The Australian defence establishment should urgently work with commercial providers to deliver military and dual-use capabilities that can be deployed in months, not years or decades. Government procurement pathways alone cannot meet the demands of the current strategic landscape.
Full exploitation of commercially owned, commercially operated (COCO) models of service delivery would help bridge the gap between Australia’s strategic ambitions and its current capability. COCO defence services are also agile and cheaper.
Private companies can conduct persistent maritime surveillance and operate autonomous logistics networks. They can also deploy and control military-relevant uncrewed systems from operations centres thousands of kilometres from the operations.
Australia’s strategic challenge lies in a shortage of deployable capability. Defence debate often focuses on future programs, larger budgets and acquisition reform, but many key capabilities remain many years from service. Meanwhile, our strategic environment continues to deteriorate. Deterrence must be judged against the capability that exists today and in the very near future.
The 2024 National Defence Strategy recognised this by adopting a whole-of-government and whole-of-nation approach, mobilising industry, technology and infrastructure alongside military power to build resilience. COCO should be viewed as a valuable tool in this.
Traditional defence acquisition remains heavily dependent on slow, sequential processes. But companies, as the US Government Accountability Office has reported, save time with iterative development, continuous user engagement and overlapping design, testing and production activities. COCO can translate these advantages into faster capability delivery, allowing governments to access an operational capability that has already been developed, staffed and sustained by industry, rather than waiting for a new government-owned capability to progress through a lengthy acquisition lifecycle.
By using COCO models of service delivery, a government can avoid buying and sustaining every piece of major equipment itself. Industry finances, owns, maintains and operates the system, while government sets requirements, retains tasking authority, and oversees performance, security and risk. A government can thereby procure operational outcomes as a service, rather than spend years in acquiring, certifying, staffing, sustaining and upgrading a government-owned capability.
The attraction is not simply speed. COCO arrangements reduce upfront expenditure because the government pays for capability with ongoing service payments. Defence can have a capability without the full ownership burden. Risk is lower because commercial operators can spread costs of assets, workforce, sustainment and upgrades across multiple customers and redeploy resources as demand changes. They can also apply lessons from other market segments to improve what they offer to Defence.
This does not mean outsourcing government responsibility. The government still controls missions and information flow, while industry is responsible for ownership, maintenance and technology updates.
There are successful Australian examples of COCO models outside Defence. For example, the Australian Border Force operates one of the world’s largest civil maritime surveillance programs through industry partnerships, surveilling Australia’s exclusive economic zone without requiring government ownership of every aircraft and sensor.
Australia’s allies are exploring similar models. The Royal Navy’s Atlantic Net concept seeks to use private capital, commercially operated autonomous systems and service-based delivery models to accelerate capability. The New Zealand Defence Force is also examining COCO solutions for persistent air surveillance.
Canberra should be exploring this approach more aggressively.
The maritime domain is well suited to this approach. Private companies are already investing heavily in autonomous surface and underwater craft, artificial intelligence, advanced sensors, and remote and autonomous operations. In many cases, technology development cycles move substantially faster than traditional defence procurement processes.
Companies offering militarily relevant services in Australia include Metrea, Leidos, Ocius and Ocean Infinity (which I work for). Metrea won an Australian Border Force surveillance contract in May.
COCO arrangements enable responsive experimentation and efficient switching between services. Defence can test new concepts, compare providers and adjust requirements without becoming locked into decades-long ownership decisions.
Not every mission is suitable for COCO delivery, especially high-end combat operations that require government-owned military capabilities. But many non-combat capabilities across surveillance, logistics support, infrastructure monitoring and autonomous system operations could be delivered through service-based models today.
COCO can complement traditional procurement options. It should be considered whenever a capability is needed urgently. Technology that the government needs is already in the market, and officials can control it through contracts, security requirements and oversight.
The strategic warning time has shrunk, but Defence procurement timelines and mechanisms have not. The choice is not between government-owned capability and commercial capability but between capability available now and capability arriving too late. In a deteriorating strategic environment, capability delayed is capability denied. Australia should put commercially delivered capability to work now.
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