Issues raised with the committee in Bendigo
Introduction
2.1
This chapter summarises the main issues raised during the committee's hearing
in Bendigo and includes an overview of the economic, social and environmental impact
of Defence activities and facilities in the region. Key areas discussed with
the committee were: communication and engagement mechanisms; barriers faced by
local businesses; and Defence and Tier 1 contractor engagement with local
businesses.
Puckapunyal Military Area
2.2
The Puckapunyal Military Area (PMA) is a major Defence training base located
in central Victoria, close to Seymour within the Mitchell Shire. It was
initially used as a mobilisation and training facility in World War 1, and was
formally established as a base in 1939.[1]
2.3
The PMA is an example of a Category 3 training area. The primary
function of such areas is to:
...support the conduct of single Service collective training
with limited potential for combined training, and sufficient manoeuvre space
for up to sub-unit land, air and sea forces.[2]
2.4
The PMA includes:
...the Headquarters Combined Arms Training Centre (CATC), the
School of Armour (SoARMD) and School of Artillery (SoARTY) as units of the
CATC, and, Joint Logistics Unit Victoria (JLU-V) and the Army School of
Transport (AST) from the Army Logistics Training Centre (ALTC). The PMA also
supports training by other Australian Defence Force (ADF) Units, Defence Cadets
and civilian organisations such as Police and Emergency Services. There is also
an on-base community comprising of military members and their families who
reside in married quarters, with supporting infrastructure including a
commercial precinct and primary school. The PMA has an area of approximately
50,000 hectares.[3]
2.5
Activities carried out at the PMA also include vehicle maintenance,
refuelling, printing, and the use of firing ranges and fire training areas. The
base contains two sewage treatment plants, a fire station, several electrical
transformers, and numerous landfill areas that have been used to dispose of
waste materials from historical site operations.[4]
Economic impact of Defence activities and facilities in the region
2.6
Councillor Rhonda Sanderson, Mayor of Mitchell Shire Council, summarised
the impact of Defence in the region, stating:
...Mitchell shire is very proud to host the Puckapunyal
Military Area in our shire. There's a very long and enduring association
between Puckapunyal and our community and between Defence and our
community—going back to 1887, in fact—in particular the township of Seymour.
Many Seymour residents are ex-military...The PMA supports many positive economic,
social and environmental benefits for Mitchell shire.[5]
2.7
Councillor Sanderson described the economic impact of the PMA in
the region:
...Puckapunyal is a significant economic generator for our
shire and for the region. It's the largest single employer for our shire, with
over 1,000 jobs located on base according to the 2016 census, which is about 10
per cent of our workforce. It includes approximately 640 jobs for non-military
personnel....It's estimated to generate over $230 million of local economic
activity in Mitchell shire.[6]
2.8
Mr Stuart Locke, President of Seymour Business and Tourism (the local Chamber
of Commerce), said expenditure relating to PMA:
...permeates throughout the whole community. Every resident or
anyone working on the base—well, there's no-one on the base who doesn't have a
job. We're very lucky; we've got a demographic that's fully employed. For them
to use Seymour as their first port of call, whether it be for food, drink,
health care or education means we are quite fortunate in that respect.[7]
2.9
Mr Chris Cheal, Economic Development Coordinator from Mitchell Shire
Council, outlined the current 'utilisation of local suppliers and service
providers to provide value for money in procurement at PMA'.[8] He stated:
Several local businesses benefit by supplying the PMA with
goods and services. Some of these examples include passenger transport
services, automotive repairs, locksmith services, cleaning, construction, building
maintenance, earthworks and land management services...
