is asked if there are wider implications for other

Defence such as warehousing and distribution

Response A RFT for Warehousing and Distribution closed on 24

September 2012 This tender process is continuing and remains

Commercial-In-Confidence The outcome of this tender process

may have employment implications for the current contractor

workforce

bull If MINDM is asked if any job losses are anticipated

Response Defence is limited to provide comment on the

Commonwealth workforce and any proposed changes within BAE

would be subject to comment from BAE Further comment is not

appropriate until the tender process has concluded

UNCLASSIFIED

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

-r

-CJ--=~ middot~O u-_

I~~ H~PtA) _

y I K II (It-~ 1Iin-~ iii r-ot ~

-- t_

CI

c~~~ ~

Lk eI~Ross Island Tow~sville

-___ t-

- -~ -=

bull ~ - - KMad1lssan Coo 0 t w~~ - w- __ ~

~- ~ t~ ttL_ ( ~ ~ bull 1

til ~ - - u-- o

~~Q)~MaCkay ~--l - -~~~ ~) ~ bull bull 11 0 ~ -~__ o

---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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8 11N~work 10 nnsIliGD to1ht new ~d ialfgnifialnlezd 0IIr ~ il dld 11kIdClfOM fer ddt ~lJ [I OptIDIIIl ~WUI k _1mpIiIaIf0Rl4llllld~ With 1liiY ddl in the implcmcoCllioi ofQIi npIAcancm CIIiIIRd Wampwtl1aftccilDftncomiddot capaCity to pmate dlC rcqulreduvma ttnush memo oflhe IatlltiCl~

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

1IIlI t1INIM ~ACT 21IlOO Tilt 1IIZ16l7nlOO Fbull02)WUlIa COMMERlCuINcONflDENCE

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMfERICAIN-CONPIDENtt

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

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(ASCAMor deleRllte) middotjohn And~n_

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 11: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

UNCLASSIFIED FOl3371213 Item 1

Attachment A Serial 14

BA CKGROUND INFORMATION - MINDM Response to Paul Bastian AMWU Regarding Employment Implications ofExpiry of

BAE Land Materiel Maintenallce Contract

1 A Request for Tender (RFT) was released for Land Materiel Maintenance (LMM) services on 29 June 2012 The tender closed on 24 September 2012

2 The tender process is continuing and on schedule to have new contractual arrangement in place by 30 June 2013 The outcomes of the LMM tender process have not yet concluded and remain Commercial-In-Confidence

3 The draft contract attached to the RFT for LMM Services included a contractual requirement that the successful contractor is to comply with Australian Governments Fair Work Principl es

4 In accordance with the RFT for LMM Services and the Australian Governments Fair Work Principles compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement

5 The Fair Work Principles state that the Australian Government does not support the adoption ofcontracting arrangements to undennine the entitlements ofemployees and that the Australian Government expects that in conduc~ing their businesses government contractors meet public expectations of fair and reasonable workplace practices

6 The transition ofbusiness arrangements is regulated by the Fair Work Act and there is nothing in the RFT or draft contract which precludes such a transition from occurring

UNCLASSIFIED

J-Halllet) 1- f FOl3371213 Item 1 Serial 15

31 January 2013

AMWUThe Hon Jason Clare MP Minister for Defence Materiel Parliament House Canberra ACT 2600 Email JasonClareMPaphgovau

Dear Minister Clare

Re EmRlo~ment Implications of Expiry of BAE Land Materiel Maintenance Contract

We write to seek your offices immediate advice and assistance in relallon to our members currenlly employed by BAE $ystems in delivering the Land Maleriel Maintenance contract to your Department

We have been advised by members from numerous sites that BAE Systems has been unsuccessful in Its bid for a new national contract to continue to supply this work and the current contract is set to expire on June 30 this year

Despite BAE management advising our Detegates that they have not been successful in the bid of the contract there has been no ormal briefing of the implications for workers and their families

As you can imagine this lack of information about their ongoing security of employment what this means for their future employment their entillements and whether they will be provided with transitional arrangements to the successful bidder is deeply troubling to our members their families and communities

To satisfy their Immediate concerns we are seeking an urgent meeting with you to gain an understanding of the following

bull the current status of the bidding process bull the transitional employment arrangements for current BAE workers that any successful

bidder will meet as part of being awarded the contract bull whether any job losses are anticipated as a result of the decision to appoint a Single service

provider for each sector to achieve efficient and effective deliverymiddot bull other assurances your office can provide to workers their families and communities about

their on-going employment status and bull whether this has wider implications for other defence contracts such as warehousing and

distribution contract

We will be in contact with your office to arrange a suitable meeting time

AUJl1I81in Manulaclul10g WQrioU~on

Regislerellllamp AFMEPKIU NationI OllIe Lllyel~

33 Parramalla Road GrnnYlUe NSW 2142 TelephlnO 02 esse 15to Fac5unlie 02881119274 allWUamwu No-U

sr1ationsl adminislralioncorresnational secreterynal see leners 13pb213D38doc

UNCLASSIFIED

FOl3371213 Item 1 Attachment C Serial 16

MINDM RESPONSE TO PAUL BASTIAN AMWU REGARDING EMPLOYMENT IMPLICA TIONS OF EXPIRY OF BAE LAND

MA TERIEL MAINTENANCE CONTRACT

MINISTERIAL TALKING POINTS bull If MINDM is asked the current status of the bidding process

Response The tender process is continuing and on schedule to

have new contractual arrangement in place by 30 June 2013 The

outcomes of the Land Materiel Maintenance tender process have not

yet concluded and remain Commercial-In-Confidence

bull IfMINDM is asked if there are wider implications for other

Defence such as warehousing and distribution

Response A RFT for Warehousing and Distribution closed on 24

September 2012 This tender process is continuing and remains

Commercial-In-Confidence The outcome of this tender process

may have employment implications for the current contractor

workforce

bull If MINDM is asked if any job losses are anticipated

Response Defence is limited to provide comment on the

Commonwealth workforce and any proposed changes within BAE

would be subject to comment from BAE Further comment is not

appropriate until the tender process has concluded

UNCLASSIFIED

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

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FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

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I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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J

FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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AlllcbmrIu It ~ TlMlampblo ~ IUIJIIIIIIiIc key rmilltDDriS ii ~bDpIlIDCIIIUlion~ortbe~

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bull

r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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ii ~() be briercd on the DI~TP

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

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(ASCAMor deleRllte) middotjohn And~n_

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
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Page 12: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

J-Halllet) 1- f FOl3371213 Item 1 Serial 15

31 January 2013

AMWUThe Hon Jason Clare MP Minister for Defence Materiel Parliament House Canberra ACT 2600 Email JasonClareMPaphgovau

Dear Minister Clare

Re EmRlo~ment Implications of Expiry of BAE Land Materiel Maintenance Contract

We write to seek your offices immediate advice and assistance in relallon to our members currenlly employed by BAE $ystems in delivering the Land Maleriel Maintenance contract to your Department

We have been advised by members from numerous sites that BAE Systems has been unsuccessful in Its bid for a new national contract to continue to supply this work and the current contract is set to expire on June 30 this year

Despite BAE management advising our Detegates that they have not been successful in the bid of the contract there has been no ormal briefing of the implications for workers and their families

As you can imagine this lack of information about their ongoing security of employment what this means for their future employment their entillements and whether they will be provided with transitional arrangements to the successful bidder is deeply troubling to our members their families and communities

To satisfy their Immediate concerns we are seeking an urgent meeting with you to gain an understanding of the following

bull the current status of the bidding process bull the transitional employment arrangements for current BAE workers that any successful

bidder will meet as part of being awarded the contract bull whether any job losses are anticipated as a result of the decision to appoint a Single service

provider for each sector to achieve efficient and effective deliverymiddot bull other assurances your office can provide to workers their families and communities about

their on-going employment status and bull whether this has wider implications for other defence contracts such as warehousing and

distribution contract

We will be in contact with your office to arrange a suitable meeting time

AUJl1I81in Manulaclul10g WQrioU~on

Regislerellllamp AFMEPKIU NationI OllIe Lllyel~

33 Parramalla Road GrnnYlUe NSW 2142 TelephlnO 02 esse 15to Fac5unlie 02881119274 allWUamwu No-U

sr1ationsl adminislralioncorresnational secreterynal see leners 13pb213D38doc

UNCLASSIFIED

FOl3371213 Item 1 Attachment C Serial 16

MINDM RESPONSE TO PAUL BASTIAN AMWU REGARDING EMPLOYMENT IMPLICA TIONS OF EXPIRY OF BAE LAND

MA TERIEL MAINTENANCE CONTRACT

MINISTERIAL TALKING POINTS bull If MINDM is asked the current status of the bidding process

Response The tender process is continuing and on schedule to

have new contractual arrangement in place by 30 June 2013 The

outcomes of the Land Materiel Maintenance tender process have not

yet concluded and remain Commercial-In-Confidence

bull IfMINDM is asked if there are wider implications for other

Defence such as warehousing and distribution

Response A RFT for Warehousing and Distribution closed on 24

September 2012 This tender process is continuing and remains

Commercial-In-Confidence The outcome of this tender process

may have employment implications for the current contractor

workforce

bull If MINDM is asked if any job losses are anticipated

Response Defence is limited to provide comment on the

Commonwealth workforce and any proposed changes within BAE

would be subject to comment from BAE Further comment is not

appropriate until the tender process has concluded

UNCLASSIFIED

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

-r

-CJ--=~ middot~O u-_

I~~ H~PtA) _

y I K II (It-~ 1Iin-~ iii r-ot ~

-- t_

CI

c~~~ ~

Lk eI~Ross Island Tow~sville

-___ t-

- -~ -=

bull ~ - - KMad1lssan Coo 0 t w~~ - w- __ ~

~- ~ t~ ttL_ ( ~ ~ bull 1

til ~ - - u-- o

~~Q)~MaCkay ~--l - -~~~ ~) ~ bull bull 11 0 ~ -~__ o

---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

t

1IH~i[Uj IliUUi fl~llirjbi i iffill tlt ltJ1 IIampJ II

I hfl Uu fur ~~ t li iff 11Jiitr 1111(1 ~Irl i111-r fsi a II i 11111I bullriaz La nmiddot II ~I-a I (I (~ _ r -= 1r~~aI~

5 3 et I ~-JI jl~111 ~~IiiZ shy ~ iiI ~Iil II~ I5r

I B ~ ai t IfB bullbull S Ir Ii i )~ ~

Ii - roIItf~li IUUIlI gli~l~

l ~ll i ~ ll~ii fl~il f 8 ~lL1e 1lt1 If ii IIi ni~ middot iiti( 11111

lnrUlUil r bull sectIt I

~jtiii~1 IJII JUt enmmQ13-f ~l I t st or ~-lgt

W -J-

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

l i 1 I I I I t i

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bullbull

FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

L I

I I-- IJ_~

I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

v~ ~ f r- iy A~~LJl~ d-tL ~ i

bullJ I

iJ i

COMfERICAIN-CONPIDENtt

s47C

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_m___________ =middotmiddot~~======~~~==~~~~~=~-middot~middot-=

FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

I I I

COMMERlCA(INaJHPJDENCE

s47C

s47C

-- -Ii

I

FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

--~-

~ bullbull - = --_-

r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

~~

NGIid I Pleas Dlua ~

bull KfulCarr

_ i I I

Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

ii

r q -

FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 13: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

UNCLASSIFIED

FOl3371213 Item 1 Attachment C Serial 16

MINDM RESPONSE TO PAUL BASTIAN AMWU REGARDING EMPLOYMENT IMPLICA TIONS OF EXPIRY OF BAE LAND

MA TERIEL MAINTENANCE CONTRACT

MINISTERIAL TALKING POINTS bull If MINDM is asked the current status of the bidding process

