The Western Australian-based Henderson Alliance has stressed the need for extra policy decisions from the federal government to ensure local content is maximised in upcoming shipbuilding projects.
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The Alliance, made up of 26 members and a further 44 contributing firms, has said it is looking to the government to tighten up on local content policies for work on shipbuilding projects like the Offshore Patrol Vessels (OPV) SEA 1180 project which will see two OPVs constructed in Adelaide and the remainder in Henderson.
Manager of strategic partnership with IKAD Engineering and key spokesperson for the Henderson Alliance Darryl Hockey told Defence Connect: "We know the government is trying to enrich the whole industry ecosystem from its continuous local build strategy – and we strongly support them — however extra policy decisions will need to be made before the prime contracts are awarded to ensure local content is truly extended beyond the realm of the major partners."
Hockey said members of the Alliance are concerned with how the prime contractor, which is yet to be decided, could potentially model their supply chain.
"Our biggest concern is the partners may choose to utilise a vertically integrated model and therefore perform most works in-house. While this could technically meet the local content threshold under current guidelines, the benefits would be permanently locked away inside these sole operations with most local SMEs missing out altogether. This would be a truly sad economic and social outcome."
Hockey said IKAD Engineering and other members of the Alliance will continue to work with the government and industry in hopes of securing the best outcome for the industry and Australia.
"The point is the community has an expectation SMEs will get a fair slice of the pie, so we believe the government’s local content policies and guidelines will need to be tightened to ensure this occurs and in turn the best outcomes are secured for the Australian community. We will therefore work constructively with both government and industry to get the balance right.
Currently companies that are members of the alliance include Host Group, IKAD Engineering, L2S Engineering, Marine Construction Services, Marine Inspection Service, Marine Technicians Australia, Mackenzie Marine and Towage, PMC Group, Pozztech, Weldtech, C&J Rigging, Heat Exchangers WA, Kulin Group, PQR Quality Solutions, Subcon and Watmarine Engineering Services.
The alliance aims to provide a voice to industry and government for SMEs in defence, provide a platform for SMEs to form partnerships to allow participation in larger scale projects, and to create a forum for networking, mutual support and innovation.