We're confident that our local companies provide excellent
value for money. They're located very close to the PMA, so they're able to have
low transport costs because of this and they can guarantee quick response
times. So that value proposition is very clear in respect of those things.[9]
2.10
Mr Locke similarly noted some businesses have 'found a niche in the PMA
economy', nominating motels, dry cleaners and carpet cleaners as examples of
local businesses benefiting from activities at the PMA.[10]
2.11
Mr Cheal also told the committee many 'people on the base will do their
shopping at one of Seymour's four supermarkets, and that is good for Seymour'.[11]
2.12
Ms Linda Beilharz OAM, Chair of Regional Development Australia (RDA)
Loddon Mallee, added:
I know that family members who are not part of the Defence
organisation at Puckapunyal but live there do work in Bendigo. In terms of
economic value for our region, that facility is quite important to us here.[12]
2.13
Ms Beilharz indicated that there were 213 direct jobs across the
Monegeetta site at Macedon Ranges and the Australian Geospatial-Intelligence
Organisation (AGO) in Bendigo.[13]
She suggested that this equated to:
...something like $38 million in salaries and wages going
to those people within our [region] and a contribution of $75 million to our
region from all the different inputs and outputs from those sites being there.[14]
2.14
She also noted local manufacturing businesses undertaking work for
Defence were important to the region's economy.[15]
Social impact of Defence activities and facilities in the region
2.15
Councillor Sanderson mentioned some of the ways in which the local and
base communities already interact, such as commemorative events, Anzac Day
parades and the annual Base Command and Defence Community Organisation Welcome
Day for new residents at the PMA.[16]
2.16
Mr Locke outlined how demographic changes at the PMA have altered its
social impact on nearby communities:
The base was once full of
families. Now it's more trainees on specialised training. We see the trainees
on the base for a series of weeks or months and then they depart.
...
Demographic changes also led
to the demise of the Puckarook Football & Netball Club... It was in
existence for a number of years, but I think it has run out of puff and that's
pretty much because there are fewer family units on the base than there were.[17]
2.17
He also highlighted the impact of demographic changes on local schools:
The loss of the youth population that went with the units
moving away affected the local schools. They're still affected today as lost
student numbers equal lost funding, which equals reduce[d] curriculum choice,
which equals less attractive scores and so the downward spiral continues. The
units that left were very much family-orientated units; they were mother,
father, children. Now they're more trainees coming in on specialised courses.[18]
2.18
The committee heard that community interaction is further constrained by
difficulties accessing facilities at the PMA for non-Defence community members,
and limited options for people living at PMA to travel to Seymour. For example,
Councillor Sanderson said:
The high level of security combined with the distance between
the base and Seymour means the interaction between the base and Seymour can be
challenging at times. Recent security changes have meant that getting to the
base can be difficult. Access to Seymour and neighbouring towns is also
difficult for Puckapunyal residents and especially the trainees, many of whom
don't have a vehicle with them when they come to train at Pucka[punyal]. As a
result, both the communities suffer despite the opportunities that exist.[19]
2.19
She added:
I know from experience that
some trainees can be quite isolated. If someone can manage to get a car they
might all car pool but sometimes they're just stuck on the base for the
duration of their training, pretty much. That's unfortunate, because they could
be visiting the different townships in Seymour, socialising and learning a bit
more about the local community. But they're not, so that can provide some
challenges.[20]
2.20
Mr Locke indicated some trainees might not engage with the local
community because they leave the region altogether on weekends:
On weekends there is a massive exodus of trainees to
Melbourne or wherever else to get off the base. We noted that change and that
we have a very low uptake of public transport users during the week but an
incredibly high one on weekends. It's just a fact. We train the new enrolees in
courses on the art of myki, our state government transport system.[21]
Fostering further connections
2.21
The committee heard about opportunities to enhance community
interactions by improving access, establishing new community events, and
sharing facilities such as the military museum located in the grounds of the
PMA.
Improving access
2.22
Mr Cheal spoke about the consequences of the PMA security arrangements.
He told the committee 'Mitchell Council fully understands the need to operate
under safe base Charlie', but noted:
...we do recognise that it's made interaction more difficult even
between local sporting clubs. I've consulted with schoolchildren for the
Seymour structure plan and they told me that it's difficult to visit a friend
after school if they're on Pucka[punyal]. They can't just have friends come
over. It's easier for kids under a certain age—I think it's 14 or 15. I'm not
100 per cent certain about that age cut-off to get onto base. But even for
parents to try and get on to pick them up afterwards can be difficult.[22]
2.23
Mr Cheal suggested the creation of tailored security arrangements to
address this barrier, such as a pass allowing local residents to register to
pick up their children more easily.[23]
2.24
Mr Locke suggested:
...the possibility of a bike path between the two communities.
