On 2 July the Commonwealth Government released the Rebuilding Defence Capability Report, while on the previous day the Defence Delivery Group was stood up. The new Group consolidates the Capability Acquisition and Sustainment, Guided Weapons and Explosive Ordnance, and Naval Shipbuilding and Sustainment Groups.
The Defence Delivery Group will operate for one year during a structured transition phase to embed integrated ways of working through stronger governance, and implement critical workforce and system reforms. In parallel, the consolidation of capability development functions for maritime, land, air, space and cyber domains, under the Vice Chief of the Defence Force, creates a single line of accountability for requirements development, and advice to government on capability proposals. This transition phase will culminate in the establishment of the Defence Delivery Agency on 1 July 2027 as an Executive Agency. Under the leadership of the National Armaments Director, the Defence Delivery Agency will be directly accountable to Ministers and responsible for delivery performance across acquisition and sustainment.
The Government stated that,
“These reforms address a capability system that has not kept pace with Australia’s deteriorating strategic environment, and will deliver the right capability to the warfighter in line with the 2026 National Defence Strategy. Establishment of the Defence Delivery Agency will create clear, singular accountabilities for delivery within an integrated decision framework, in which Defence defines its capability needs, while the Defence Delivery Agency is accountable for delivery. Central to this model is a reset of Defence’s relationship with industry, moving from diffuse engagement to a coherent, disciplined partnership. As Industry Steward for the Defence portfolio, the National Armaments Director will provide clearer demand signals to industry, embed structured and earlier engagement into the capability lifecycle, and ensure delivery decisions account for cost, schedule, risk, and industrial capacity.”
The Rebuilding Defence Capability Report executive study stated:
“Australia’s defence capability must be delivered differently to meet the demands of a more dangerous and unpredictable era, where the consequences of delay, cost growth, and capability underperformance are more serious than they have been in generations.
The Defence reforms respond to the structural mismatch between this environment and the performance of the capability system. They are designed to restore alignment between strategic demand and the Defence portfolio’s ability to deliver.
The objective is clear: to deliver the right capability to the warfighter—on time, on budget and with decisive effect.
These reforms strengthen accountabilities, governance, assurance, and discipline across the capability lifecycle, and will build a workforce and leadership culture capable of delivering the National Defence Strategy. These reforms have three central components:
- Establishment of the Defence Delivery Agency, as a dedicated delivery organisation headed by a new National Armaments Director, consolidating Capability Acquisition and Sustainment Group, Guided Weapons and Explosive Ordnance Group, and Naval Shipbuilding and Sustainment Group.
- For the year of transition to the Defence Delivery Agency (1 July 2026 to 30 June 2027), these functions will be established under a single organisational structure, the Defence Delivery Group, within the Department of Defence.
- On 1 July 2027, the Defence Delivery Group will transition to the newly established Defence Delivery Agency, an executive agency, operating with autonomy and accountable to the Minister for Defence and Minister for Defence Industry.
- Consolidation of capability development functions for the five warfighting domains (land, air, maritime, space and cyber) under the Vice Chief of the Defence Force.
- A re-designed capability system, which clarifies accountabilities and re-establishes decision disciplines. This system will be underpinned by stronger contestability and improved cost estimation and assurance.
The National Armaments Director will reset Defence’s relationship with industry. As industry steward, the National Armaments Director will provide clear, long-term demand signals, informed by domestic and international industry intelligence. This partnership with industry reflects the concept of National Defence, harnessing all arms of Australia’s national powe
A structured professionalisation program will be introduced to build upon and uplift the skills and expertise of the capability workforce. The program will establish consistent professional standards, build technical and commercial expertise, and embed performance discipline across the system.
These reforms within Defence are being undertaken in a deliberate, staged and structured approach to ensure that there is continuity in project delivery. The period of transition to the Defence Delivery Agency will be used to finalise and implement its legal, governance, financial and operational foundations. During this period, the Defence Delivery Group will remain within the Department of Defence.
The reforms will mean that the Defence portfolio will operate as an integrated system that translates strategy into executable capability. The result will be clearer accountability, stronger decision-making, and more reliable delivery, providing government and the Australian community with confidence in Defence’s ability to meet its commitments.”
The full report can be accessed at:
https://www.defence.gov.au/sites/default/files/2026-07/RebuildingDefenceCapability_FINAL.pdf