Response The tender process is continuing and on schedule to

have new contractual arrangement in place by 30 June 2013 The

outcomes of the Land Materiel Maintenance tender process have not

yet concluded and remain Commercial-In-Confidence

bull IfMINDM is asked if there are wider implications for other

Defence such as warehousing and distribution

Response A RFT for Warehousing and Distribution closed on 24

September 2012 This tender process is continuing and remains

Commercial-In-Confidence The outcome of this tender process

may have employment implications for the current contractor

workforce

bull If MINDM is asked if any job losses are anticipated

Response Defence is limited to provide comment on the

Commonwealth workforce and any proposed changes within BAE

would be subject to comment from BAE Further comment is not

appropriate until the tender process has concluded

UNCLASSIFIED

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

-r

-CJ--=~ middot~O u-_

I~~ H~PtA) _

y I K II (It-~ 1Iin-~ iii r-ot ~

-- t_

CI

c~~~ ~

Lk eI~Ross Island Tow~sville

-___ t-

- -~ -=

bull ~ - - KMad1lssan Coo 0 t w~~ - w- __ ~

~- ~ t~ ttL_ ( ~ ~ bull 1

til ~ - - u-- o

~~Q)~MaCkay ~--l - -~~~ ~) ~ bull bull 11 0 ~ -~__ o

---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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CoIIIultdloa

16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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J

FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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AlllcbmrIu It ~ TlMlampblo ~ IUIJIIIIIIiIc key rmilltDDriS ii ~bDpIlIDCIIIUlion~ortbe~

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lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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bull

r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

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DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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ii ~() be briercd on the DI~TP

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

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- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 14: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

UNCLASSIFIED

Dlc)flml Ntllm A Ililoilli n 111111 OTG

TPs drafted by L TCOL L Grimes SODLTP 1200hrs

4 Feb 13 I

CIUWWht NlIlIc A JlP)iltllllt1111 I DTG

Subject Matter Expert Mr Dave McGahey PDDLTP 1700hrs

4 Feb 13

GroupService 1 Star or above RADM C Thomas

This information is consistent with advice provided to the Minister by other means (Eg QTB MinSub etc)

CJLOG ~ I

1fl- Yes

Strategic Communications Adviser

ASCAM or delegate

Millisler Name Appoilliment DTG

Ministerial Action

(To be completed by ASCAM)

Forward toCleared by

For III ff)ll11atil)ll

Regional Manager Public Affairs

Nwne Appoillimellt DTG

UNCLASSIFIED

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

-r

-CJ--=~ middot~O u-_

I~~ H~PtA) _

y I K II (It-~ 1Iin-~ iii r-ot ~

-- t_

CI

c~~~ ~

Lk eI~Ross Island Tow~sville

-___ t-

- -~ -=

bull ~ - - KMad1lssan Coo 0 t w~~ - w- __ ~

~- ~ t~ ttL_ ( ~ ~ bull 1

til ~ - - u-- o

~~Q)~MaCkay ~--l - -~~~ ~) ~ bull bull 11 0 ~ -~__ o

---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

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Name ~ppoiDtme~t DTG

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COLA Maclean

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Cltuf~d by (Subject matter expert)

MrD McGahey

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  • 1pdf
  • 2pdf
Page 15: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

UNCLASSIFIED

FOI 33711213 Item 1

Attachment D Serial 17

Mr Paul Bastian National Sectetary Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mr Bastian

Thank you for your letter of 31 January 2013 concerning the employment implications of expiry of the Defence contract with BAE Systems Australia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercial-In-Confidence However I can advise that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor s to comply with Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses govemment contractors meet public expectations of fair and reasonable workplace practices

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the COmmonwealths workforce on a number of occasions since the release of the Request for Tender on 29 June 2012 through to 11 October 2012 bull

I trust this information assists with the concerns you have raised in your letter and look forward to meeting with you later in the week

Yours sincerely

MIKE KELLY

UNCLASSIFIED

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

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FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

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Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

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c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

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bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

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1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

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~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

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v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

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Name ~ppoiDtme~t DTG

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

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  • 1pdf
  • 2pdf
Page 16: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

-----_---------- shy FOI 3371213 Item 1 Serial1B

The Hon Dr Mike Kelly AM MP Minister for Defence Materiel

Mr Paul Bastian National Secretary 11 FEB 2013 Australian Manufacturing Workers Union Nation Office Level 4 133 Parramatta Road GRANVILLE NSW 2142

Dear Mrtn fA Thank you for your letter of05 Febroary 2013 concerning the emp10yment implications of expiry of the Department ofDefence contract with BAH Systems AustraJia for Land Materiel Maintenance Services

As the Land Materiel Maintenance tender process is currently ongoing it remains Commercialmiddotln-Confidence However I am advised that the draft contract included as part of the Request for Tender documentation specifies the requirement for the successful contractor to comply with the Australian Governments Fair Work Principles Compliance with the Fair Work Act 2009 is a condition for participation in the tender process Defence will ensure that empJoyee entitlements are protected in accordance with the law

I have also been advised that Defence has engaged in formal consultation with the Australian Manufacturing Workers Union regarding the potential impact on the Commonwealths workforce on a number ofoccasions si nce the release ofthe Request for Tender on 29 June 2012 through to 11 October 2012

I trust this information assist with the concerns you have raised in your Jetter and look forward to meeting with you at the ne~t availabJe opportunity

Yours sincerely

MIKE KELLY

P8Iliament House Canbe~ ACT 2600 Tel (02) 6277 7730

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

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FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

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~~Q)~MaCkay ~--l - -~~~ ~) ~ bull bull 11 0 ~ -~__ o

---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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J

FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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AlllcbmrIu It ~ TlMlampblo ~ IUIJIIIIIIiIc key rmilltDDriS ii ~bDpIlIDCIIIUlion~ortbe~

DIDSamtnd

lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

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bull

r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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ii ~() be briercd on the DI~TP

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 17: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

UNCLASSIFIED

Attachment D

FOl3371213 Item 1 Serial 19

Jill Hall MP Federal Member for Shortland PO Box 499

BELMONT NSW 2280

Dear Jill

Thank you for your letter of 19 February 2013 concerning the renewal of the Department of Defence Warehousing and Distribution (WampO) contract and the concerns raised byf7_F____I

regarding the implications for employees of the current contractor

As the WampD tender process is currently ongoing it remains Commercial-In-Confidence However J can advise that the draft contract included as part of the Request for Tender documentation specifies the requirements for the successful contractor is to comply with Australian Governments Fair Work Principles Compliance with the Pair Work Act 2009 is a condition of participation under Australian Government Procurement and the Australian Government expects that in conducting their businesses government contractors meet public expectations of fair and reasonable workplace practices

Should the tender process result in a change in W ampD service provider the transfer of business arrangements are regulated by the Fair Work Act 2009 and are largely the responsibility of the service providers There is nothing in the RFT or draft contract that precludes such a transfer from occurring

I trust this information assists with the concerns you have raised on-~~~_F_~__behalf

Yours sincerely

MIKE KELLY

UNCLASSIFIED

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

-r

-CJ--=~ middot~O u-_

I~~ H~PtA) _

y I K II (It-~ 1Iin-~ iii r-ot ~

-- t_

CI

c~~~ ~

Lk eI~Ross Island Tow~sville

-___ t-

- -~ -=

bull ~ - - KMad1lssan Coo 0 t w~~ - w- __ ~

~- ~ t~ ttL_ ( ~ ~ bull 1

til ~ - - u-- o

~~Q)~MaCkay ~--l - -~~~ ~) ~ bull bull 11 0 ~ -~__ o

---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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COMMERClAL-INcoNFIDENCE

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OOYcnlrDaiIconlldrnXI die DIDSl render EvtluIdcm ~ TcabnolllllbleqoenUy JIlQCIimrec1 ~ofcllcr

IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

1IIlI t1INIM ~ACT 21IlOO Tilt 1IIZ16l7nlOO Fbull02)WUlIa COMMERlCuINcONflDENCE

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

I I I

COMMERlCA(INaJHPJDENCE

s47C

s47C

-- -Ii

I

FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

--~-

~ bullbull - = --_-

r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

~~

NGIid I Pleas Dlua ~

bull KfulCarr

_ i I I

Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

ii

r q -

FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 18: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

COVERING I SmithMA13()OlOI 1

COMMERCIAL-eN-CONFIDENCEI J I I Reference H_(OmiddotJi zol~ 1

FOl3371213 Item 1

Australian Government Serial 21MINISTERIAL SUBMISSION DepartmcDt of Ddenct

Date Dept Approved Date Rec in Office Date Due

For Action Minister for Defence Through VCDF CopiC$ to SecreUlry CDF DCEO DMO FASMECC DEPSEC DSRG

Subject Advise MINDEF of DLTP meeting to update Senator McDonald on 21 Mar 13

Purpose To advise you of a meeting between Defence representatives and Senator Macdonald on 21 March 2013

to update Senator Macdonald on the Defence Logistic Transfonnation Program (DL TP)

Key Points

I At the Senate Estimates hearing held on 13 February 2013 an offer was made by the Vice Chief of the Defence Force to Senator Macdonald for the provision of an update on the DLTP (noted on Page 51 of the Hansard transcript extract at attachment A)

2 Commander Joint Logistics (CJLOG) and Program Director DLTP (PO DLTP) are scheduled to meet with Senator Macdonald to provide the DLTP update at 1100 hours on 21 March 2013

3 A Microsoft PowerPoint presentation (attachment B) is to be delivered to Senator Macdonald to facilitate the DLTP update

Recom mcndation

That you

I Note tbat CJLOG and PD DLTP will provide an update brief to Senator McDonald regarding DLTP on 21 March 2013

