Department of Defence introduces new rules restricting former APS, ADF staff from contracting roles

The Department of Defence on Monday implemented a moratorium on entering contracts with former staff within 12 months of them leaving the department.

The moratorium applies to outsourced positions which would normally be undertaken by APS or ADF personnel, known as "Above the Line" roles, rather than outsourced service providers or consultants with specialist skills.

Defence expert Professor John Blaxland said the department must now seriously consider how it will fill capability gaps left by those contractors.

Analysis by The Canberra Times has revealed the department entered $26 billion worth of contracts last financial year, which includes multi-year contracts.

Defence has committed to cutting 2000 contractor roles by the end of 2024, and plans to save $154 million next financial year by making cuts to external labour, advertising, travel and legal expenses.

It is also expected to convert 1029 external labour roles into the APS workforce in the next financial year.

"If you're going to do away with the contractors, you have to change the model," Defence expert Professor John Blaxland said.

"You cannot just close the contractors out and think that everything will work.

"It won't, you're going to have a crisis on your hands.

"Because the system is now hooked on consultants, and without the consultants you're going to have a serious derailing of bureaucratic functions."

The government must seek to retain these staff in the APS, Professor Blaxland said.

"Offer contracts as government employees directly bring them back in to the government on special terms, as special advisers, as technical advisors, on terms as government workers," he said.

"This is what you could do, easy. You don't have to go to a private corporation to hire these people."

Community and Public Sector Union national president Brooke Muscat said steps to reduce contracting would lead to improved public sector capability.

"Reducing outsourcing within the Department of Defence will do more than meet a financial target - they'll see capacity and capability growth, better recruitment results and improved staff retention," she said in a statement.

"As a rule of thumb, roles that can be performed by APS employees, should be. Not only in Defence, but right across the APS."

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Secretary Greg Moriarty and Defence Force chief Angus Campbell issued the joint directive last week, citing the department's commitment to reducing its reliance on temporary labour.

The moratorium will include exceptions where there are compassionate reasons for engaging a recently separated APS or ADF employee, where there is commercial or capability necessity, and pre-existing negotiations.

It will not apply to former Defence staff already contracted back in.

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