Review Case Study and Article Event 25 Deakin University CRICOS Provider Code: 00113B.
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Review Case Studyand Article
Event 25
Deakin University CRICOS Provider Code: 00113B
25.1 Defence R&D
R&D important and a significant costfor defence• As an industry, defence is an adopter of new
technology – always searching for an edge– Products purchased are often applications that result
from integrating new and complex technologies in a novel way (constant innovation)
– There is a need for systems to adapt and repurpose over long time periods
• Therefore, R&D is important but also costly:– Amount of R&D varies enormously by project– It is a significant cost– Projects can be high risk in terms of cost overruns
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25.2 R&D Contracting and IP
Discussion as large group• Should defence pay for R&D? Provide
arguments for and against.
• Who should own the intellectual property (IP) rights to a product that results from R&D?
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25.3 Should Defence Pay for R&D?
Arguments for• Provides recognition of defence-specific
R&D requirements (i.e. helps ensure research istask specific)
• Ensures full testing and development carried out, improving whole-of-life outcomes on research products as they come to fruition
• Allows specific adaptation/evolution of capability over life of long contracts
• Motivates contractors to continue development ina particular direction
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25.4 Should Defence Pay for R&D?
Arguments against• R&D may be high risk and large markets are
not always available to recoup sunk costs:
– How much R&D can be used elsewhere?
– Need for phased approach and success KPIs ateach stage
• What level of R&D should industry be funding itself outside outsourcing contracts?
• How much should we pay up front as R&D versus paying for product when it is working?
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25.5 Intellectual Property
Who should own the IP?• If supplier funds R&D under own volition (background IP):– IP is usually supplier owned
– GoC can purchase right to use
• If defence funds R&D (foreground IP):– GoC seeks to own IP
– Ensures that rights cover maintenance/modifications, so will not pay for IP twice via high in-service support costs of proprietary technology, documentation, future production
– Is it better to license IP for scope of work (create, operate, sustain and modify) if not intending to exploit IP?
• Competitive issues:– Purchasing IP rights may help foster competition for downstream
maintenance, support and modification
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25.6 Case study – Research and development costsDiscussion points• Explore the issue of ‘ownership’, background
IP and foreground IP rights and the possibilities of finding middle ground.
• What is meant by ‘commercialisation rights’, ‘ownership of IP’, ‘licence to use’, ‘licenceto alter’ and ‘licence to sell’ in respect to IPin contracts?
• Discuss possible solutions and barriers to those solutions in this case study.
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25.7 Review Article – No ‘tree hugging’ for UK procurement and support
Discussion points• Where is the ADM Mat Group at in relation to
the UK thinking?
• Given the emphasis on relationship with industry whole of life approach to procurement, what are the key challenges for suppliers?
• Given the emphasis on relationship with industry whole of life approach to procurement,what are the key challenges for ADM Mat Group (you)?
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