Noted I Please Discuss

11 Note the Microsoft PowerPoint presentation at attachment B is to be delivered to facilitate this update

Noted I Please Discuss

Approved By

CW THOMAS Rear Admiral Commander Joint Logistics

7 March 2013

Contact Officer Mr David McGahey Phone (03) 9282 7039 ~7F I

Page I of2 COVERING

COMMERCIAL-IN-CONFIDENCE

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

~~~~0shy

FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

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Lk eI~Ross Island Tow~sville

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- -~ -=

bull ~ - - KMad1lssan Coo 0 t w~~ - w- __ ~

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---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

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responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

l i 1 I I I I t i

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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L I

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMfERICAIN-CONPIDENtt

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

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r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

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ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

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Name ~ppoiDtme~t DTG

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

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FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 19: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

COVERING SmithIMA 13-001 011 COMMERCIAL-IN-CONFIDENCE

Reference 7Lf_twT)01lltil

Primary Addressee

Stephen Smith I I

Resources

4 NA

Consultation

5 NA

Attacbments A Hansard Extract - Senate Estimates 13 February 2013

B DLTP Brief to Senator Macdonald by CJLOG and PD DLTP- 21 March 2013

Page 2 of2 COVERING

COMMERClAL-IN-CONFIDENCE

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

-71--1 ~~P bull ~ ~

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FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

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responsibility Rockhampton ~~ - ~~_ __

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I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

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B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

0--------------------- _ bull

COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

1 t I

I

COMME1lICAL-IN-CONFlDEHCE

II

1

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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17 m ZOtl

CiRfalNAL HAND DEUVERED

I I

L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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2

Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

l i 1 I I I I t i

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bullbull

FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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L I

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

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Name ~ppoiDtme~t DTG

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

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  • 1pdf
  • 2pdf
Page 20: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

FOl3371213 Item 1 Wednesday 13 February 2013 Senate----------------------lSerial 22 Page 51

Air Marshal Binskin The current facilities there while being replaced provide the current level of support that we need

Senator IAN MACDONALD That begs the question why replace them I would be interested in that answer some day but perhaps not now

Air Marshal Binskin I can offer you ashy

Senator IAN MACDONALD More efficiently

Air Marshal Binskin t~fficienUy I can offer you a OrlefOi1llie overalltJCTP at some stage if yJ OUra-liKifrOiilCommanaerroffiITogist

Senator IAN MACDONALD I would Naturally as a Townsville based senator you would understand that I have a particular interest in the operation ofthe base there its efficiency and also the contractors who--I have to tell you-for whoevers reason are suffering as a result of the cancellation in these difficult economic times

Air Marshal Binskin I understand that It is not cancelled it is a deferral there I know that it sounds like words The highest priority is our major facility at Moorebank which is our major distribution facility You could not in the work flow do one of the smaller ones first with the expense of that It is the way it all flows out but if we can provide you omine just a short brief on DL TP you can see the interrelationship there

Senator IAN MACDONALD I seem to recall the parliamentary secretary also had a very glowing media release about upgrades in this program at Enoggera Whilst I am delighted for Enoggera-which is also part of my electorate as a Queensland senator-I again wonder why Enoggera was more important than Lavarack-

Gen Hurley I think we need to correct your perceptions about importance of brigades We have moved away fundamentally from 3rd Brigade being the spearhead of the Army to all the brigades moving into rotation to provide the ready force The ready battalion at the present time is actually from 1st Brigade in Darwin The world has moved on in that sense We need to make sure that those three bases-Enoggera Darwin and Townsville--are appropriately and efficiently supported to generate force when required

Senator IAN MACDONALD I accept and understand that I was aware of that and am looking forward to the LHDs dropping into Townsville and picking up the marine force when it is needed somewhere

Gen Hurley You have at the table a former commanding officer from Townsville a former brigade commander from Townsville and a former brigade commander from Darwin We get the sense of the competition

Senator IAN MACDONALD Yes Air Marshal did you finish

Air Marshal Binskin The other factor that was in play here was an efficiency in infrastructure works at the various bases Some of the other bases already had infrastructure works in place and to defer there would have lost some efficiencies bas~d around that as well They were not decisions made lightly but they were the correct decisions based on the whole of the information available

Mr Owens I would just like to confirm that there are no actual works packages under the DL TP for Enoggera there are at Amberley but not at Enoggera That is not part of the DLTP

Senator IAN MACDONALD I will find my media release and I apologise in advance if I have got it wrong but there is something that Senator Feeney said about Enoggera and a lot of money being spent-which I am delighted about being a Queenslander

Senator JOHNSTON Lieutenant General Morrison with respect to LAND 17-the cancelled project-you said last year that as a result of the requirement to find money to enable the government to bring the budget back into surplus It was done recognising that

That is the cancellation of the self-propelled howitzers in LAND 17 You may be aware that last Thursday Senator Bob Carr representing the Minister for Defence said

In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the anned forces Was it supposed to do a different thing Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence-shy

Can you confirm that the advice that went to government in the cancellation of this project was about finding savings

Lt Gen Morrison It was about as I said last year contributing as Defence was asked to to a government decision to bring the budget back into surplus at that time

Senator JOHNSTON Thank you

FOREIGN AFFAIRS DEFENCE AND TRADE LEGIS LA TION COMMITTEE

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FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

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nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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J

FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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AlllcbmrIu It ~ TlMlampblo ~ IUIJIIIIIIiIc key rmilltDDriS ii ~bDpIlIDCIIIUlion~ortbe~

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lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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bull

r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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tRercrcnce ~CDFJQUTnOIIlao1

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ii ~() be briercd on the DI~TP

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

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- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 21: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

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FOI3371213 Item 1 Serial 23

Ii I C f C f I r- ~ I= r ~ I- E C f r t-l _ f r Ref

Defence logistics Transformation Program (DLTP)

Senator Macdonald Briefing ThursdaY21 st March 2013

Rear Admiral Clint Thomas AM CSC RAN Commander Joint Logistics (CJLOG)

Mr David McGahey CSC MPD Project Director DL TP

f J ~ k r - r r -t r ~ - p r

Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

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e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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J

FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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AlllcbmrIu It ~ TlMlampblo ~ IUIJIIIIIIiIc key rmilltDDriS ii ~bDpIlIDCIIIUlion~ortbe~

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lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

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bull

r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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tRercrcnce ~CDFJQUTnOIIlao1

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ii ~() be briercd on the DI~TP

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 22: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

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Opening Infrastructure Update

Procurement Update Transition Update

Workforce Update Conclusion and Questions

PM~I~~~~-~~~I

Contents

(CJLOG) (PO OLTP)

(PO OLTP) (PO OLTP)

(CJLOG)

(CJLOG)

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

-r

-CJ--=~ middot~O u-_

I~~ H~PtA) _

y I K II (It-~ 1Iin-~ iii r-ot ~

-- t_

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Lk eI~Ross Island Tow~sville

-___ t-

- -~ -=

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---------------------- bullbull f ~- 1 - ~ O I Iatlon of lttq ShoalwaterBay Ij - Ij I cent

~ - ~

e In _ __ _~ _ ~ n-

responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

t

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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J

FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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ii ~() be briercd on the DI~TP

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

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CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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Page 23: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

oi ~____---------~~

~ ---~-

- ----~ ~--DEFENCE LOGISTICS TRANSFORMATION PROGRAM

Infrastructure investment Key project stats A unique opportunity to both enhance capability

$7527 million in capital and reduced costs investment Joint Logistics Unit (North)

Robertson Barracks NTbull Eight sites Australia-wide

rbull Four year construction h gt Joint Logistics Unit

program ~North Queensland)(~ Lavarack Barracks QLD

bull Employment

opportunities for 6100 Joint Logistics Unit (South Queensland) people (direct amp indirect) at RAAF Base Amberley

peak of construction

bull gt100000m2 of new Joint Logistics

warehousing Unit (East) Moorebank NSW

bull gt20000m2 of new Joint Logistics Unit (West) Joint Logisticsworkshops Joint LogisticsHMAS Stirling and Palmer Unit (South) Barracks WA Unit (Victoria) RAAF Basebull gt220000m2 of new Wadsworth Barracks Edinburgh SA

East Bandrana VIC hardstand 4

Defence Logistics Reform Logistics to train fight and win

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

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responsibility Rockhampton ~~ - ~~_ __

0 ~ - 7~ 1 - - ( _-b J ~ ~~ -- ( ~~ -- r~~ ~or~3~==

I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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s47C

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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tRercrcnce ~CDFJQUTnOIIlao1

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ii ~() be briercd on the DI~TP

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

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- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

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For clearance FOT Information NoAciion

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Page 24: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

~istics Unit (North Queensland) amp Joint Logistics Unit outh Queensland) Current Unit disposition

bull Jomt LogIStics Unit --shy ~lt (North Queensland) locations c ~- --~tr ~ o Key dependency

w --~r + locations(Q Town-11_~V_ - tibo4 0_-_ 0

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responsibility Rockhampton ~~ - ~~_ __

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I GallipoliBarracks - _ - 0lt-gt _ ~

Oakey ~Mee~ndah ~ bullbullbull _Buhmba ___ ~---RAAF Base Amberley I Brisbane h--- -----

____ 0 Joint logistics Unit bull Key dependency _________~r ~Wallangarra- -

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

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r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 25: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

nt Logistics Unit (South Queensland) Capital investment

Key Works Package stats

bull $1457m of capital investment in new facilities at RAAF Base Amberley

bull 1210 personnel employed (directly and indirectly)

bull Will contribute around $93 million (pa) to the Gross Regional Product

the Ipswich region at the peak of construction

bull Managing Contractor - Leighton Contractors LM 4 z

bull Construction start Apr 13

bull Construction complete Feb 15

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

ackage stats

ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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CoIIIultdloa

16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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J

FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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COMMERClAL-INcoNFIDENCE

AlllcbmrIu It ~ TlMlampblo ~ IUIJIIIIIIiIc key rmilltDDriS ii ~bDpIlIDCIIIUlion~ortbe~

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lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

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bull

r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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tRercrcnce ~CDFJQUTnOIIlao1

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i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 26: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

investment at lavarack

Barracks

bull 1220 personnel employed

(directly and indirectly)

bull Will contribute around $94

million (pa) to the Gross

Regional Product in the

Townsville region at the peak

of construction

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ogistics Unit (North Queensland) Capital investment

bull Managing Contractor-n ~1Mm[ L_Jlfd=11ta7i~ I ~ r-= middot--~Baulderstone QlD Pty ltd ~_ I l _ I ___ ~ _ --1_ - ltr--~~ ~ bull i L __ ____

bull Construction (early

infrastructure enabling

works) Mar 13 to Jul 14

bull Main construction works

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

1IIlI t1INIM ~ACT 21IlOO Tilt 1IIZ16l7nlOO Fbull02)WUlIa COMMERlCuINcONflDENCE

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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tRercrcnce ~CDFJQUTnOIIlao1

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ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 27: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

Land Materiel Maintenance RFT Key Differentiators from current contracts

Contractual Flexibility o Improved contracting arrangements and payment mechanism to cater for fluctuations in

demand (increases and decreases)

Planning and Management o Defence will lead (and resource) the planning and management of LMM o Centralised planning will incorporate strategic level planning between JLC and DMO o Greater emphasis on balancing workload across the network

Contractor Roles

o Contracted LMM service provider will deliver appropriately skilled and experience technical workforce to support the delivery of LMM services

o Defence may contract additional resources to support planning and management o Additional contractor technical skills may be required (such as engineering support)

Performance Measures o Performance measures applied to both contractor and Defence (JLU) outcomes o Metrics and KPls used to measure performance

9

~prJfiri1ragi$ti~~Rtijorlr Logistics to train fight and win 0

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

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RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

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Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

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Logistics Services

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~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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8 11N~work 10 nnsIliGD to1ht new ~d ialfgnifialnlezd 0IIr ~ il dld 11kIdClfOM fer ddt ~lJ [I OptIDIIIl ~WUI k _1mpIiIaIf0Rl4llllld~ With 1liiY ddl in the implcmcoCllioi ofQIi npIAcancm CIIiIIRd Wampwtl1aftccilDftncomiddot capaCity to pmate dlC rcqulreduvma ttnush memo oflhe IatlltiCl~

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

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B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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COMMERClAL-INcoNFIDENCE

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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COMME1lICAL-IN-CONFlDEHCE

II

1

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

I I

L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

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ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 28: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

Key Differentiators from current contracts

Statement of Work o Structured on service delivery phases storage issuing and distribution o Greater emphasis on outcomes rather than prescriptive service requirements o Reduction of Contract Work Breakdown Definitions (CWBD) o Outcomes based approach to contractor performance within the warehouse o Regional COs will have greater control and accountability for service delivery performance

Technology o WMS will drive process improvement and efficiency within the network o Defence will implement volumetrics and leverage the WMS to optimise and rationalise

warehouse storage

Performance o Metrics and KPls will govern performance management o Support clear division of responsibility between Defence and contractors

Defence Logistics Reform Logistics to train fight and win

10

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

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RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

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Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

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Migration I I I I

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Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

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~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

--==---~ ~ ~--

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2

Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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bullbull

FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

L I

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

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r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

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i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 29: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

Re-Tenderr Project Summary 1~~~jft~~t~~~~lVjt1 ttO1Pt ~~~)blt~~~~~~tlti~1

M JiJ AS 0 NO J FIMA M J J AS

I I

RFT Preparation I I I

Tender Response Period

Tender Evaiuation IWampD

c o en c CO l-

I-

Negotiation Contract Signing

Contract Execution

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

~~~~Ggt(fltJJj~ilJjl111ff1i1lcentJi

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

1IIlI t1INIM ~ACT 21IlOO Tilt 1IIZ16l7nlOO Fbull02)WUlIa COMMERlCuINcONflDENCE

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

I I

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

l i 1 I I I I t i

s47C

s47C

bullbull

FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMfERICAIN-CONPIDENtt

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

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ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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UNCLASS~FrEb

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

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(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 30: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

_--_-r-~-~

~----------- -~-

Re-Tender Status

bull LMM Tenderers have been notified of the outcome Negotiations for the LMM preferred tenderer commenced 04 Feb 13

bull Defence has entered into an early services agreement with Transfield Services (Australia) to enable initial transition activities to commence during the contract negotiation period

bull If Defence cannot reach a contractual arrangement with T ransfield Services Defence reserves the right to suspend or terminate negotiations with the preferred tenderer and revert to one or more of the other competing tenderers

bull WampD tenders processes is continuing The outcome of the WampD tender process remains Commercial-in-Confidence

12

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Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

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I I I I I IStock I I

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Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