Whilst it's of no real advantage to us, being unable to get into the base, for
the PMA community, which is a young community, that would be a bonus to the
residents of the base via their health and interactions. My experience with
many of the young fellas who come on a course is that they bring their bikes and
ride into Seymour to catch the train or to go shopping.[24]
2.25
Mr Locke also discussed the issue of updating public transport
infrastructure such as timetables on the PMA to make it consistent with what is
provided outside the base.[25]
He indicated there was a longstanding 'impasse' between Public Transport
Victoria and Defence regarding responsibility for the installation of the new signage
and equipment on the PMA.[26]
2.26
On notice, Defence advised the committee that bus stops and shelters at
the PMA have been maintained by Defence on the understanding that they belonged
to Defence. Defence also provided further information:
In March 2010, Metlink (working for then Victorian Department
of Transport–now Public Transport Victoria) requested access to Puckapunyal to
maintain and upgrade the bus stops. Defence advised that a licence agreement
would need to be put in place to allow this to occur in line with public
liability requirements and to meet Defence conditions for access.
Subsequent correspondence between the Victorian Department of
Transport and Defence included Defence offering to consider a proposal by the
Victorian Department of Transport that would negate the need for a licence
agreement. Ultimately, the Victorian Department of Transport advised that they did
not own the bus stop infrastructure, and therefore no licence agreement was
necessary as Defence had responsibility for maintaining or upgrading the bus
stops.
Defence continues to maintain the bus stops at Puckapunyal on
a break/fix basis using Defence's Base Services Contract contractors. [27]
2.27
Furthermore, Defence advised that they will contact Public Transport
Victoria to recommence discussions to ensure that bus stop standards are
applied at the PMA.[28]
Additional community events
2.28
Mr Cheal told the committee about a community market in Seymour:
One of our local businesses held a market in Seymour last
year, trying a new initiative. Historically, Seymour has had a monthly Saturday
market. Another business started up a Sunday market, and that was really
popular because it was promoted well on the base. So there is definitely a
desire for things to do on the weekends—particularly on Sundays, which can
otherwise be a very quiet and isolating day.[29]
2.29
Mr Locke provided an example of an event planned to foster connection
between PMA residents and the broader community:
It's a little
difficult for us now as a community to welcome new arrivals. We're not really
notified of when the turnover occurs. Obviously, it's quite hard now for
businesses to get on the base for an open day. So, rather than having an open
day on the base, we're looking at trying to hold an open day in the form of a
film night to get the residents of Puckapunyal to come out to Seymour and have
a good time.[30]
Possible Defence use of community
facilities
2.30
Mr Locke identified 'a general decline in the facilities for the base',
including the closure and lack of maintenance of some recreational facilities.[31]
He raised the possibility of 'better utilising the facilities outside the base,
rather than trying to revalue and upgrade the facilities there'.[32]
2.31
Mr Locke suggested Defence could subsidise the use of the amenities in
Seymour, such as the golf course, leisure centre, and shire pools, arguing this
'would be at less cost to the ADF and a big benefit to the local communities'.[33]
He also raised the possibility of the hospital in Seymour delivering more
health services to the PMA residents.[34]
Community use of Defence facilities
2.32
Councillor Sanderson 'strongly supported' Defence's intention to upgrade
the Royal Australian Armoured Corps Memorial and Army Tank and Artillery Museum
(the tank museum).[35]
She also supported the proposal to move the tank museum to the edge of the PMA
to make it more accessible, stating:
We believe there is a rough time line for that of 2022. If
that could be stuck to or perhaps even brought forward, that would be wonderful
for the local community as well as for the trainees and the museum staff to
have the exhibits displayed as they should be with honour and respect, and to
proper standards as well. The new museum would greatly enhance and strengthen
the combined tourism economy of Seymour.[36]
2.33
The Mitchell Shire Council argued such a move would:
-
Provide Seymour and the surrounding area with an engaging
military heritage visitor attraction to strongly complement the Vietnam Veterans
Walk and the Australian Light Horse Memorial Park.
