Defence Industry Insights – Innovation in Defence – part 2
[Music] i do welcome everyone and thank you for being here today i'll start with jenny elgahri who is the assistant director of assessments and operations at the defence innovation hub and jenny i was wondering if you could give an overview of the defense innovation hubs assessment process yes uh thank you amanda and good morning everyone the defence innovation hub applies a competitive two-stage assessment process to all proposals at each stage proposals undergo a technical assessment and are reviewed by specialists within defence including capability managers the first stage of the process the call for submissions or cfs stage companies submit an overview of their proposal including a description of the technology how is it unique and also how your idea would contribute to defence capability and australian industry we're trying to understand in this stage what is the technology how is it innovative and what makes it unique compared to other technologies available on the market it can take around three months to assess a cfs shorter the proposal is clearly articulated and clearly explains the technologies and its potential benefits some proposals take longer particularly if we're consulting more broadly within defence if successful proposal moves to the second stage to the request for a proposal or rfp stage at the rfp stage you provide more detail on your idea and the proposal undergoes a more rigorous assessment the information we we seek from you at the rfp stage includes detailed information about your company about your idea including justification for how the innovation potentially aligns with defence capability needs and contribution that all make to australian industry we're also after how you plan to deliver the project timelines and estimated costs for the defense innovation hub to invest proposals need to represent a genuine innovation and have an identified defense application that is of interest to capability managers to help us make investment decisions we engage and seek advice from across defence it's not done in isolation our assessments and decisions are informed by specialists it might take around four to five months to for a successful proposal to move through the rfp phase stage and into contract negotiations or what we call contract clarifications as alison mentioned at the beginning the defense innovation hub is a procurement program and the length of time it takes us to assess proposals particularly rfps is reflective of this it's reflective of the level of consultation we do within defense as well as the rigorous nature of our decision-making process our processing time frames for both the cfs and the rfp stages have fallen over time and we have an ongoing continuous improvement program focused on streamlining our processes where we can and you should be seeing the results of this continuous improvement program this calendar year thank you amanda brilliant and i'm going to follow up on that one could you give some tips perhaps to the startups and the smes on how they could better pitch their proposals for a greater chance of success yeah that's a good question amanda um before i share some tips i'd like to share some common reasons proposals are unsuccessful uh because that might be useful to understand that context so they include the technology is fully mature so it's a commercially available product the technology is very immature so it's not ready for engineering yet the innovation is not considered feasible and that could be either in terms of the technology itself the execution of the scope of work or cannot be easily integrated into defense platforms the innovation doesn't align with the capability requirement or need and the proposal does not represent a significant contribution to australian industries so there might be a significant portion of the work being undertaken overseas for example um and also the innovation is not considered unique or does not offer benefits over existing disability so they're the common proposals are unsuccessful um another important thing i think to keep in mind is that don't assume the assessor is familiar with your project or your technology and how it aligns with defense requirements so make sure you include information so we can understand to help us understand your technology and your idea in terms of tips what we find helpful is when companies clearly articulate the benefits of the technology over what is currently available in the market and so what makes your your technology unique uh what's what's the innovation what's the benefit um use it evidence to demonstrate um the value that's um that's useful also identifying the support that uh that you need from defense in order to develop your technology and so for example testing facilities or equipment and it's also helpful when companies focus on the proposed phase of the project and explain in detail the work that's going to be conducted in that phase so don't try and span multiple phases in the same project because that can complicate the assessment hopefully that's helpful amanda that's brilliant and thank you so much for that insight i'm sure a lot of companies will find it useful moving right along next up we have martin de cruz martin is the director of commercial management and procurement with the defence innovation hub and i was wondering martin could you give us an overview of the innovation contract once signed sure thank you amanda for that question and g'day everyone once a proposal has been assessed at the rfb stage it then goes to the hub investment advisory group for an investment decision the hub investment advisory group is represented by senior stakeholders across defence and proposals that are unsuccessful will be notified accordingly and the ones that are endorsed then come across to my team for a period of detail clarifications and contract negotiations typically this process takes a few weeks or a few months depending on the completeness and compliance of the tender documents that have been submitted to defense and also uh depending on the complexity and uh the risks associated uh with the proposal itself some of the specific issues that need to be resolved include the need for defense to provide certain items or equipment we call them defense items uh there are other uh requirements for access to uh defense premises uh a need to consider specific security requirements also uh other commercial issues and financial issues that frequently arise are in relation to uh the pricing details intellectual property insurance and indemnity i'll now summarize some of the key features of the defense innovation contract the hub acknowledges industry as a fundamental input to capability and has tailored the innovation contract to be simplified and specifically to facilitate the development of innovation uh innovative technology what this means is that there is a fundamental difference between the innovation contract and what is known as the as defcon suite of templates that are used in traditional procurements to acquire or sustain defense equipment the innovation contract is designed deliberately to incentivize industry to showcase their innovative technology and develop this to benefit the australian defense force or adf and in the process to develop capability and capacity within australian industry another way that the innovation contract is fundamentally