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ii ~() be briercd on the DI~TP

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l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

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NGIid I Pleas Dlua ~

bull KfulCarr

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Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

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(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 31: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

c --o ~-CJ) c CO s I-

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

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bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

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Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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COMMERClAL-INcoNFIDENCE

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lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

OOYcnlrDaiIconlldrnXI die DIDSl render EvtluIdcm ~ TcabnolllllbleqoenUy JIlQCIimrec1 ~ofcllcr

IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

1IIlI t1INIM ~ACT 21IlOO Tilt 1IIZ16l7nlOO Fbull02)WUlIa COMMERlCuINcONflDENCE

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

I I I

COMMERlCA(INaJHPJDENCE

s47C

s47C

-- -Ii

I

FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

--~-

~ bullbull - = --_-

r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

~~

NGIid I Pleas Dlua ~

bull KfulCarr

_ i I I

Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

ii

r q -

FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 32: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

Network Transition Timelines 2013 2014 2015

AM J J AS 0 N olJ F M A M JJ A SON 0 J F

I -- --- ----r---shy

bull Facilities I I I __________ L _____________ _____________ _____________L ___ _~ ~

I I I I I IStock I I

Migration I I I I

~---- ----~--r----- -------4-------- ----shym I I J g IleT I

I I r

I I I I CD

----------- --~-------------+------------- ~----

Logistics Services

I I I I I I I I I I I I I I I I I I ----------r---------- --l--- ------ -- T--

~qtryi1fi~i~~ middot~tltsr4Xi~P~~jt0gtlt lt7 gt oDefenceLogistics Reform Logistics to train fight and win

14

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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J

FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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COMMERClAL-INcoNFIDENCE

AlllcbmrIu It ~ TlMlampblo ~ IUIJIIIIIIiIc key rmilltDDriS ii ~bDpIlIDCIIIUlion~ortbe~

DIDSamtnd

lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

OOYcnlrDaiIconlldrnXI die DIDSl render EvtluIdcm ~ TcabnolllllbleqoenUy JIlQCIimrec1 ~ofcllcr

IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

24~29i8 IJAE parch_ TaII- _ ~bcr2J1q9 D~ Rcmedillioncoct Ii_widBAB

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r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

1IIlI t1INIM ~ACT 21IlOO Tilt 1IIZ16l7nlOO Fbull02)WUlIa COMMERlCuINcONflDENCE

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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F=-~-----~-- bullbull JiO---____ -w--r-_-___~~~~~---FOl3371213 Item 1 Serial 36

COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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s47C

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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s47C

s47C

FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

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L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

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I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

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i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 33: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

FOl3371213 Item 1 Serial 31

COMMEJlCIAL~TNcONFIDBNCE SmithlMAl3middot70010S

bull RofCnIaee llC(S)1011r1201311

Date Dept Approved

For ACtiO MiDfer for Defente

Tbraul~ vpP~J Capln to Sccnwy CDF FASMECC

PriQricy

Profest

Purpose To advise you that the Tender Evaluation Report for Defences Land Materiel Maintenaoce Services contract was si ed b the dele ate on 17 Janu 2013

Key Points

L

2 Both tenders closed 12 noon on Monday 24 Sgtmnber 2012j

a) Warebousing ahd Distribution Services Tender In accordance with the schedule the evaluation ofthese submissions is continuing The Tender Evaluation report is due to the delegate in late February 2013 A further update in relation to 1his tender will be provided toward midllate March 2013

b) band Materiel Maintenance SeMses TCJlder At the completion ofan extensive evaluation the Tender Evaluation Report was signed by Ihe delegate (Commander Joint

Logistics Rear Admiral Clint Thomas) on 17 January 2013

J Defence received total ofsix Land Materiel Maintenance Services tender ~es Submissions were received from ft7G -~ -

EifG (iransfieJd Services (Awtralia) Pty Ltd ~7G -f7G J-

On advising the preferred tcmieret Defence will fonnally adviself7G that another tenderer has been indentified as the preferred tenderer and that Defence may proceed with negotiations with~fG Ion their Qffer in the event that a satisfactory contractual arrangement cannot be achieved thro~gb negotiations with ~c pnfcrred tenderer

Page 100

COMMERCIAL-IN-CONFIDENCE

-I

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

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4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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ii ~() be briercd on the DI~TP

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

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- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 34: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

COMMERCIAL-IN-CONFIDENCE SmithlMAt70010S

Reforacc JLC(S)lOtrrI2013l1

6 The remaining four unsucccssful tenderers will be formally notified after the Contract Award date anticipated to occur midllate March 2013 The correspondence from Defence will offer each ofthc unsuccessful tenderers an opportunity to receive a comprehensive de-brief from Defence

7 Key consideralions relating to this maUer are

a) Confidentiality The confidentiality ofthe six Land Materiel Maintenance Services tendering entities and the status ofthe tender evaluation outcome need to be tightly maintained until the negotiations arc concluded and a contract awarded

b) Risk With the exCeption ofthe Hunter Valley MilitaIy Area contract BAE Systems currentl)pI()vides the majority ofDefenocs Warchousing distribution Id maintenance servicesE7G = = Jmthc event that details ofthe ~fened tenderer are inadvertentIl disclosed mor to ContJad A---1Ia7D ~f7~

8 Media Release A Defence media release announcing Contract Award to the preferred tenderer for Land Materiel Maintenance Services contract wil1 be released post contract signature

Reeommeudattons

ihatyou i Note that tho delegate has sianedlapproved the Tender Evaluation Report and Defence intends to

invite the preferred tenderer (Traosfield Services (Australia) Pty Ltd) to enter into negotiations in ~ebIUary 2013

~P1~SCUSS ii Note tiultj47G------has been assessed as the second preferred tenderer and win be

formally notified that another tenderer has been identifiod as the preferred tenderer and that Defence may pIOltCled with negotiations on their offer in the event that a satisfactory contractual ~cnt cannot be achieved with the preferred tenderer

~PI~CWlS

iij ~IPS I iv Note that unsuccessful tenderers will be fonnally notified only after the Contract Award date

~pated to be midllate March 2013)

~~iSCUSS

Page 2 of3

COMMERClAtIN-CONFlDENCE

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

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B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

0--------------------- _ bull

COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

1 t I

I

COMME1lICAL-IN-CONFlDEHCE

II

1

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

I I

L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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2

Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

l i 1 I I I I t i

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bullbull

FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

L I

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

s47C

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 35: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

COMMERCIAL-IN-CONFIDENCE SmithMAI3middot700JDS

Refererue JLC(S)lOllTI2013l1

v Note that a Defence media release announcing the successfu1 tenderer will be issued upon e_ct Award

CWTHOMAS Rear Admiral Commander Joint Logistics

sJanuary 201~ Contact Officer Mr David McGahey Phone (03) 9282 7039 _1-___

Primary Addressee

Resources

9 NA

COlISulttion 10 NA

Coaflkt of latenst

J1 NA

AttaeialDellt

A Smithl20121MA 12-002778 dated 21 June 2012 - MINSUB on Re-Tender ofthe Defence Integrated Distribution System Contrael

Page 3 00

COMMERClAL-INcONFIDENCE

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

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8 11N~work 10 nnsIliGD to1ht new ~d ialfgnifialnlezd 0IIr ~ il dld 11kIdClfOM fer ddt ~lJ [I OptIDIIIl ~WUI k _1mpIiIaIf0Rl4llllld~ With 1liiY ddl in the implcmcoCllioi ofQIi npIAcancm CIIiIIRd Wampwtl1aftccilDftncomiddot capaCity to pmate dlC rcqulreduvma ttnush memo oflhe IatlltiCl~

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

1IIlI t1INIM ~ACT 21IlOO Tilt 1IIZ16l7nlOO Fbull02)WUlIa COMMERlCuINcONflDENCE

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMfERICAIN-CONPIDENtt

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

--~-

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r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

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NGIid I Pleas Dlua ~

bull KfulCarr

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Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 36: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

~____________________________ ~~NW~--~~-------

11

II

COMMERCfALIN-CONFlDENCE

I

FOl3371213 Item 1 Serial 32

Smi1hl20l21MA12002778

RcfcnIet CLOGour120121536

AllltnJIaD CCMJDmtlJt

Dfplrlmed or Ikrf8lle ~______~~~~____~~__~~~~~____~ I 11

1~~_RO_U_tiQ_e______~ Date Dept Approved 21JUN i011 -9 JUl ZD12

For Aelton MiDister for Defence Coplet 10 SecreI8Iy CDF FASMECC VCDP CEO DMO CFO OOS(~U

Subed Re-Tender of ibe Defenee llat

Purpose The purpose of this submission is to advise yQu the Request for Teilder documents 10 re tender the ))efence Integrated Igtismbution System (DIDS) will be released to Industry on 29 June 2012 bull

Key Points I 1 Attachment A advised of the proposed approach for re-tendging the oms contract ltthe J)reumt

contract CXRires on 30 June 20)3) It was outlined that two open competitive tender proccsses one for warehous~g and ~s~bulioD servce~ and on~ for maintenance services would commence in April ~Ot with tbeooncurrent release of the two Requests for Tender (RFf)

2 1n a further submission in FebruaI 201 ~ (attachment B) you were subsequently advised ofa three month dehl) to allow for additiorud legal scnJliny with the release ofboth RFf being rescheduled to the end of-June 2012

3 The Defence Support Group (DSq) - Non Equipment ChiefProcunmtent Officer conducted Ii Procurement Assurance ReView WAR) The PAR Framework was designed to minimise procurement risks increase ovei1tD compliance willl procurement requirements increase adJierence with obligations and improve procurement outcomes The review found that the Stakeholder Procurement Team i1 well positioned to address tlrejintiingJ railled In Gate 2 publish open approach 10 market 1ottflcatlo~ on Aus Tender anti prepareJor tire challenges during Ihe tender open period ttmpef evaluation contracI negotiations and contract managementn

4 The preparation ofboth suites ofRFf docwnents is now complete and they are ready for nlease Each requires Il contmcl t~ ofOl July 2013 to 30 June 2019 with five one-ycat extension options

Industry CODsiderations I S During the RFT preparation process industry briefings were conducted in November 2011 and

February 2012 Industry engagement has indicated en inten8t from a wide field ofpotential service providers in both tender processes bull

Media Release

6 A draft media release announcing the release by Defence to market oftwo RFTs for the provision of logistics services hasbeen ptq)ared ands at attachment C

Page 1 of3p COMMERClAL-INcONFlDENCE

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

Page 2 of3

COMMERC~JN-C()Nyenl~ENCE

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~ Clpca I va ~ 1IIOtIIY COIW WI 0 IDd diltriblltiDft dCllKlDtl I IIImdIed oOiriq ai rlJIOftile tfnaalta that aiat bdWco1 Ihao fImctionI TbiIIrInj~1O teOcdI industry hCUcr practiCe l1li1 is minOtcd 1ft

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5 lIdMfAIDlMII__(LMMgttttivd~=llIeIYces wm alta COlIIINIIOC in tWY ZQ 2 iii CQ It iUropoed thatlCiiiiR1ttl mil he mgclllbullW ja Jmu 2Q13 TlUi ~ hu bcea sutded by he lbaolUlccqulrcmCllt for busJDcu contfrnrif) iDdQdina UppDII to ClpcntiOftJ

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7 110 ~ofDZDSIs coniidmed to be 1cGfCid proaJtalUnt~ IS de6ited in tile ~talthJlrocuremmtGuidelines _the DifenQCI ~1111 Policy Menuat aad wid be lUJlject 10 tie ~Inl~ldI~ pollci- 1belUlllnoflhl roo [cnclcriICCDllillCen1witJnmaU)EprulIlt~IIdivitieswkh~ reilled ~kInIcouId_ to lie pat ofroutine busiaaL A~Yi 11K C01JlftUllCler loioi Loabdca U bci die iwtovll ~oi~1) fur ~laIdcrprocal Jind ~ ~with die ~lCd 1aldcra(1)