-
Greatly enhance and strengthen the combined offer of Seymour, and
the Heart of Victoria tourism region, around military heritage
attractions.
-
Boost tourism, visitor numbers, jobs and other tourism businesses
in Seymour, Mitchell Shire and the wider Heart of Victoria region.[37]
2.34
Mr Cheal said:
You could imagine a fantastic facility and new museum at the
fence line that is more accessible to people at the outside but still able to
be secured if necessary from on base because it does have some operational
tanks within its collection. I also see opportunities, perhaps for a cafe with
coffee available on weekends.
...
The grey nomads are a significant part of our tourism market.
Seymour is obviously on the highway for most people heading north from
Melbourne, a source market for grey nomads. If we could have a tank museum, I
cannot stress how much I think it would help boost the military tourism.[38]
2.35
On notice, Defence provided the number
of visitors to the tank museum between October 2016 and October 2017:[39]
| Visitor Numbers |
|
| ADF/APS/Cadets |
6,052 |
| Civilian |
2,564 |
| School students |
506 |
| ADF/ADO trainees |
546 |
| Total |
9,668 |
Management of environmental impacts
2.36
Mitchell Shire Council judged that the 'PMA is generally well managed in
terms of environmental impacts'.[40]
Its submission stated 'the large area of the site including newly forested
land, accommodates a variety of flora and fauna and is likely to be a
significant reservoir and bio-link for a wide range of species in central Victoria'.[41]
2.37
Mr Cheal noted:
...the PMA actively manages environmental issues such as weeds,
pest animals and biosecurity threats. There have been issues in the past with
Johne's disease, but that has been managed very well. Apparently, there is a
wild goat population that lives on the base and we have sheep farmers just
nearby to the base. Issues like that are very important to be managed carefully
and we believe that PMA does that very effectively.[42]
2.38
Mr Locke briefly raised the 'massive amount of kangaroos on the
base' as a possible issue relating to the environmental management of the PMA.[43]
Communication and engagement mechanisms
2.39
Witnesses made a number of suggestions for how to ensure local
businesses are aware of business opportunities with Defence and Tier 1
contractors, and how to publicise the capacity of local businesses to tender
for Defence work.
Use emergency services as a model
of positive engagement
2.40
The PMA is represented on the local Municipal Emergency Management
Planning Committee (MEMPC). The MEMPC is part of Mitchell Shire Council's
governance structure supporting the development and implementation of the local
Municipal Emergency Management Plan.[44]
2.41
Mitchell Shire Council described Defence collaboration on emergency
services as 'a positive example' of consultation and communication with local
government and the community.[45]
Mr Cheal stated:
Recently, the communications have been very good between PMA,
in particular the Country Fire Authority and council. Joint emergency
management exercises with PMA have been conducted and they have improved the
lines of communication and understanding about capacity and capability. We
would point this out as an example of when everyone is willing and comes to the
table communication can really assist and aid in improving operational outcomes
in an area, and there could be some examples there coming back to something
like procurement.[46]
2.42
Mitchell Shire Council outlined the following plans to further develop
these cooperative arrangements:
Relief and recovery arrangements are being reviewed to
reflect PMA’s management of civilian staff and residents living on the base
during and after an emergency event. PMA are developing arrangements to look
after civilian staff and residents without the need to send them to Seymour
where they may overwhelm existing facilities and services.
