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The 2026 Defence Industry Development Strategy directs Defence to adopt minimum viable contracting proportionate to each procurement’s priority, size, complexity and risk. It focuses effort on the artefacts and requirements essential to capability delivery, without removing accountability or reducing standards.

The Strategy describes modular and flexible structures, targeted information requests, early and ongoing industry engagement, adaptable scope, greater attention to high technical, commercial and delivery risks, and reduced administrative burden from contractual flow-downs.

That boundary matters. Simplification is useful where it preserves the decisions, controls and evidence needed to deliver capability. Moving ambiguity, unpriced exposure or immature scope into contract management is not simplification.

Start with the decisions the procurement must support

Begin with the decisions the Commonwealth and industry must make, and the evidence each decision requires.

For the Commonwealth, this usually includes whether the requirement is understood, the market can respond, risk allocation is workable, value for money can be demonstrated and delivery can be governed with available people and systems.

For industry, it includes whether a supplier can define a compliant solution, understand interfaces and dependencies, price the exposure, secure supply chains and accept the proposed performance regime.

Material should be removed only where its purpose is met elsewhere. Proportionality is a reasoned match between process and exposure, not an absence of process. The Commonwealth Procurement Rules retain value for money as the core rule and require procurement activity to be commensurate with the scale and scope of the requirement.

Design risk allocation as a system

ASDEFCON provides a suite of templates and guidance, not a substitute for acquisition strategy. The template and tailoring choices must follow the requirement and its exposure.

Within the contract, liability, indemnities, insurance, acceptance, defects, liquidated damages, securities and termination provisions interact. Defence’s Liability Risk Management guidance sets out a structured approach to allocation, insurance and loss exposure.

  • A broad transfer of liability may increase price, reduce competition or create exposure a contractor cannot control.
  • A liability cap may be reasonable but inadequate if performance and acceptance settings do not identify failure early.
  • Insurance mitigates financial consequence; it does not manage delivery performance.

Document length is not the useful measure. The question is whether the contract provides a coherent basis for managing delivery risk.

Build anticipated change into the contract

Continuous capability development recognises that requirements, technology and operating context change. A workable contract should anticipate that change:

  • define the minimum capability and acceptance authority;
  • structure work in increments with clear entry and exit criteria;
  • identify the baseline for each increment;
  • define how priorities may change;
  • set pricing and evidence requirements for additional work;
  • specify verification, validation and test requirements;
  • secure the data and technical-data rights needed for integration and future competition; and
  • define pause, redirect and exit conditions.

Without those settings, flexibility becomes a sequence of urgent variations. Finance’s Contract Variations guidance cautions against changes that significantly alter the underlying contract or scope where other suppliers may have responded differently or value for money may be compromised; a significant scope change may require a new procurement. That page records guidance being updated and should be checked before use.

Make governance executable

Governance should support decisions, not replicate reporting. An executable model answers:

  1. Who owns the outcome?
  2. Who can direct, approve, accept, vary and spend?
  3. What information is required before each decision?
  4. When must issues escalate?
  5. How are the decision and rationale recorded?

Meeting cadence should follow delivery risk. Strategic forums decide reserved matters—risk acceptance, major commercial levers, re-baselining and escalation—not routine status.

Official Defence material states that the Defence Delivery Group was established within the Department of Defence on 1 July 2026 for a one-year transition, and that the Defence Delivery Agency is to be established as an executive agency on 1 July 2027. The reform design is intended to clarify accountability and strengthen decision-making, governance and assurance. Those are intended outcomes, not demonstrated results. Projects should confirm that delegations, records and escalation paths remain clear through the transition.

Preserve the value-for-money record

A faster process still requires a clear record of what was decided and why. At minimum, it should address:

  • the requirement and acquisition strategy;
  • market engagement;
  • material risks and their allocation;
  • the evaluation basis;
  • negotiation authority and outcomes;
  • affordability and whole-of-life considerations; and
  • why the selected approach represents value for money.

In its 30 March 2026 audit of LAND 400 Phase 3, the ANAO concluded that Defence’s procurement had been partly effective. It reported that inconsistent treatment of tendered prices and risk reduced the transparency and defensibility of the value-for-money assessment, and that waivers and remediation obscured underlying schedule pressure.

Those findings concern that procurement and period. They demonstrate why acquisition strategy, contract settings and delivery controls need to remain connected after source selection; they are not findings about every Defence procurement.

Decision tool: a pre-release test

Before an approach to market, a project adopting minimum viable contracting should be able to answer:

  • What has been removed, and why does it not support a material decision, control or record?
  • Which risks most affect capability, schedule or whole-of-life cost?
  • Where is each risk controlled—scope, design, contract, governance or assurance?
  • What must be true before the first deliverable is accepted?
  • How will change be authorised, priced and incorporated into the baseline?
  • Which decisions are reserved to the Commonwealth?
  • What data will show whether the contract is delivering the required outcome?
  • Can the Commonwealth transition, compete or exit without losing essential technical knowledge?

Clear answers support proportionate procurement. If they are not available, removing artefacts is likely to defer work into delivery, where change is harder and more expensive.