8 11N~work 10 nnsIliGD to1ht new ~d ialfgnifialnlezd 0IIr ~ il dld 11kIdClfOM fer ddt ~lJ [I OptIDIIIl ~WUI k _1mpIiIaIf0Rl4llllld~ With 1liiY ddl in the implcmcoCllioi ofQIi npIAcancm CIIiIIRd Wampwtl1aftccilDftncomiddot capaCity to pmate dlC rcqulreduvma ttnush memo oflhe IatlltiCl~

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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J

FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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COMMERClAL-INcoNFIDENCE

AlllcbmrIu It ~ TlMlampblo ~ IUIJIIIIIIiIc key rmilltDDriS ii ~bDpIlIDCIIIUlion~ortbe~

DIDSamtnd

lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

OOYcnlrDaiIconlldrnXI die DIDSl render EvtluIdcm ~ TcabnolllllbleqoenUy JIlQCIimrec1 ~ofcllcr

IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

24~29i8 IJAE parch_ TaII- _ ~bcr2J1q9 D~ Rcmedillioncoct Ii_widBAB

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r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

1IIlI t1INIM ~ACT 21IlOO Tilt 1IIZ16l7nlOO Fbull02)WUlIa COMMERlCuINcONflDENCE

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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F=-~-----~-- bullbull JiO---____ -w--r-_-___~~~~~---FOl3371213 Item 1 Serial 36

COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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s47C

s47C

FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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COMME1lICAL-IN-CONFlDEHCE

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s47C

s47C

FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

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L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

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I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

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Name ~ppoiDtme~t DTG

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COLA Maclean

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Page 37: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

--

~MMERClAL-INCONFlDENCE Smithl2012IMA12-OO2778

Reteseme CJLOGIOlJf12012JS36

RKommendatioDS I That you

-i Note that Defence is to release two discrete RFf documents for the provision ofwarehousing distribution and maintenance serviCes to market on the 291une 2012

~PI~USS

ii Agree to the media release ~ouncing the release by Defence to market oftwo RFfs

~IN~ ~~-f~~~ I Approved By d - middot Uoli M M STAIB

Air Vice-Marshal Commander Joint Logistics LI June2012

JABtJ Contaet Officer Mr David McGahey

II Phone (03) 9282 7039~71 I

PrImary Addressee I (~

I Stephen Smith u 1~IIJ-z

-

Conflict of Interest

7 The Minister for Defence and the Minista- for Defence Materiel have declared a potential collfijct of interest in relation to their portfolio responsibilities Con~ls have been established by Defence and the Defence Materiel Organisation to minimise the risk of any conflict actually arising in relation to lhose responsibilities Taking into account the Ministers declarations at this time we assess that no conflict ofinterest for the MiniSter arises in relation to Unisys (for Minister Smith) or could reasonably be perceived to arise from the mattes dised in this submission However we assess that there could reasonably-be perceived to be a conflict ~fin~t for ~sterClare in relation to lulzar Pty Ltd trading as MPM Marketing Services Sode~o AwmaJia Ply ~td or ~erco Sodexo Defence Services Ply Ltd and as a result he has lot been included as en addressee on this submission ~uld any matter which could 98use actual or perceived conflict ofioterest arise any future submissions and contact will be through the nominated Minister as identified in the controlsshy

Attachments

A Smith2011 039752 dated 1] August 2011 - MINSUB on Retender ofthe Defence Integrated Distribution System Contract

B Smithl20121MA12()()()613 dated 2 M~h 20t 2 - MlNSUB on Defence Logistics Transfonnation Program (DLTP) UPdate on scrvi~ Re-Tender -shy

C DRAFT Ministerial Media ReI~ - Defence Logistics Support - Requests for Tender I

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

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v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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17 m ZOtl

CiRfalNAL HAND DEUVERED

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L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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ii ~() be briercd on the DI~TP

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

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Name ~ppoiDtme~t DTG

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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COMMERClAL-INcoNFIDENCE

AlllcbmrIu It ~ TlMlampblo ~ IUIJIIIIIIiIc key rmilltDDriS ii ~bDpIlIDCIIIUlion~ortbe~

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lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

OOYcnlrDaiIconlldrnXI die DIDSl render EvtluIdcm ~ TcabnolllllbleqoenUy JIlQCIimrec1 ~ofcllcr

IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

1IIlI t1INIM ~ACT 21IlOO Tilt 1IIZ16l7nlOO Fbull02)WUlIa COMMERlCuINcONflDENCE

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

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I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

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Name ~ppoiDtme~t DTG

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MrD McGahey

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COMMEtClAkIN-CONFfDENC6

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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tRercrcnce ~CDFJQUTnOIIlao1

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ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

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- - Clured by fDintctor Public Affllln) ClUNdby

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
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Page 40: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

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Cm1ftERaAL-INcoNfIDENCE

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14 ltliveD the divGJlNl nave mIN IIoCtivitilad~ ill the OLD Jm6cmd COIIIal1IIioII bat ~widt ~1II1ftIm lhD Dcputmcrat fdle Pfme Miaiaext Cabind adDle DCpIrtmem ofPiDaaCe~~1JII1n riUJloD ~t1ic~ pocras fortbo~ oUbe om CcntJact 1bcIc ofIiciaJuqttic nkzlllri DfthcOIDS ConIrtd in JalllIinmInt grilYiilOIO fbadecI6arD exillig iiiJ i1nIid~jiijjjiCid ~ ICIQancs

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COMMERCIAVINooNFIDHNCE SIIIHUOII

SE(IOOJ201l CIlfIOU1l2OII HI

CoIIIultdloa

16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

CoIrQId of blMmt

J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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AlllcbmrIu It ~ TlMlampblo ~ IUIJIIIIIIiIc key rmilltDDriS ii ~bDpIlIDCIIIUlion~ortbe~

DIDSamtnd

lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

OOYcnlrDaiIconlldrnXI die DIDSl render EvtluIdcm ~ TcabnolllllbleqoenUy JIlQCIimrec1 ~ofcllcr

IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

24~29i8 IJAE parch_ TaII- _ ~bcr2J1q9 D~ Rcmedillioncoct Ii_widBAB

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r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

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DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

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CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

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D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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ii ~() be briercd on the DI~TP

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

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CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

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For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
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Page 41: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

COMMERCIAVINooNFIDHNCE SIIIHUOII

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16 aknlaI Celblailld Mr0rIham Evci11e Actiua FintAssiIlMt SccntaryDefaue ~telliaencea Raeanh CoordinaU01I Dmlion of tlull Dcpanmau of be Prime Miniller aod CabinBI Dr LesIey Seeheck AtlistuIJ Sccrct8ry DefCillOllo IotIItipce IDd SCQIrity BIIOCh ordH Dopartmcnl ofFillllneo aDd Dereplllioo

17lBttntal8bb11ohkn eantcr4 Mr Simoo Lewis Deputy SetroWyDdcuce ServIce Mr Mike Gibson Fint AlIIiIbmt SaenstGy Raouno and ASIurIDco MAJ01N 0rIqt Cawmlah Head Land sumsDWl_ Defence MurieJ 0rpaiatiDu MI Liz w Noq equipment OIjefP~Officer Mr Dlrrid E1Ion DinIcfor General Corporate Mantpracnt VCDF Oroup

11 There veRU10 tonflicIiDa views

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J9 The MiDIItcr for Doftnoe aftd be MhdItcr lor Dc(eace Matedel bMre dedanld bull poteutlII coaflict offDtcral in nIatIoa to dldrJ)Qlt1bHo fCilPOlliblUtfa ltoaIrob have been alablillhe4 b) Dcfcnca II1II die Defcmaa MIkrid Orpuiudon IU mi1limfso dsk of my confUet IdUally dna bI rdllion to thole lCIJIORIibUltiea TtIdq Into account me MllliItas decrarIIicnIlt thiI timo we __ that Do confIict oflfttaed ilr the MiDiItcr aria iftTclaUoft 10 UnlI (lOr MlnlltCr Smith) or ICCIUkl RIampIORIbJybcpcrocivod tot1C from theIIIIltcra nisccJ in drillUbmJlIion HowOYCr we IIICIIIM dincould nuonably be perceived to be ccmfUd oflDlerat for Miniltlaquo Chn In relidOl1 to JuIzIr Pl) LId trId1l11 as MPM MarbliDaScMCCI Soduo AustnW Pty LId or Sefto SocIao Defence Sorvicu Ply lJd ami as lCIIIIIlt he hal IIDt bccrJ included as 1Id4rcuaon dda auIuniIQoa SbouId 111) ItIda which could CIIIIIC ICIUaI or pcIIlIItval wrdIid oIinkn1t IriIB 11) fbbR ~lloDlIftd ccmtItt will fuouab the ftOminated ~u idantffied in ~~I

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FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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COMMERClAL-INcoNFIDENCE

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lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

OOYcnlrDaiIconlldrnXI die DIDSl render EvtluIdcm ~ TcabnolllllbleqoenUy JIlQCIimrec1 ~ofcllcr

IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

1IIlI t1INIM ~ACT 21IlOO Tilt 1IIZ16l7nlOO Fbull02)WUlIa COMMERlCuINcONflDENCE

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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ii ~() be briercd on the DI~TP

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

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AvMM SIai

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- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 42: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

FOl3371213 Item 1 Serial 34 -

COMMERClAL-fNCONFIDeNCE f

BACKGROUND - TIfE DEFBNCE INTEGRATED DISTRIBUTION SYSTEM CONTRACT

I In ISI91 the finll report ofthe Government Dcfcnce BftidcncJ RaviCIW taommcndcxl tbat Deftrlec In conNl~on icll indumy ouboune its wuehoutins distribution IIII4Iampnd maintcllallCC activitles The report 1110 rccomrncad04 t1iIt Defence wiOl Ihe aaiatanca IIf industrY dcvdop ImDrC cfliciml wuehovsina and distribution )Item 10 Iccommodatoits aperatloMJ nqoirIlmcntL

2 AI PId oflile tender process Defcmco tdvilccl dall dIey wished III deal witb bull lingle prima contraCUgtr to pnviio 1 aftbc8e 1ICIVi0tlll WhIle il WU DlViIII(pI1hat Ole CODIrattar cauld utililC thD lImIilZl ofaub-conrractmllo provilfc lomO ofdletc ICIYica ifIIC1QCS111rf ampbe prime 1 contru1Or was ~uirtd to take fWl CODntu1ll mspcmsibllJty far thci pcrf0nnuilC

3 The Oetimu fntctp1lled Dimll1tjoa S)Itrm (OIDS) conIrIct IAlfd Tenia ITail Dctimce IABfItiCl OODI1Ocnced 011 26 NovcrrtIgter 2004 willi In eqriry cW of26 Nocmber lOll The CObblCt htl bc= lUbNqucndy ImCllded 1M DOWaPlne on 30 Juno 2013 lIIicb 4 tfnaI~ YctIr 1 tllterllon Optiollll OIIt III 2m1 f

4 The Dms Con~ COCft national distribution cpmtion ofwbclculc wazd)ousiD8 ItId mai~ orland equipment 11wGe scm delivered roN ~ thai conli_ 0 24 wardlousin flldlitlu DId ICYeA major ClQuipmCftl repair ItId iMfntalnco ~ JltalqicaJ1YIocated IIVIUId AustnIiL

5 In 200s BAE S)SICIDamp A~ia ICqIIfro1 Tena I Toll Dcfcacc lAalllica tad wilh etfcct 24 IlIumber 2008 CCIfIIIMnord openliolls u benew conlndOr

6 Following Govunmcnl dirccrion Derma cmcrod into medillhm with BAE SysteIts Allhlil 10 addleU bull rule ofIIJImIOlvcd ClOnlDetIIJ iauu itt 0Idet to et111IC Ole contract rofIcctt tbe t IICCIdJ ofboth pIIti_OIZdllUUllslSUSllinlbla and 1able ClOntnct ootil npiralioD