...An emergency services multi-agency welcome is being considered
for the new base commander early 2018; it is planned to bring together agency
representation from emergency services, Council and support agencies to meet
the new base commander.[47]
Establish a regular roundtable
meeting
2.43
In addition, Mitchell Shire Council suggested the creation of quarterly
roundtable meetings to discuss commercial opportunities with representatives
from Defence, local government and chambers of commerce, and development
agencies such as Regional Development Australia and Regional Development
Victoria.[48]
Mr Cheal explained:
I believe that just having the opportunity to have that round
table, to understand perhaps what opportunities are coming up over the coming
six- or 12-month period, would really just help to get the message out there.
We could then communicate better with local companies through
the chamber of commerce perhaps, let them know that opportunities are coming up
and to start thinking about how to do it, and maybe demystify some of the
processes around procurement and help them realise that there might be smaller
parts of a contract that can be bid for.[49]
Engage regional development
organisations
2.44
Ms Beilharz noted there are not currently strong connections between RDA
Loddon Mallee and Defence, stating:
We've done regional planning, and the regional planning has
identified opportunity and need. I don't think that the Defence Force
participated in that process. That means it hasn't been alerted to us in the
early stage of what the opportunities might be.[50]
2.45
She indicated RDA Loddon Mallee would be seeking opportunities to engage
further with Defence.[51]
Create contact points
2.46
Witnesses suggested the level of Defence consultation and engagement
with the local community depends on the particular individual holding the role
of base commandant.[52]
Councillor Sanderson acknowledged the 'exceptional' work of the Puckapunyal
Army base commander, Colonel Marcus Constable, to engage with the local
community.[53]
2.47
However, the committee heard that much of the commercial work
potentially available to local businesses is managed by the Base Services Contractor,
rather than base commandant. Ms Alice Jones First Assistant Secretary, Service
Delivery, Defence, stated it is the role of the Estate Maintenance and Operation
Services (EMOS) manager 'to liaise with the SMEs around possible opportunities,
within their [remit], to do with base service contracts'.[54]
2.48
On notice, Defence advised:
The [Base Services] Contract specifically requires each EMOS
Contractor to engage with a range of small-medium enterprises (SMEs), and
provide additional ongoing support to these SMEs to enable them to improve
their service delivery, develop their capabilities and to continue to meet
Defence’s changing requirements.[55]
2.49
The Department also noted that the Base Services Contractor must report
annually on the number and percentage of SMEs engaged annually. These reports
are provided to Defence and are commercial in confidence.[56]
2.50
Mr Locke illustrated how Defence and EMOS personnel can inform local
businesses and support them to seek commercial opportunities. He described how
his own bus company had been supported to become a preferred operator,
explaining to the committee:
...it was more about, again, this procurement panel and knowing
who to speak to and what to do and how to find out about it. The local base
manager insisted then on us meeting the contractor, Broadspectrum, and starting
a process of applying to be on that preferred operators panel, which we've
done. We now provide quotes for tasks, and at times we are hired; our vehicles,
our drivers and their local knowledge are utilised. We're thankful for that,
and thankful to the base manager who helped open some doors for us.[57]
2.51
Witnesses discussed the possibility of creating clearer structures for
disseminating information about business opportunities. For example, Mitchell
Shire Council called for the '[i]dentification of clear 'contact points' within
ADF for local government and local businesses in relation to forthcoming
opportunities'.[58]
2.52
Mr Locke supported the idea of Defence contacting Seymour Business and
Tourism or the Mitchell Shire Council to communicate opportunities for small
businesses to engage with Defence work.[59]
Utilise local channels of
communication
2.53
The committee heard that different types of businesses become informed
of commercial opportunities through different channels. For example, Mr Sam
White, General Manager of Hofmann Engineering, said that Hofmann Engineering
monitors digital platforms and employs product managers to keep track of
Defence procurement processes.[60]
2.54
However, Mr Locke suggested Defence should be:
...a little more aware that small business doesn't really
function in the cyber world as much as people think it does. Even I still view
the local paper when we know that there are things going on out on the base.