different is that the hub acknowledges that innovation is inherently a risky business and therefore the hub has a higher risk appetite and accepts risk sharing we do this by not requiring a hard obligation to deliver the technology instead it's a best endeavors obligation this means that we acknowledge sometimes um despite the best endeavors of the supplier there may be some insurmountable obstacles that are faced uh which may prevent the contract being delivered or the technology being delivered developed as described in the contract and defense will not penalize industry by pursuing its rights for breach of contract another way that we have a higher risk appetite is that there are no liquidated liquidated damages provisions in the contract there are no onerous insurance or indemnity requirements as well what i would also want to emphasize as a key feature of the innovation contract is that collaboration and cooperation is at the very heart of the innovation contract what this requires is when the supplier encounters some difficulties in developing the technology that both parties um undertake problem solving in good faith and follow um a series of steps as outlined in the contract um and and pro problem solving in itself is a collaborative process as described in the standard terms of the innovation contract the next key feature of the innovation contract is in relation to the intellectual property and and technical data provisions i'll refer to them as ipntd the hubs default position for ownership of ip that is developed during the innovation contract is that the supplier will own that ip and i'll touch on ip in in detail a little later if if that is appropriate another key feature of the innovation contract is that it is a cost reimbursement contract what we mean by that is it funds the defense department funds allowable and reasonable costs that are directly linked to the research and development activities to develop and deliver the technology to defense it does not include indirect overheads or profits the supply owns the ip defense funds these r d activities and we hope that this will assist the supplier to gain benefits and protect its investment in that technology development the last important feature of the innovation contract is that should there be merit in the technology that is delivered to defense defense may request the supplier to submit a further proposal to develop the technology to a higher technology readiness level brilliant thanks so much for that detail and i'm sure we'll get more questions about ip down the track so i'll throw to tim um tim is our lead technical assessor with the defense innovation hub and tim can you explain please for our audience what's involved in a technical assessment and what would you be looking for thanks amanda morning everyone um so as we've heard previously from jenny and martin uh it's a two-stage process so call for submission and request for a proposal what i'll do is just walk briefly through the assessment criteria for both so when it comes to call for submission there are sort of four criteria i'll walk through each one slowly suitability is the first one we're looking for suitability is made up of two different facets from our point of view uniqueness so what makes your technology your innovation unique have you articulated that clearly to us and have you explained why it's unique compared to products on the market secondly does it align to a capability requirement and need have you taken the time to talk to defense talk to capability managers talk to cdic about how your innovation how your technology may align to a defense requirement and need and have you articulated that clearly within your documentation to us secondly there's feasibility and this is made up of four sub sections of criteria so that is the technical credibility which looks at what evidence have you got to prove that the work you've done today is technically credible how is it that you're going to prove that you can develop this innovation this technology to get the capability enhancement that you've promised defense or your offering to defence secondly is schedule so have you been realistic in the amount of time you've given yourself to develop this technology and this will come into you know looking at trl level so technology readiness levels so have you given yourself a year to develop your technology readiness level from one to seven that would be unrealistic from our point of view and you know you need to be realistic and be honest with us and say we think it's going to take us one two three four years to get this up the technology readiness level scale to be able to deliver a capability defense thirdly is defense ability to support within feasibility so what do you need from defense to be able to help you deliver that innovation are you going to need you know defense items such as a collins class submarine a warship to prove your your technology those sorts of things come into consideration here you know and it depends on the phase that you're aiming for within the defense innovation hub but we take that sort of thing into account and how much support you're going to need in delivering your innovation to us fourthly in feasibility it's the defense ability to adopt so how are you going to help defense adopt this capability into its mainstream equipment how can uh army navy air force um adopt this technology as easily as possible based on the steps you've taken to you know meet regulatory requirements meet um licensing requirements for that technology to be used um after feasibility then we then look at timeliness so timeliness although it sounds like we're talking about schedule we're actually talking more about the capability need window the capability requirement window so as you'll see in all of the resources pointed out by allison there will be lots of programmes of work mentioned in there about how defense are investing their money so what we need is you to do some homework and look at how you're aligning your technology to some of those capability needs and requirement windows and those time frames over a number of years and saying how you're targeting your technology towards some of those needs and fourth in a cfs stage is the contribution to australia's defence industry capability and there's two subsets to that so capacity and capability so capacity would be how much of your work is being undertaken within australia uh we look at that in sort of percentage terms so are you doing 50 in australia 95 in australia and that will bear a a large bearing on how we view that innovation and in capability so are you developing any new skills within australia and in defence industry they're in short supply so you know we can see in the engineering realm that ai and machine learning say for example is a very new and burgeoning technology are you developing skills in that area that maybe defense don't have a lot of experience of and they need that will also play a part in whether you're contribut contributing to australia's defense industry capability so those are the four criteria for a call for submission then we go on to the request for proposal so again the four criteria that i've already talked about form part of the request for proposal stage as well so we take our learning from your cfs stage and we move it into the request for proposal stage we also then add a fifth criteria and a six criteria onto the request