1 All part ofthis iftoiladon bull Doed ofDbJribution wulipcd that ampirt dfcct to bull revbed tnipt diitribution IIIOdcI that IIIlidPltCd a lIMns to the CGmmonweallb of~31imatdy S31O pel mum Ibis ~tWilli a pro-ClDndillon 10 Iho C4II1UnOtlWea1lhlllIlnCUl1llDCO to tho silo of Tenix Toll DcFmce lAldJlcs

B 11111 medUtion cDnmaucd en 12 JUlIe lOOI1Jld the iJltaim Deled ofSet1lemcnt elated 18 August 2008 JCUlcd bull nnac of~livo claiml for tho DID contrad

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COMMERClAL-INcoNFIDENCE

AlllcbmrIu It ~ TlMlampblo ~ IUIJIIIIIIiIc key rmilltDDriS ii ~bDpIlIDCIIIUlion~ortbe~

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lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

OOYcnlrDaiIconlldrnXI die DIDSl render EvtluIdcm ~ TcabnolllllbleqoenUy JIlQCIimrec1 ~ofcllcr

IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

29JUly2OlP Tlmlroll iDua~ u PrctCmcTaampIcr 18~20Q3 DIDS2 ConInct liped

24~29i8 IJAE parch_ TaII- _ ~bcr2J1q9 D~ Rcmedillioncoct Ii_widBAB

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r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

1IIlI t1INIM ~ACT 21IlOO Tilt 1IIZ16l7nlOO Fbull02)WUlIa COMMERlCuINcONflDENCE

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

I I

L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

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I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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tRercrcnce ~CDFJQUTnOIIlao1

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ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

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(ASCAMor deleRllte) middotjohn And~n_

DCAM

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
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Page 43: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

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lONrwembcrlJ99 ~ms ltcqlCll for TCndIr ~eacd 14 MayZOOI OOwmment IIgIIlCId in1iIndpl to termllIIte ampbe DIDS lMd~ JIIOecI 2~ber2001 Ocwnmcm taJIIId 10 ID cqukilioD StntIieY for DIDI 2-15 April 2001 DIDS2 RfT RlCiUZd 14 October100l

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IFctNuy 200J 00va1umnt CXIJIiideq tile ~oraaptlidou with T~I l1lhIoqilllltJy IIMOUDCCS amphat paraU~ aCaDti~ will be altcnd into betweeD Dcfcncc md T~ IIId ADImiddotFOI

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COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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s47C

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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COMME1lICAL-IN-CONFlDEHCE

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

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tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

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I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

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Name ~ppoiDtme~t DTG

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

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FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 44: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

r-=~~~~-~~~~-~--=----------~-~------~~~- rOI 33712113 Item 1 Serial 35

COMMERlCAL-JNCONnDJNCE

bullStephen Smith MP Minister for Defenee

The HOD Julia Gillard MP Prime Minister Parliament HOIISC CANBERRA ACT middot2600

17 AOO ZOU

ORIGINAL HAND DEUVERED

Dear Prime MinfSb1

roc - J ~47~ _ __ __ _ _ -SIhC Propam CODSIm ofibJft core ~ties whlCii include Ihc ndeVIlopment mUle Department o(Dcfence wtxllcsale loaisria ampeill1ies Iho implcmentalioa ofenbarad IOlilticl infonDllion syaterns and IUIomsted KblifiCamplion uchnologics and tho reendcr of1he Defence JDtepaled Distribution SyatCIII (DIDS) cOnInIct

The CWlCDI DIDS conlract provides Defence with lItIionaJ dislribution services rile operation ofwholaale wudJo1ampSinS ADd the mainttnance of lind equiJimeat It apires on 30 JIJJIe 201 J The OlDS contracI npmentl a lisniflcanl ~Iantnt 10 Alf1talilll industry with bull lOCal biJdSC1 for Che replacemeDl toIltrad in 201314~ (rillld a lotlll IUI over the proposed cotItr8ct rcnn Rom 2013-1410 2017DII 1igt47DJ

Defence is currentiyprqtarina to CODducI tadet process for repiaamenl contracts IS perl of the impJemenlation of Ihe ICYIscd loalNt buainess model fWIIfins for the currenl and fUturI DIDS coolracU is included ill Defencc badinc budJd allocalion 1be JeokDdcr Is an iImpolWlt clemeN ill lbe LoatiJtica Strum of die StrllCgie Reform Proanan and will conlriblM 10 tho Stnan1S savings IIIpt ofSJSO4 million bItwccD 2009-10 IDd 2018middot19 I The aatunl ofthe remiddot1aldcf b consislnt Mh other susralnmem procuremenlllCllvities conducted by Defence ad lIS bull mult Depanmcnaal delqaCcs wiJl be Use aJlPlOVIII authorities for 11m retender process IIJld su_q~1 CONIUIs wilh ~ preferred Icnckm(s) The re-rmder will be subjeellO an ilJlCmAlptt IM conducted by the DefeDu Non-cquipmenl Chief Procwcment OfJker and wililho he levicwed by IhD LoIstics 8rieam Reform ) Govcmanre Committee whkb consisls ordJreestar Australian Defence Force and SenJor ExecUtive Service Band 1 officcnbull

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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s47C

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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COMME1lICAL-IN-CONFlDEHCE

II

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

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L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

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(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

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17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

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COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

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____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

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I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

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Name ~ppoiDtme~t DTG

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

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219900JUN12K

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FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 45: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

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COMJGRlCAL-IHcoNnDENCE 2

Dofiruc baa comuJlcd 1Yith ~ntatiwa from Depat1mcnI ot~PrimeMillistcrand cbioc and tbrDcpanmtmtofJTUlIlIIIII udDlnsulatioDlIId dIc7 have eDdofted the treaImCDIofdlc 1HDdcr it bull au~ty

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COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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COMME1lICAL-IN-CONFlDEHCE

II

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

I I

L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

l i 1 I I I I t i

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

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COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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tRercrcnce ~CDFJQUTnOIIlao1

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i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

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- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

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Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 46: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

F=-~-----~-- bullbull JiO---____ -w--r-_-___~~~~~---FOl3371213 Item 1 Serial 36

COMMERlCAL-IN-CONPIDENCE

Stephen Smith MP Minuter for Deferue

t 7AUG 2011Jbe HOD Wayne Swan MP Traaurcr ParUamem HOUle CANBERRA ACT 2600

ORIGINAL HAND DELIVERED

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tc r- Jt -I~ ~_ _ _ _ _ _ _ __t The Propmn eontistJ of Ihtte C~ acliviliu

whicb mcJude he redc~ ofthe Depalbnen of Defences wholesale foil facilities the implemcalatioo 01enhlllced JogiJ~ informaIicD Yms and 1IUIomatcd idtntlfiClllion ItIChnolosJes IIId the tender of1he Defence lntqrated Distribution SysteM (DIDS) COIl1l8tt

The cunent DIDS contnct pnwIdes perera Wilh nadcmal dbtrIbutioJl serviceS the operatlan of wholesale warchousina IDd die main~ of land equipment II cxpims on 30 Juoc 2013 Thc DJDS COftInlCt rquaems I sipificanc ~=t 10 Australill1 induslrJ with1OtaI budSIHor abe rtplIcemeDt contnICI in l0I34P7D t= total value over Iho propaocd coIl1IICt tam nom 2013-14 to lOJ7-18Lf47-=D___~j

Defence it currently preparirJamp to collducl render poceu for rcpJ1CtDICD1 contracts as put or the ImpJementition of reWIed logIrtics budneu model Puudlna for lhe cumIIt 1It6 future Dms conlJlJCls is included in Ddcncel blsdiM bucfseI allOCIIion The re-tenderis8D importBn1 element iDlhe LogIstics S1raJm ofthe Slnltqic Reform PnJpIm muI will contribute co the Stmmmiddot smqs target ofSlSOA mtJIlonbetween 2009-10 and 201119

The nalure oflhe remiddottender Is COMElalt with other 1UStainmcn procmemenllctivltlu condwtrcl by DefetllCO and u bull rault Dcpar1menlll dcCBliu will be die lPJXOyal Adulrides for the retender proce1llId subsequent contracts With the prcfcmd =derer(s) The nmiddottcnder will be nbjtcl to 14 mimi pte review conducted by lbe Defente Noo-equlpmellt CIliCfProcwcrnent Officu IDd will abo lie reviewed by the Lolistics Stream Rcfonn Oovemancc Committee whkb collsists oftJvcearar Auatrlllian Defllllce Fone 8Dd Senior Executi~ Sence Band I ofticen

piiiIiYMiIIHIau C~tCTZIIlO t Wllt217 7_ fU(IIl)RJ14 COMMDlCAIJN-CONflDENCE

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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COMME1lICAL-IN-CONFlDEHCE

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FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

I I

L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

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]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMfERICAIN-CONPIDENtt

s47C

s47C

_m___________ =middotmiddot~~======~~~==~~~~~=~-middot~middot-=

FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

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CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

s47C

s47C

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

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PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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tRercrcnce ~CDFJQUTnOIIlao1

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i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

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COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

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- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

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  • 1pdf
  • 2pdf
Page 47: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

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COMDlCAIAN-CONFiDINCE 2

Oefeftcc bas consoIted with lqucSCJditiircsfrom the Dcpenment ofLbe ~me Ministeraud CIbhset and die Department ofFinance IIJld DestuIaliori and theylIM endarecd the treatment ofthenl-IaIdet u alUltaiameot ac1ivity

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s47C

s47C

FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

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COMME1lICAL-IN-CONFlDEHCE

II

1

s47C

s47C

FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

I I

L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

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Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

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FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

L I

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I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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COMfERICAIN-CONPIDENtt

s47C

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_m___________ =middotmiddot~~======~~~==~~~~~=~-middot~middot-=

FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

I I I

COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

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D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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ii ~() be briercd on the DI~TP

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

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  • 1pdf
  • 2pdf
Page 48: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

FOl3371213 Item 1 Serial 37

I COMMERlCAL-lN(oNnDENCE

Stephen Smith MP Minister for Defence

1 7 AOO 20111Ie Hon Kevin Rudd MP Minister for fordgn Affin Parliament House CANBERRA ACT 2600 OR1GlNAL HAND DEUVERED

S47C r _ __ j ] _________ ~~ _ ---1 The Progrvm CODSijb ofdmo core activities l

v1tieh inClUde Ihe redeYelopnlCld oftbc Depea1mcnt orDctcncc wbot_c loaistics fecilili the impl~onofcnhanced Joaislics iDlimnation ayitcm mI aulDmiud idCDlificalion tccbnologlea aDd 1he II-tcnder of the Ddence Integrated Distribution System (DlDS) contnICt

The cumnt Dms COnlnlCt provides Dckncc wiIh national distnbution amiccs the operation ofwbolcsale warMOUsinlt and Ihe II1Iintcnanco of land equipment It expires on 30 June 2013 Tbt DlDS col2Cnld rqJ~scrlls elpjficanl commilnient to Australian induslry with Il toti buda for the replacement con1nlc1 in 2013-14~47 D ~ bull totl yalue over the propo~ coalrlcl term fiom 2013-14 to 201 77i8E47D J Defence Is currently pIepIrlna to conduct WIder ~ for replacem~~ as Pfl or tho Implementation or the molaed loaiaticJ INainesa model Fwtdilll for the curreal and future DJDS COlllracl is illcillded in IkJ~~s ~Ilne bpdampet allocation Tile re-~er is an important clement ia tbe Logistica SIrcIm of die Stmtesic Rerorm Pminm IDd will comribu~ to the Streammiddotuavioas larget 0($3504 million betweco 2009-10 IJId 2018-19

The nature ot0 rc-lendct is coasislCDl with other susaaiMJCnt ~cnl acLivilie1 IOnductcd by Qerence and as a rUutl Depahmental IkleplCi Will be the approyal authorilics for 116 ICmiddot~ process pd lUbsequcnt eon1nld1l wilh the precrrcd tCDdaa(s) Tbc re-ampcndct will be subject 0 m intcmal pie ~w condurte~ by tho [)cente Non-equipmeDl Chief Procurement Officer aDd will aim be revieMd bythe Losillicl Stream Reform GovemaDCC Committee Which consists oftluec-star Ausualian DeCcncc Fone and Senior Executive SCfli~ Bm-d 3 oincm

hrllam8ll~ C1ItletrII ACT liiiii T~ CO2) IIlP7 7Il00 as io2lG7luti

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COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