The world deals with big business, and small business seems to be left
wondering how big business does find these tenders. It's not that small
business has really any desire to win large tenders—we don't have the ability
to do so—but we don't even seem to be able to contact the winners of those
large tenders to find out if we can help to value-add their operation.[61]
2.55
Mitchell Shire Council similarly supported the provision of information through
regular local advertising channels, such as regional newspapers.[62]
Opportunities for collaboration
2.56
Mitchell Shire Council suggested local businesses should be supported to
engage with Defence work by '[r]aising awareness amongst local businesses of,
as subcontractors, what they could provide, rather than assuming that they have
to fulfil a whole contract'.[63]
2.57
Mr Cheal expanded:
In terms of encouraging local
businesses, again I've seen in the recommendations [from previous interim
reports of the inquiry] and have also heard through our chamber of commerce of
being aware of the opportunities at that smaller level. A great example out of
South Australia was that any businesses would baulk at the idea of going for a
contract to build a submarine, but there may be a certain type of widget that
is required. There is that small opportunity if those opportunities were
identified and then communicated locally.[64]
Barriers faced by local businesses
2.58
The committee heard about challenges for local businesses that seek work
with Defence and Tier 1 contractors, and discussed some suggestions for
addressing these challenges.
Access to the PMA
2.59
Mr Locke told the committee that security arrangements limiting access
to the base act as a barrier for small businesses:
Some of the small businesses I spoke to, who I assumed had
contracts and ongoing work out on the base, now have dropped off because of the
obligation to fill in all the paperwork and to hold passes at the gate. If
you're supplying parcels or you're supplying gravel, it's not worth your time
to sit and be processed when you could be doing other work. One operator in
particular said, 'I just don't do it any more'.[65]
Documentation
2.60
Witnesses provided different perspectives on the extent to which dealing
with documentation was problematic for businesses.
2.61
Mr White, General Manager of Hofmann Engineering, suggested that the
requirements of Defence contracts were not too excessive in his experience,
stating:
They make good business sense. They're not extremely onerous.
At the end of the day, it's about the people on the front line. If you don't
get the paint right, for example, the last thing we want is a vehicle being
seen... inappropriately.[66]
2.62
He implied that, regarding paperwork, the military were no worse than
other industries, stating the 'documentation is significant and necessary, but,
if you wanted to do the work today and get paid tomorrow, that is just in no
way realistic'.[67]
2.63
In contrast, Mr Cheal told the committee about some small businesses
within the local community 'that feel that the procurement process is overly
onerous and can work to exclude some companies from providing services even
though, as we've heard, it's such a large part of our economy'.[68]
2.64
Mitchell Shire Council suggested procurement arrangements should be
simplified for local businesses wherever possible.[69]
Payment processes
2.65
Mr Locke underlined the challenges faced by small business in receiving
payment from Defence contractors, drawing on the experiences of his own
business. He described:
...the time lapse and the compliance to adhere to a system of
invoicing with Broadspectrum that, frankly, borders on the comical. Despite the
employees in the company, and their best endeavours to get our claims
processed, no-one really seems to understand why some invoices are paid and
some invoices aren't. There seems to be a host of different reasons for not
being paid. In my invoice folder, that I have here from my accounts lady, it
shows the oldest invoice is from July; it's now November. That's a bit of an
issue for small businesses.[70]
2.66
Mr Locke also related the experiences of a local locksmith who has undertaken
specialised training and accreditation to work in high security areas within the
PMA.[71]
While the locksmith had not experienced payment delays when working with
Defence directly, Mr Locke told the committee:
The current contractor, Broadspectrum, held up all of his
live invoices for a very long period of time—six months or so. He eventually
found out that he had not filled in an equipment supply form, which is quite
odd, because he does not supply equipment but instead supplies a service. It
took several months to get to the bottom of the cause. For him, the frustration
is that his bills are only hundreds of dollars, and to go hunting to find the
