Australia sets up dedicated agency to streamline defense procurement

December 2, 2025, by Fatima Bahtić

The Australian Government has announced sweeping reforms to the country’s defense procurement framework, establishing a new Defence Delivery Agency to streamline capability acquisition and sustainment and improve accountability across major projects.

As disclosed, the new agency will consolidate three existing capability delivery organizations, the Capability Acquisition and Sustainment Group, the Guided Weapons and Explosive Ordnance Group, and the Naval Shipbuilding and Sustainment Group, into a single body that reports directly to ministers. It will operate with its own budget authority, allowing for a more coordinated approach to complex military programs and a stronger sovereign defense industrial base.

A National Armaments Director will be appointed to lead the agency and advise the government on acquisition strategies and project delivery once programs receive approval.

The role is intended to strengthen oversight, improve cost accuracy, and ensure clearer accountability as defense spending continues to grow.

At the same time, the Department of Defense will centralize its capability development functions to improve prioritization, speed up decision-making, and ensure new proposals align with the integrated force design outlined in the National Defense Strategy.

Deputy Prime Minister Richard Marles said the structural overhaul was necessary as Australia undertakes the largest peacetime defense investment in its history.

“As the Albanese Government makes the biggest ever peacetime investment in Defence, it is important that we put in place the structures and systems to ensure Australia’s Defence Force can deliver the capabilities we need at speed and within budget,” he said.

Defense Industry Minister Pat Conroy noted that the growing complexity of modern military systems requires a fundamental rethink of how capabilities are developed and delivered. He said the reforms will help build a more resilient and innovative industrial base while creating greater opportunities for Australian businesses to support national security.

Work on designing the new agency and consulting with industry stakeholders will begin immediately, with the government emphasizing the need for improved project management, stronger cost assurance, and greater accountability across the full lifecycle of defense programs.

The government initiated a comprehensive reassessment of Australia’s defence posture via a full Defence Strategic Review (2023) and, in April 2024, the first National Defence Strategy under Labor. These reviews concluded Australia faces a far more complex strategic environment, and recommended reshaping and modernizing the Australian Defence Forces (ADF) across all domains (maritime, air, land, cyber, space).

To respond, the Government committed to a “generational” uplift in defence funding, increasing acquisition, sustainment, and capability development resources to build a more self-reliant, capable, and integrated force.