1 t I

I

COMME1lICAL-IN-CONFlDEHCE

II

1

s47C

s47C

FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

I I

L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

--==---~ ~ ~--

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ic- _ bull 1M ~ ~ to COMMERlCAL-IN~NFlDENCE

2

Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

l i 1 I I I I t i

s47C

s47C

bullbull

FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

L I

I I-- IJ_~

I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

v~ ~ f r- iy A~~LJl~ d-tL ~ i

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COMfERICAIN-CONPIDENtt

s47C

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_m___________ =middotmiddot~~======~~~==~~~~~=~-middot~middot-=

FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

I I I

COMMERlCA(INaJHPJDENCE

s47C

s47C

-- -Ii

I

FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

--~-

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r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

~~

NGIid I Pleas Dlua ~

bull KfulCarr

_ i I I

Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

ii

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 49: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

0--------------------- _ bull

COMMEJuCAL-INoCONFmENCE 2

DcrCDCC hat consulted with represtnfa1iftS fiom the DcparcnacDt orthe Prime Miniscet aad Cabild ~ lhe DcpartJnenl orfinanu and DerepJation and Ihey have endorsed the treatment oftht re-tcndcr II aUSCllnmcm ICtiviy

1 t I

I

COMME1lICAL-IN-CONFlDEHCE

II

1

s47C

s47C

FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

I I

L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

--==---~ ~ ~--

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2

Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

l i 1 I I I I t i

s47C

s47C

bullbull

FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

L I

I I-- IJ_~

I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

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_m___________ =middotmiddot~~======~~~==~~~~~=~-middot~middot-=

FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

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COMMERlCA(INaJHPJDENCE

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FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

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r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

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NGIid I Pleas Dlua ~

bull KfulCarr

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Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 50: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

FOl3371213 Item 1 Serial 38

COMMERlCAL-JN-CONftDENCE

Stephen Smith MP Minister for Defence

The ROQ CJma Bowen MP Mbdster nu-rmmI~ IZId ~p Pelliment House CANBEllRA ACT 2fiOO

s47C

17 m ZOtl

CiRfalNAL HAND DEUVERED

I I

L II -- IJ_____ ~_ __--no Proanun consiltl oft_core ldiViiia Whlch meludo the ~ ofthe DCpanmem oJDefcocet wholatJc loafstiea ibull

tlcilitles the iIIIpitmenlatiOl1 oJeahaDccd lositdcs informIIIion aystcms _ aufOmIItcd I idendficatioa tedmoloaica IUd 1M tender ofdle Deree ~Diltriktion S~ I

I

(DIDS) COMr8Cl ~

no currcQt DIDS contnct provides Dc1lmcc wkh nadona disCributioa urvkcla the operation of wbolaal warcbouaingllld IbolnlinterllUlcc )f IIUId aiUfpmcnL It Cllplns on t 30 JIftO 2013 The DIDS contrICI RpmCiDIS Bliampnificat commi1lllent to Australian iftdusuy with B total budsot ror the ~ COIlIJICt In 201H4~ Ifd B tolIl J varueoYamprtbe proposed coDblit tcim fiom 20l3middotl4 to 101~47D J

JbullDcfcDce i cunCI1tly prepuina to condllCt bull tender procns Cor lep~ CIOIItnscts as put of -0 impJemcntadon of he ~1Cd lOBi bualncss modaJ Fb1cina for 1M current and iutlllC DlDS contracts is iAeJucIed ill Defence hueMc tIudpt aIontion Thero-1CIIdcr is an mpoltanl element in the Logistics Stream Qrlhe SIJ1IeP Reform Propm and win eomribuTe to die Stnama savings lIrgeI orSl504 mUllan beIWeea 2009-10 and 2018-19

The nature ofdie n-lCnder is coastalt with othrr sustinmenl ~t activities eonduc~ by Defencc ud IS a reauh Depanmmtal dcIeaites will be Ihc lIJIIIIOVaJ uihorities for tbc m-tender pzoass and subsequent conUlCtS with the prdcmd tcndeJe1(s) The re-lcDdcr will be subject to an in1emal pte ~ (XIIIducted the Defence Non-cquIpmeDl Chief Procurcmmt Ofticcr ~will allO be viewed by the Loaisfics BIRam Refonn Govemance Comminec which constsu of1hrewUir AustraJIan Deteace Force - SlIDior Executive Scmce Band 3 officera

COMMERICAIN-CONFIDKNCE

--==---~ ~ ~--

$ V t~ 0WfIfn a

ic- _ bull 1M ~ ~ to COMMERlCAL-IN~NFlDENCE

2

Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

l i 1 I I I I t i

s47C

s47C

bullbull

FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

L I

I I-- IJ_~

I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

v~ ~ f r- iy A~~LJl~ d-tL ~ i

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COMfERICAIN-CONPIDENtt

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s47C

_m___________ =middotmiddot~~======~~~==~~~~~=~-middot~middot-=

FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

I I I

COMMERlCA(INaJHPJDENCE

s47C

s47C

-- -Ii

I

FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

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tRercrcnce ~CDFJQUTnOIIlao1

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i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

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FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 51: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

$ V t~ 0WfIfn a

ic- _ bull 1M ~ ~ to COMMERlCAL-IN~NFlDENCE

2

Defence bas consulted _ ~~CI ftom tho ~tof~ Prime MiDWr-Md ~bincr and be Dpnmellt OfFil1lMcl end DereIJUIadoD1Itd tbe)have ~ die tratment o1hcJampender ~ ~~ament activit)

4( Yours sincerely 1 l

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FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

l i 1 I I I I t i

s47C

s47C

bullbull

FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

L I

I I-- IJ_~

I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

v~ ~ f r- iy A~~LJl~ d-tL ~ i

bullJ I

iJ i

COMfERICAIN-CONPIDENtt

s47C

s47C

_m___________ =middotmiddot~~======~~~==~~~~~=~-middot~middot-=

FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

I I I

COMMERlCA(INaJHPJDENCE

s47C

s47C

-- -Ii

I

FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

--~-

~ bullbull - = --_-

r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

~~

NGIid I Pleas Dlua ~

bull KfulCarr

_ i I I

Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

ii

r q -

FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 52: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

FOl33712113 Item 1 Serial 39

--~===========-~~

Stephen Smith MP MinJster for Defence

Th~ HonRobert McClelland MP AtfOmI)QcoeraJ Parliament House CANBERRA ACT 2600

S47C

17 Al5 2011

ORfGNAL HAND DELIVERED

i

]_ _ JL_____ __ ~ ~1hoPropamcolllistaoflhnccorutiYidcsWhich IOclUde the ldeveloJllDCDl ofdie Depadmeol of DdCIIccmiddots wholesale togIstfcs facilities 1tse ImplemCll1l1ioD ofenhanced Joslticl iDfoinladon ~ad Illtomated identifieatloa teehMJOIPa ampmel the re-tcaderoflhc Defence Interlted Dis1ribulion S)SCem (D1DS) contract

TIle CWTeIlI DJDS ~ ptovidea Dereoce with DltlonaI diltnDution serviees the opemion ofwIlofesale wuehousiDg IIId tbe maintawlta orIud equlpment b expita 01 30 Jw 2013 The DIDS coolrect rcpnsems aliplficant commitment Eo Ausulian indusU) with toII1 budget fot lbo rcplaccmcnl CO~ in 2Ol14~ljj =a total valw over lho propDllCd contrlCl1am fro1ll201lmiddot14 to 2017middotfap4_7_D___JI

Defence i currently priparimamp 10 conduct Ccnder procat for rcpJKermat conlllcll at put of the impJemmllltion ofamphe revied loampisCics bua~a mo4cJ fUDdiaa fol tho cmmIIlDd ftslUR Dms conflICts ia iDcluded in Defence baseline budget aIoiatioii The ftIo1Cnlier is III impolUnt dampll1elll ill the Logistlea SImIID or the Slnteampie Reform Propam aud will eonlributc to the StteIIIIsavfnp carad ofS3S04 millicm between 2Q09IO and 2011-l9

The nabUC oflhe remiddotleruer Is cclIsmnt with other sustairimcnl procuremetd actlvitici eond~ by Defence end as bull resvlt DepirtmmtaJ delciat will 110 tlle appmvalluthoritles for be rc-WIder process and subscqum contrMLs with ~ prdciRd lcDdaa(e) The dicnder win be subjecllo aD IfttemaI pte review conducted by die Defmce Noa-eqWpmcnt ChiefProctgaDenl Offlccr ~will also Ilc mewed by the Loaipoundtica Slream RefoJ1ll Oovcmance Commlttoo which conaistJ or~Austnlian Dampfcncc Forte and Serlior ExecutivomiddotSaYiec Band 3 officersbull

c ACTIOO Till (02Han lDI (02) 12111 COMMERICALJN-CONFIDENa

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

l i 1 I I I I t i

s47C

s47C

bullbull

FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

L I

I I-- IJ_~

I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

v~ ~ f r- iy A~~LJl~ d-tL ~ i

bullJ I

iJ i

COMfERICAIN-CONPIDENtt

s47C

s47C

_m___________ =middotmiddot~~======~~~==~~~~~=~-middot~middot-=

FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

I I I

COMMERlCA(INaJHPJDENCE

s47C

s47C

-- -Ii

I

FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

--~-

~ bullbull - = --_-

r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

~~

NGIid I Pleas Dlua ~

bull KfulCarr

_ i I I

Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

ii

r q -

FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 53: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

~=-_--- -----____---_--- -=--- ___________ - - 0-

COMMIRlCAL-IN-CONFJDlNCE 2

Defence COIIIUI1ed with npresentalivtl from lhc Depanment oftlw Prime MInil1er and Cabinet aDd Chc Dcpartmcnt 01Fl8IIlCC and DcrcsuIa1ion and they have cncfoncd the trnIment ofthe tender as a SUSUIiamcnt Idivity

COMMERlCAL-IN-CONFIDENCB

l i 1 I I I I t i

s47C

s47C

bullbull

FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

L I

I I-- IJ_~

I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

v~ ~ f r- iy A~~LJl~ d-tL ~ i

bullJ I

iJ i

COMfERICAIN-CONPIDENtt

s47C

s47C

_m___________ =middotmiddot~~======~~~==~~~~~=~-middot~middot-=

FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

I I I

COMMERlCA(INaJHPJDENCE

s47C

s47C

-- -Ii

I

FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

--~-

~ bullbull - = --_-

r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

~~

NGIid I Pleas Dlua ~

bull KfulCarr

_ i I I

Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

ii

r q -

FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 54: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

bullbull

FOl3371213 Item 1 Serial 310

Stephen Smith MP Minister for Defence

Senatorthe Hen PCIUlJ WOJl8 17AU6 2011 Miaistct for FinlllCC and DrmguIation Plrliameat Heuse CANBBItRA ACT 2600

ORIGINAL HAND DELIVERED

i47C

L I

I I-- IJ_~

I TIle Pro(lJlm COIIIists of1hRe core oetMdu wliianqCJiidethe ~otiIiC~ ofllefince VthoIesaie loalstia faclliliel the implememsrion ofCIIhaIlccd logistb inlonna1iOD YsmDI and IVtOrnIlCd ~entifiea~ft ~1moloaies IIDd the tmer ofdle Deteme Inlepated Diltributloa System (OIDS) contract

The cUnmt mils COnInIct povides Defence with lIIIionaJ dillribudoll terVlees the opmdon orwholesale warehousiDa aDd Ibe maiateDlJlce of land cquipmnt h expires Oft 3D June W13 The OIDS ~ rcpresems IIpifiClllt C01IImicmau 10 AUS1rIIilll induatly withalOtlJ budgel rorlbetepllcemenlccmtrac1 in 2013i4~47D l=d toW value over the proposed conlnllt hm ampom 201)1410 20I18)4_7_D___]

