Boeing Promotes Australian Suppliers in U.S.
By Gregor Ferguson
Sydney ? Boeing?s Integrated Defense Systems sector has opened a two-man office to help Australian companies compete for contracts to supply components and services to Boeing and its American subcontractors.
To be located in Kent, Wash., the Office of Australian Industry Capability (OAIC) will work with the Australian Department of Defence?s Canberra-based procurement agency, the Defence Materiel Organisation (DMO), to spot potential work in civil and military programs for qualified Australian defense and aerospace companies.
?The OAIC is scheduled initially to run for two years,? said office chief Joel Gray, Australia/New Zealand Industrial Participation manager for Boeing Integrated Defense Systems. ?However, we would hope to continue beyond that should the office prove to be successful.?
Boeing created the office in response to the Australian government?s March 2007 Defence and Industry Policy Statement, which aimed to nurture a commercially sustainable domestic defense industry that can support the Australian Defence Force.
That will require creating more opportunities for Australian companies locally and overseas, said Dominic Zaal, who directs the DMO?s Industry Capability Branch.
It also means ending the inefficient industrial offsets that accompanied major Australian defense purchases, he said.
The policy said that industrial offsets ? in which a prime contractor places a parcel of work in a customer?s country to offset the cost of new defense equipment ? rarely deliver long-term value and don?t create internationally competitive industries. They can also drive up the cost of equipment by introducing inefficiencies in production and assembly, the policy said.
Also, Australia?s project-by-project acquisition approach doesn?t always deliver local industry opportunities and benefits in a coherent and efficient way, Zaal said.
Under the DMO?s new approach, the prime contractors for Australian defense programs will develop an Australian Industry Capability plan that spells out opportunities for local companies in Australia and overseas, Zaal said. This is intended to strengthen Australia?s industry base without requiring the military and Australian taxpayers to pay a premium for local industry content, except in a few areas of strategic importance.
Boeing is the first foreign prime contractor to respond directly to this new policy, though EADS opened a similar office in Munich last year as part of its successful bid to supply 46 NH90 helicopters to the Australian Defence Forces for about 4 billion Australian dollars ($3.5 billion).
The military plans to spend more than 10 billion Australian dollars acquiring products and services from Boeing over the next few years, including Wedgetail early warning aircraft, C-17 Globemaster III airlifters and F/A-18F Super Hornet fighters.
The OAIC will help Australian companies identify subcontractor and supplier opportunities across Boeing?s civil and military businesses, and not just in areas where the Defence Forces is buying equipment.
Both Zaal and Boeing?s Gray said Australian companies will win contracts only if they are competitive and offer value for money.
?This is all about creating opportunities, and winning business on a best-value basis in open and transparent business dealings,? Zaal said.
Potential opportunities accessible through the OAIC could run into tens of millions of Australian dollars, he estimated.
A team from Boeing IDS visited Australia in early December to meet and interview 20 local companies. These firms were successful Joint Strike Fighter (JSF) contractors such as Melbourne-based Production Parts, GKN Aerospace Engineering Services and Marand Precision Engineering, firms that understand the demands of the U.S. defense market, and have security clearances and experience with the U.S. International Traffic in Arms Regulations regime, Zaal said.
Later in December, Boeing signed a contract worth about 2 million Australian dollars with an undisclosed small or medium-sized firm in Melbourne.
Further requests for proposals are expected to be issued to local firms this month, Zaal said.
The OAIC approach is based on DMO?s successful Team Australia strategy developed for the JSF program.
Marand?s managing director, Tony Ellul, said the OAIC proposal builds on Lockheed Martin?s JSF global supply chain initiative.
?JSF is program-specific; this [the OAIC] is right across the Boeing production plan, except for some [sensitive] defense programs, of course,? he said. ?We?re hoping that something very positive will come out of it.?
Marand has won several contracts to provide automated manufacturing and assembly tooling for the F-35 JSF. ?
E-mail:
gferguson@defensenews.com.