answers is really negating any profit he would have made for those particular
jobs.[72]
2.67
When asked what would assist small businesses to bid for Defence work,
Mr Locke recommended 'less onerous compliance and less of the whole red tape of
filling in forms'.[73]
He added '[m]ost of what you fill in is not even relevant to your operation'.[74]
Opportunities to mitigate
reimbursement challenges
2.68
Ms Jones responded to Mr Locke's locksmith case study:
Some of our payments are
delayed because they don't attach the certification which actually proves that
the equipment is safe—so our fire extinguishers work and we can maintain our
airfield. Some of that does require the subcontractor to be a little more
responsible and organised in how they put their paperwork in as well. I think
there is a bit of mutual obligation there, but I do agree with you that we perhaps
need to look at how we can encourage our contractors to improve the process.[75]
2.69
She agreed to:
...have a chat with our providers—my specialty is in service
delivery—around using some co-design and working out how we can get their forms
to be a little more intuitive or easy to use, maybe. Most of the time it is due
to a lack of the right information, but I think we need to improve
the process.[76]
2.70
Mr Locke provided an example of the type of training that businesses
find useful in this context. He told the committee that the staff of a heavy-diesel
repair, manufacturing and parts supplier company based in Seymour:
....would like to make it known that the webinar training
session they do in order to handle the payments process by the ADF is
fantastic. We would really like to think that perhaps the contractor on the
base could deliver some sort of similar package, because in the case of this
particular business, and with others in the case study, they have trouble with
the invoicing and payment schedule they work with under the contractor system.[77]
Building capacity
2.71
Mitchell Shire Council suggested local businesses should be supported to
tender for Defence work. It raised the possibility of 'events or workshops
targeted at helping to train and boost capacity in local businesses'.[78]
Possible business opportunities
2.72
Mr Cheal told the committee that coffee is not available on the PMA on
Sundays, and suggested this was because a single entity has 'the sole contract
for providing food services on the base', and therefore 'it's not possible for
someone [else] to come onto base and provide that service on a Sunday, even
though they're not trading'.[79]
2.73
Ms Jones told the committee:
AAFCANS [the Army & Air Force Canteen Service] did trial
coffee being available on Saturdays and Sundays, but it ran at a loss. There
wasn't a demand for it. As one of the previous speakers said, most of their
trainees head out for the weekend. It was actually trialled.[80]
2.74
When asked by the committee about the potential for a local business to
provide additional food or beverage services on or close to the PMA, Brigadier
Cameron Purdey, Director General, Logistics, Department of Defence, stated:
The arrangements for licensing of local businesses on the
Puckapunyal Military Area are controlled either through Defence Estate and
Infrastructure Group or through AAFCANS. There would need to be agreement about
what sort of footprint was being placed on the base.[81]
2.75
Ms Jones also noted there may be security considerations regarding the
provision of food and beverage services to residents of the PMA close to the
front of the base.[82]
Defence and Tier 1 contractors and their engagement with local businesses
Encourage and quantify local
business engagement
2.76
Ms Jane Wood, Acting Assistant Secretary, Non-Materiel Procurement, Department
of Defence, noted Defence encourages 'big contractors to engage as much as they
can with the local community'.[83]
She stated:
There are reporting requirements in each of the base services
contracts that Alice [Jones] mentioned for them to tell us how they're engaging
with local communities, which SMEs they're engaging with and how they're trying
to encourage local businesses to participate in what they're doing.[84]
2.77
Mitchell Shire Council nominated a range of measures which Defence could
adopt to further 'maximise the opportunities for local suppliers to provide
goods and services to PMA'.[85]
2.78
These measures included requiring Defence contractors and subcontractors
to comply with local content minimum quotas.[86]
Mr Locke also indicated he was supportive of the suggestion that Tier 1
contractors should be required in their contracts with Defence to engage with
local businesses.[87]
2.79
On the general topic of local content provisions, Mr White stated:
It's been wonderful. From our perspective, particularly here
in Bendigo, we've noted it from the state government with the trains et cetera.