for proposal stage so we look at your organizational capability and capacity so what is your commitment to the innovation are you trying to shift risk from developing the innovation technology onto defence wholly or are you willing to share that risk as martin's taught previously it's a risk sharing exercise and we're willing to take some of that risk but we need to see that you've thought about what those risks are and you've explained how you plan on mitigating them in collaboration with defense have you got a track record of previous performance if you have tell us about it tell us how well you've done tell us some of the things you've overcome in the past some of the challenges you've overcome to get to where you have give us some evidence to prove that you've delivered in the past either to defence or in commercial industry both apply have you got a project management capability or you know a delivery capability and again that's linked to your previous performance one of the documents we ask for a request for proposal stage is a project execution plan so what we look for there is how you're practically going to deliver this innovation to defence what procedures and processes does your business have to be able to ensure that we can have confidence in the way that you're going to deliver this and you can deliver this as you say you have in time in time with budget schedule and you know limiting risk as much as possible and that's the fifth criteria finally we look at cost and we look at this from a whole value for money point of view from a technical understanding we look at what the reasonableness of the costs so have you put in enough resource have you put your rates at a reasonable uh level of effort um what level of effort have you assigned to the activities in your work breakdown structure do we think they're reasonable to be able to deliver the technology readiness level development that you've talked about and what have you put in in terms of budgets for materials and other non-labor costs and are they wholly applicable to the innovation if they're not then you know apportion those costs to say you're going to get benefit from them in the future be honest with us be open with us so we can make a fair assessment on what your innovation and what your costs will be and then we'll take a whole capability point of view or whether that's value for money for defence brilliant thank you so much tim for that level of detail i'm sure a lot of people will find that valuable moving right along to one of my colleagues greg celerti who is one of the cdic's defence business advisors and he'll explain how we can help your business collaborate with defence and what opportunities are available to you and greg could i ask you to start by introducing yourself please sure good morning everyone um i'm the city ics business advisor for commercialisation and innovation uh i'm based in perth however i've got a roving role working with my facilitator and advisor colleagues around australia showing my age a bit i've worked in this defence sector now for just 30 years i've worked in commercial and general management roles for defence primes for startups for smes and i've raised capital and commercialized dual use and defense technology in australia and overseas so most of the advice that i'm providing to companies is actually based on my own experiences over the 30 years and that's the very much the same with the whole advisor and facilitator cohort around australia brilliant greg moving on what business assistance and collaboration opportunities are available sure um look what i might do is talk i'll answer that question in the context of my role so rather than covering the actual grants assistance for example in today's discussion uh i'll just talk about i guess the the hands-on innovation component so look most of our assistant starts with a phone call or a meeting there's so much knowledge in the team and as if you think about what tim just described as the assessment criteria much of our initial work with companies is is is preparing you for that uh for that journey of your cfs submission um so much of that work also starts before you've even written a single word on a an innovation submission so we uh we help you understand your technology um or to describe your technology technology to find the problem owner uh innovation is not much use if uh if it doesn't have a potential owner and we take you through a lot of teaming discussions um not a lot of innovation uh occurs as a simple point solution um and we we also help you define the incremental development effect that you are going to need to describe to defence that can be very hard for companies so i would say that's one of the most useful initial conversations is that that incremental development discussion um collaboration opportunities there are a lot not you know i guess we're doing a lot of dating agency effort in our discussions with companies and we set up a lot of friend or foe meetings that are in fact collaboration discussion we encourage you to prepare discussion papers and technical white papers that can describe your technology and that's really useful for us to help you describe what you do to potential partners and also to potential capability sponsors and as i said before most successful hub contracts have element uh have collaboration elements uh it's only natural that they do fantastic so moving on how would you advise businesses to determine if their business is a good fit to supply innovation into defence sure um look the key thing there is that i i actually think the first question you should be asking is is about the innovation itself and not whether you're a good fit along the journey we'll help you figure out whether you're a good fit but in the context of today's discussion um concentrate on the innovation itself we also can help you figure out whether you know there are commercialization pathways for you and again that will help you figure out whether you are the right fit for this sector fantastic and finally greg what advice do you give as being the key considerations for businesses entering into international partnerships sure um look there's a lot a lot of uh a lot of content in in that question but look my main this my main uh sort of uh bits of advice there would be understand who you really are collaborating with in overseas opportunities follow the funding uh and the ownership trail so that you really know who you're dealing with uh understand the legal jurisdiction issues that you're faced with uh what commercial agreements look like in those international collaborations and importantly can you protect your ip in those markets think very carefully about whether international partnerships improve or hinder your relationship with your current defense client and are there any itar or export control considerations lots of those questions you can discuss with your cdrc advisor or facilitator and look also understand the cultural nuances of dealing in those markets language business practice etiquette politics food drink and as we discussed yesterday amanda karaoke skills is your voice good enough to survive under pressure um again the the the key theme my answers is these are discussions that you can have with ceic advisors and facilitators so reach out to us um anytime thanks greg some karaoke nights should best be left forgotten but thank you [Music] you
2020-12-25 09:49
