Break the clearance circularity that keeps small firms out of defence
A firm needs cleared people to win classified work and needs the work to justify clearing people. The vetting standard is not the problem. Its position in the sequence is.
Steps this would change
Rationale
The SME entry process runs 810 days on the critical path before a firm can commence classified work, and the shape of it is a loop.
To hold DISP membership at a useful level a firm needs cleared personnel. To justify the cost of cleared personnel — five months of NV2 vetting, facility accreditation, ICT certification, a security officer, and the consultants to document it all — a firm needs a contract. To win the contract it needs the membership.
None of the individual steps is unreasonable. Vetting is a genuine judgement about a specific person and nothing here asks for it to be shallower. DISP requirements protect real information. The foreign ownership test is a national security judgement this database has no business second-guessing.
The circularity is a product of ordering, and it selects on balance sheet rather than on capability. A firm that can carry a year of costs against a possible contract gets in. A firm that cannot, does not — regardless of whether its technology is better. Given that sovereign industrial capability and a broader supplier base are stated objectives of the National Defence Strategy, that is a selection mechanism working directly against the policy.
Two changes, neither of which touches the standard:
- Sponsor a clearance pool ahead of contract. Defence funds and sponsors vetting for a defined number of industry personnel in priority capability areas, before any specific contract exists. The clearance attaches to the person and is portable. Firms tendering can then draw on cleared people instead of having to create them.
- Let DISP assessment run concurrently with vetting rather than after it. The published DISP timeframe assumes the applicant already holds the required clearances. Assessing the organisational controls while personnel vetting proceeds would overlap two steps that examine entirely different things — one a company's systems, the other an individual's history.
Who acts: Defence alone. No legislation, no other jurisdiction, no international agreement.
What is being traded away
Sponsoring clearances speculatively wastes them. A cleared person whose firm never wins work, or who leaves the sector, represents public money spent on an asset nobody used. Vetting capacity is the binding constraint — the reported backlog, the $130 million myClearance system that required manual workarounds, staff redeployed to process clearances by hand — and spending scarce capacity on speculative clearances means spending it instead of on people with contracted work. That is the objection that would sink this in the department, and it is a fair one. The proposal is only defensible if vetting throughput is increased first, which is a resourcing decision that no procedural reform substitutes for.
Selecting the pool is a new discretion, and a valuable one. Whoever decides which firms and which individuals get sponsored clearances is allocating a scarce and commercially decisive benefit. That is precisely the kind of discretionary gateway this site objects to in housing, and consistency requires objecting to it here too. Published criteria and a published list of who received sponsorship would be the minimum.
Concurrency has a real failure mode. DISP assessment assumes cleared personnel because the organisational controls are partly about those people — who the security officer is, who has access. Assessing in parallel means assessing a partly hypothetical organisation, and re-doing work when a nominated individual fails vetting. That is wasted assessor time in a function that is already behind.
And the limit of the claim. Nothing here would make Australia's defence acquisition faster. The major acquisition process models at more than fifteen years, of which the approval gates are about 10 per cent and this reform touches none of them. This is a proposal about who gets to compete, not about how quickly anything gets bought.
Precedent
Defence already sponsors clearances ahead of specific contracted need for its own workforce and for priority programs. The question is whether that can be extended to a defined pool of industry applicants.
Sources
- AGSVA, published performance information: NV1 approximately 3 months, NV2 approximately 5 months
- Department of Defence, published DISP timeframes: 2-3 months Entry Level, 4-6 months Levels 1 to 3, assuming clearances already held
- ANAO, Defence's Procurement and Implementation of the myClearance System
- ABC News, reporting on the Defence security clearance backlog, 31 March 2023