It's great to see an initiative like that starting to drive through into the
military side of things; it's a moving space—is that the nice way to put
it?—and if we don't embrace it, the likes of Hofmann that is, we probably won't
be able to take the opportunity to areas where we see it can really improve for
us in Australia.[88]
2.80
Mr Cheal discussed the possibility of adding rural and regional SMEs to
the list of exemptions under the Commonwealth Procurement Rules. He argued 'I
think that would be of great assistance because many do struggle with the
processes you need to go through and the certifications that you might need to
hold'.[89]
Mr Cheal noted:
A common comment that I've heard from businesses over the
last two years since I've been at council is that many of the contracts are
nationally procured. So, if we were to take food services, for example, there's
a national procurement system in place and there's one provider of food on the
base, effectively—food, coffee shops and the like—so there are difficulties
then in getting services in there.[90]
2.81
The committee heard that a local small business franchise, Cartridge
World, had previously supplied some PMA sites and received payment via credit
card.[91]
However, Mr Locke explained that this 'sound relationship' ended once the
particular person procuring Cartridge World's services went on leave and 'it
was revealed that the preferred supplier was not being used'.[92]
Mr Locke told the committee the Cartridge World franchisee sought to become a
preferred supplier for Defence, but 'he was told that there was not any way
that could be achieved'.[93]
2.82
Mr Locke emphasised:
Local businesses just want the chance to tender for services
and at least have some access to the panel for procurement, if they meet the
criteria. They don't know why they aren't allowed to.[94]
2.83
Responding to this case study, Ms Wood said:
I understand that printer cartridges are part of the
whole-of-government arrangements and, as you might be aware, Defence is
mandated to use those arrangements; we don't have any options. In respect of
printer cartridges, I understand that it's a Defence policy rather than a
government policy that we use our stationery providers for those and whole-of-government
office machines providers. It is Defence policy...In saying that, the Defence
policy is that you use those arrangements unless there is a good reason not to,
and I suspect that value for money would be a good reason if it's cheaper to
get it from the local community.[95]
2.84
On notice, Defence provided further evidence and advised that purchasing
from Cartridge World ceased in 2011 upon the Department of Finance's
establishment of a mandatory whole-of-government arrangement for the supply of
products for printers. Under the new arrangements, printers and multi-function
devices are either purchased under a maintenance agreement where toner supplies
are provided by the supplier with the associated cost charged to Defence, or
entities purchase a printer outright and subsequent toner supplies are
purchased via another mandatory whole-of-government standing offer for stationery
and office supplies.[96]
2.85
Furthermore:
Defence, over the past two years, has also implemented a
print device rationalisation project where the network printers are being
removed and replaced with MFDs [multi-function devices]. Therefore, the
requirement for Defence to purchase toner supplies directly has greatly reduced
and, other than specialist type printers, will gradually be phased out.[97]
2.86
While the committee accepts that Defence is required to adhere to the
mandatory whole-of-government arrangements, the evidence provided to the
committee suggested that the information to explain the cessation of the
purchasing arrangement was not comprehensive and resulted in a sense of
frustration and confusion from the local business owner.
2.87
Mitchell Shire Council further expressed support for a recommendation
from the first interim report of the committee, specifically:
Recommendation 4 3.21 The committee recommends that Defence
review Defgram 218/2017 to clarify or issue supplementary guidance to staff
that local purchases outside the Standing Offer Panel is also encouraged as
required.[98]
2.88
Mr Craig Patterson, Acting Director General Capital Facilities and
Infrastructure, told the committee about pilot projects that are currently
being undertaken by Defence. As highlighted in chapter 1, the Explosive Ordnance
Logistics Reform Program is one of the pilot projects requiring potential
contractors to develop a local industry capability plan to encourage
contractors to actively seek out the capability of local markets. This
information will be provided to Defence as part of their tender submission.[99]
Reporting local expenditure
2.89
Mitchell Shire Council also recommended:
...regularly reporting on the value of Defence expenditure on
locally sourced goods and services – both directly and through contractor/sub-contractor
arrangements, to provide a transparent and trackable account of the benefits
accruing to local businesses.[100]
2.90
Mr Cheal asserted this:
...would give everybody a clear metric to look at and see how
well the base is doing at procuring locally. It would give the local businesses
a target to look at each year and try to exceed, because it is also up to local
businesses to put in bids.[101]
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