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UK juggernaut QinetiQ stalks Australian defence bureaucracy using first principles review

Company whittled 11,000 civil servants to 5000. Now it's hunting for parts of Australia's Defence Department.

A massive British company which first employed 11,000 civil servants and then slashed 6000 of those jobs is now stalking Australia's defence bureaucracy. 

QinetiQ has previously come under fire in the UK for trying to slash redundancy payouts for former civil servants it has employed and for its role in an air disaster which killed 14 people. 

QinetiQ was formed when most of the UK's Defence Evaluation and Research Agency was privatised in 2001.

The company is now using Defence Minister David Johnston's first principles review into the bureaucracy to tout for more business in Australia.

As reported last week, international defence giant BAE Systems used its submission to slam the inefficiency of Australian public servants in defence and public servants feared the review would end in widespread outsourcing.

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BAE Systems - which labelled parts of Australia's Defence bureaucracy as "ill equipped" in its submission - and QinetiQ were partly responsible for the UK's Nimrod air disaster which killed 14 crew in Afghanistan in 2006

The final air crash report in 2009 found BAE Systems was substantially responsible. It gave a misleading impression to the Ministry of Defence and QinetiQ about the assessment of a hot air piping system which caused a fire during the fateful Nimrod flight. 

For its part, QinetiQ failed to carry out its role properly as an independent adviser by not checking BAE Systems' conclusions. 

QinetiQ's submission to the first principles review suggested it would be capable of taking on a range of new jobs, including project cost analysis and managing maritime signatures. 

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QinetiQ said "non-Defence" clients should also be allowed to use the Woomera weapons testing range. QinetiQ currently provides safety services for the range. 

When the Commission of Audit earlier this year argued the possibility of the Defence Science and Technology Organisation being outsourced it drew a direct comparison with the successful creation of QinetiQ.

But in its submission QinetiQ suggested the commission's vision was not bold enough.

"A genuine apples‐apples comparison would need to encompass all the agencies delivering research and development and test and evaluation services including those resident in the uniformed services and (Defence Materiel Organisation) as well as agencies such as the Defence Materials Technology Centre, the Rapid Prototyping, Development and Evaluation Program, the Defence Industry Innovation Centre and those elements of defence-funded research and development carried out by the CSIRO.  

"The very diversity of these organisations indicates that Defence has already set out on the path to commercialisation, but has not yet necessarily been able to unlock some of the commercial benefits in doing so."  

During the creation of QinetiQ in 2001, sensitive aspects of the Defence Evaluation and Research Agency were retained in public ownership in what became the Defence Science and Technology Laboratories.

The privatisation process saw the wholesale transfer of the civil service workforce, along with their terms and conditions of service across to QinetiQ.

Its first principles submission said "while our headcount has reduced from around 11,000 at privatisation to 5000 today, we continue to deliver the same level of output, largely through improved efficiency".

The UK's national audit office found the creation of QinetiQ safeguarded a business of national importance but said more money should have been secured for the public purse during the privatisation.

It also said too much money was made by ex-civil servants who ended up managing the newly private firm. The value of shares given to them "exceeded what was necessary to incentivise management".

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