In the wake of Queensland’s Laserdyne winning a multimillion-dollar contract with Thales Netherlands through the global supply chain (GSC) network this week, many SMEs and local operators may be left wondering how they themselves can get a slice of the action. For those companies, a proper understanding of the GSC track record is invaluable – while history doesn't repeat itself, it is too often said to rhyme.
Since 2007, eight prime contractors participating in the GSC program have dished out over $1 billion of work, mostly directed to Aussie SMEs and local operators. The deals made out have been ambitious – most recently, the Laserdyne contract will see their range finder product integrated into the MIRADOR Mk2 electro-optical multisensor suite. According to Thales, this system is in use by 10 navies worldwide. If the old adage about 'small poppy syndrome' is true, it has certainly never applied to the Australian defence industry.
Another example of Australian industry leveraging the GSC network came in July of last year, when Thales and Micro-X signed a $10 million agreement to invest in the development of ultra-miniature x-ray systems. The deal allowed Thales to license Micro-X’s technology in three-dimensional X-ray imaging to develop high-speed airport checkpoint security system. The project was similarly ambitious in scope, seeking to reduce processing capacity from 200 per hour to potentially more than 1,000 per hour.
Though the last example may be somewhat ironic given current circumstances surrounding the air travel industry, it does show the potential for Aussie SMEs to get involved with large scale, cutting-edge projects ideas through the network. If leveraged properly, the sky is truly the limit with the GSC. Other examples include:
- South Australian company Airspeed, which signed a contract with Thales Australia for the design and manufacture of key components for next-generation sonar systems.
- Victoria's Cablex, which won a bid to manufacture and supply electrical harnesses and bays for ARH Tiger and NH90 helicopters.
- Brisbane-based Ferra Engineering, which has been contracted to manufacture sub-assemblies for the German-assembled Phoenice platform, Thales’ tactical navigation radar system for submarines.
Though it is hard to immediately identify a common theme that draws these projects together (aside from the sheer scope of ambition and talent), these contracts all play into the doctrine of interoperability, which has taken on an increasingly important role in recent years – largely, though not solely, due to the integrated nature of coalition efforts in the Middle East. The ARH Tiger, for example, is deployed in various capacities by German, Australian, French and Spanish militaries. Strange bedfellows? Perhaps not in the current era.
In partnering with the GSC program, prime contractors commit to establishing "GSC offices" to "identify, assess, qualify and assist Australian companies for export opportunities as well as provide regular updates on new capabilities required". Though these branches carry out this task vigorously, it is all too easy for them to oversee or miss out on the smaller of Australian supply-side businesses – who, in equal measure, are likely too time-poor to stay abreast of developments in this space and proactively monitor ongoing GSC opportunities. An understanding of modern interoperability does, however, go a long way in this regard, and helps smaller SME directors to know where they may get a chance to "sell themselves" to prime contractors.
The parliamentary joint committee on foreign affairs, defence and trade defined 'interoperability' as:
The ability of different forces to operate safely and effectively together in joint or combined operations. It can be challenging for the forces of different nations to achieve desired levels of interoperability. Interoperability is not only a potential obstacle between the forces of different nations but can also be problematic for the individual services of the same nation operating together.
The committee expounded upon the doctrine at length, and attributed a significant degree of operational efficiency in Afghanistan and Iraq to the idea. In one particularly cutting submission, the RSL commented that "if you do not have interoperability, you are leaving yourself wide open for fratricide – being hit by friendly fire".
At an industry level, however, interoperability is all too often talked about as if it is merely limited to equipment and capability. However, the full scope of the doctrine actually extends to:
In the high-tech modern battlefield, interoperability in terms of communications and logistics are just as important as hardware interoperability, if not even more so. Operating in an insurgency and/or advisory role as we have done in Afghanistan, these capabilities form the crux of daily operations, and can spell the difference between life and death. At home, industry players both big and small would do well to stay mindful of this concept – particularly those who operate in the software or electronics spaces.
Major General Edward Dorman, Combatant Command Director for Logistics and Engineering at US Central Command, recently wrote on the importance of strategic logistics. “Nothing creates the flexibility for deterrent options and decision space," he reasoned, "more than national logistics that are underpinned by a vibrant, thriving economy that in turn is linked to partners and allies.”
Australian industry will have opportunities to integrate key communications and data link requirements that co-operate with other government agencies and all air and amphibious systems. We were told this in the previous Defence Industrial Plan; it has certainly also been the lived experience in the last few years. As information technology continues to make quantum leaps forward in the years and decades to come, opportunities for small defence, defence-adjacent, and civilian businesses to get involved will continue to arise. Interoperability has been advocated for in a command and control capacity, all the way down to sensors, advanced weaponry, and computing and intelligence (C4I) systems.
Though the US appears to be taking steps to counter foreign investment in its defence industry, the US-Australia bond will continue to act as a catalyst for GSC contracting. In the age of interoperability, the time is ripe to seek out these opportunities.