Defence is cumndy pnpariDa 10 COJKIucl a lInder process for repllIlCIDtml CODIrEtII8 part of the Implementation ordie miIod Joalslics business mode1 Fwldb1a Ibr the cunent aDd fUture DlDS coalrIClS is included in DcfCDco _liDe budget allocatioD the tender ill an Important cJemcnt in the IosisIb Stream oftlu StnIteaic bbm Pqnan IIZId wlll contnl1Ie to tlu Strwn satataet ofSl504 million betMCll 2009-10 and 2011-19

The nature oftile re-tender ill consistent with other SUIII6inmernprocuremcmllCliyenilies conducted by Dwt~ and II a remit ~monUII deleprcs wiD be die approVIIlIIhoriliel for the n-umder process and subsequent contllCtl with the preilmd taIdaa() The re-tetdr will ~ subject to IlI ilitemal Pie review con~ted by the DefaIce Non-eqlllpmmt CNcfPmcurClZleftt Officer ad will also be ~ by the Loaisdca Stream Reform Oovemance Committee whkh DOIlSilfS oftfnestar Aumall Detence Fom iUld Senior Executive 8cnice BIIDd 3 oflicersbull

HOlM CtIMft ACT 2800 TIll (VI)IIrr7 1tOO - IQ2) uiuul COMMElUCAIIN-CONFlONCE

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

v~ ~ f r- iy A~~LJl~ d-tL ~ i

bullJ I

iJ i

COMfERICAIN-CONPIDENtt

s47C

s47C

_m___________ =middotmiddot~~======~~~==~~~~~=~-middot~middot-=

FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

I I I

COMMERlCA(INaJHPJDENCE

s47C

s47C

-- -Ii

I

FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

--~-

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r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

~~

NGIid I Pleas Dlua ~

bull KfulCarr

_ i I I

Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

ii

r q -

FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 55: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

__ =~~-~-_-_-~_middotmiddot-_middot_-_-_middot_middot_-~_- -_middot-__r___~____

COMMampRICAL-IN-CONflDENCE 2

Defence has ~nn1tedwith reprneutalMs fJVm the ~ ofthc Prime Minister and cabiMt1DII laquohe Department 01FilllllCC _ Dereau1IIion IJId hey have axIoJsed Iho treatment of the n-t~nder IS a SUltaimnent acUvilJ

v~ ~ f r- iy A~~LJl~ d-tL ~ i

bullJ I

iJ i

COMfERICAIN-CONPIDENtt

s47C

s47C

_m___________ =middotmiddot~~======~~~==~~~~~=~-middot~middot-=

FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

I I I

COMMERlCA(INaJHPJDENCE

s47C

s47C

-- -Ii

I

FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

--~-

~ bullbull - = --_-

r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

~~

NGIid I Pleas Dlua ~

bull KfulCarr

_ i I I

Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

ii

r q -

FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 56: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

_m___________ =middotmiddot~~======~~~==~~~~~=~-middot~middot-=

FOl3371213 Item 1 Serial 311

COMMERlCAL-IN-CONlTDENCE

StephenSmith MP MinUter for Defence

The Hon Mn Dreyftas QC MP Cabinet Secretlry 17 AUG ZBU Plrlilmcm HoUle CANBERRA ACT 2600

ORIGiNAl HAND DELIVERED

s47C IL 111 __ I nl_~

____ _ _ _ _ ____I The Pmsnun ccnsiltl orlinecore IICliYidea whicti include Ihe redeveloplaeat oftle Department ofJ)cleatemiddot wholczale lopdcs ftlciHtiCl abe Implcmauilion of~ IotIlllcs iorotmatloD I)SIemI and auromated idIIIltiflcl1ion technoloflts Iftd the ~orche Ddave latqpatcd DisCrilNtiOll S)IICm (DIDS) CCI1l1IKt

The eurrent DIDS ecmtract provides DefCIICC with ruuicmal dJatribIDJon services the opmlion ofwhoJcsaJ wbousIq and the rruliDtaance oflaDd equipmenL II cxpins on 30 June 201l The DIDS COJdrIC remsenls a slpiGcam commitmcnllo AIIIItDIHID inclus1Jy with focal budget tor tho lCPlamncm contract lnlOJ314~47D Itd toW value over1he Proposed cOnlDDllCrm ftom 2013-14 to 2017-1147D J Defence Is cumntJy IIdparina to eoDduct bull leader proeoII fer repllccmenl COIltIaaIII part of the implomentadoa of the reviH4 JoaIsdes IlwriIIc$lJ modeL Fundfor the ~ tIDd futuIe DJDS coiuractJ ii inclUded In Def_sIIaaetiae budaet allocation The retIder is aD importlDl clemmt In the LcsfstIcs Stream ottlle Straaeaic Rcfonn Proaram and will contribute to the SbeaIIl saviQp ofSlSO4 million belwecn 2(10910 and 2011-19

Tho nature oftbe re-tndcr it CODSisIeDt widJ olber IUSlairuncat ~ activities conducted by Dcrewu IIPCI as I rcsuIl J)cpatmentaJ deiCaates will be the IIIIPfOvaJ authoriliea for lhe remiddottender process and lUbRquent conhllS With the prcJCrrcd tenderer(s) 1be remiddot1cndcr will be subject to III internal pte review coaductcd by the DcfCDGO Non-equlpman ChiefProcunment Oflker and will abo be eviewed by aha Logisdca Stream Jttotormmiddot Govenvmce Committee which COIIIistI or thne-star Ausualieia Deftrtcc Fanc and Senior BxClCUlive Service Bend 1 offieers

~~AOTHOO TtII(OI)Iim ha(Q2)un tt COMMJRJCA IN-cQNPlDENCE

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

I I I

COMMERlCA(INaJHPJDENCE

s47C

s47C

-- -Ii

I

FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

--~-

~ bullbull - = --_-

r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

~~

NGIid I Pleas Dlua ~

bull KfulCarr

_ i I I

Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

ii

r q -

FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 57: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

I

---- ---~~-----~--------~-~------------------------------

CQMMERlfAamcONf1DEHCE 2

Defeate hat IODIUlted with rqiiacntaliVa ampom amphe ~tot tbe Priine Minister Ind Cahl ihe Dcpartmem OfFiNllCt ~I)atpoundllalion s lhl) hhl endorKd the trcaImeftt ofth1~mltr1S I ~MI~ ectivi

I I I

COMMERlCA(INaJHPJDENCE

s47C

s47C

-- -Ii

I

FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

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tRercrcnce ~CDFJQUTnOIIlao1

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ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

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AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

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AvMM SIai

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(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

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FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 58: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

-- -Ii

I

FOl3371213 Item 1 Serial 312

UNCLASSIFIBO SmilhllO WMA I 1-0006 J

JlJJ~ flttCltllCe VCDFIOuT1201 1401 ~

AuJlllllbn Cmtrftmrnt Drpan4llrAl 01 OttlaquoMe ~____~__M_I_N_IST_middot~E_RlA--L~S~V~B~MDS~~S_O_N________-J ~1_W_li_~_____

D4re Dept ApprovCIJ UEE Dale Due 2MAR lOll

for Action MiniUtr ror Defence For Info ScoBtor Can

f

PuTpOSt

To advise you olthe rescheduled nlcASe 10 nvllSfQi of Ute Defence Integrated OistrihutlonSystCm Contract (DIDS) rdender -

Kty ~olntll

I You were previously advised that abe Defence tosiSliQ Trnsfonnalion Program (OLTP) would release Ihe relender of die Defence Integrated DiSlribulion System ContlllcI (DIDS) to

~ ind~slry in April 2012 (VCDFOUTI20111401 - altllhmcnt A) howccr the DIOS relender will ~ n(lW be released to the market illibe end ofJune 2012

2 Attachment A also advi~d industry was briefed 00 Ihe original tlmerrame 10 October 20) I

3 The extra thrcc month$ for RFT preparation allows tor 8dditicmal1egol scrutiny to ensuru the quaJily (f Ihe documeruation

4 this change in schedule does not imp1cl other elements otthe proampfUm as advised previously 81 rtochment A Sufficienl time has been allocated ror industry response evahlation of respanlCS by Defence and negulialloD of conlrucls in order 10 commence transition 10 the new service providers from mid 2013

Industry will be briefed on Ihe revised limeline and be proVded with further tn(onnalion relntlng to the scope ofwoJf( on 20 February 2012

Attachmenl A also proposed that you 1ecclve D bl1ef on the igt1~tp In order to give you D deeper undCfStanding oflhis complex and diverse progrDm ofwork It IS recommended Ihnt this hrieling be S(heduled fOr the ncar future

UNCLASSIFIED

J ~

--~-

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r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

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I - J Information Addresler

~~

NGIid I Pleas Dlua ~

bull KfulCarr

_ i I I

Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

ii

r q -

FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 59: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

~ bullbull - = --_-

r---~---~----lUNCLAS~IFIEO $Jriitt-lO I liMA 2ooots I)

tRercrcnce ~CDFJQUTnOIIlao1

~ middot lle~om~ndallon~ fbal )tlU

i NOlllthc ci1nogc in plamting dales (or the DLTr RFf ~Icase ~PI~~

ii ~() be briercd on the DI~TP

gre l~cd $~ ~ ~ M ~ ApproVed Dy - I

i1M sT~lB --1vJ~ Air Vice-Nomhal ~---=~ - )i~ shyCommlndq- Joint Io8i~ticsmiddot bull

l7-Fcbruaty20imiddot2 -lI J

Con~C1 OI1kr Mr David McGI~ Piwne 04 ~~27039IfF r shy- Ibullmiddotrrlmar Addrelsee

slSinidl1

I - J Information Addresler

~~

NGIid I Pleas Dlua ~

bull KfulCarr

_ i I I

Altllchwnl A VCDFIOUT120J 14fndatecf24ALlgUsI20If

UNCLASS~FrEb

ii

r q -

FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 60: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

r q -

FOl3371213 Item 1 Serial 313

AttachmentC

MINISTERIAL

MEDIA RELEASE

DRAFT

1Date - Proposed for 29 June 2012 MECC oOOioo I

DEFENCE LOGISTICS SUPPORT - REOUESTS FOR TENDER

The Minister for Defence Stephen Stni~ today announced that Defence is undertaking two major tender processes that will significantly transform the future of commercial support for Defence Logistics

The tmJt ~er involves lIle QOmmercial support for national warehousing and distribution seriices The second tenCier covers land materid maintenance services

These two Requests for Tender are a major component of tho Defence Logistics Transfurmation Program wbich is desisned to modernise the logistics network and de1iv~ further efficiencies

BOth tender processes provide the opportunity to rationalise the Dumber of outsourced logi~cs support contracts that are manased by pefence

The new logistics services contracts are intended to be in place by 30 June 2013 with an initial term until 30 J~e 2019 willl extension options

The two Requests for Tender were opened to Industry today Fnrther information is available 00 the AusTender website wwwtendersgoV8U

Media COJlwts

Mr Smiths office 02 6277 7800 Defence Public Affairs 02 6127 1999 or 0408 498 664

1

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf
Page 61: r-- ~===:; 1ltem .r Derrnce MINISTERIAL REPRESENTATION I€¦ · attachment A. A copy ofthe letter from Mr Bastian is provided at attactunent B. The letter was not copied to any other

CteaJjDce

Name ~ppoiDtme~t DTG

Dmftel by -

--~

COLA Maclean

PRTf)~TP 21083oJUNt2K

Cltuf~d by (Subject matter expert)

MrD McGahey

PDDLTP

219900JUN12K

CleQredmiddotbJ (GrouplServlu j stilI 0 tlbDVi)

AvMM SIai

CJLdG

- - Clured by fDintctor Public Affllln) ClUNdby

(ASCAMor deleRllte) middotjohn And~n_

DCAM

21 lim 12

Ministerial A ctlon (tDblJeomp14t6d bJl DGPAJ

For clearance FOT Information NoAciion

FOfllrded to Clfllntd by (MInlstnJ$ OJllCII)

=

  • 1pdf
  • 2pdf