At the recent Land Environment Working Group, Defence briefed industry on a significant shift in how capability is developed and delivered. Since 1 July 2026, the capability pathway has been split between capability development and sponsorship on one side, and acquisition, introduction into service and sustainment on the other. For industry, this is more than an organisational change. It creates two distinct points of engagement, and it changes when your input can still make a difference.
In Systematiq’s third industry update for 2026, we unpack who now does what across the capability life cycle, why timing has become critical, and what businesses, particularly SMEs, need to understand to influence requirements before a tender is released.
TWO POINTS OF ENGAGEMENT WITH DEFENCE
The new structure separates the people who shape and fund capability from the people who buy and sustain it. Understanding each role is the first step to engaging effectively:
- Capability Development Division (CDD). As the Capability Sponsor, CDD shapes requirements for the future force. It builds the evidence-based business cases and secures government funding for acquisitions.
- Defence Delivery Group (DDG). Formed on 1 July 2026 by merging CASG, the Guided Weapons and Explosive Ordnance Group and the Naval Shipbuilding and Sustainment Group, the DDG leads acquisition, introduction into service and sustainment. It becomes the independent Defence Delivery Agency (DDA) from 1 July 2027.
- Service Headquarters. This is what has changed most. For Army, the Capability team led by Major General Kurt Brown takes over from CDD once a project passes Gate 2 and an acquisition contract is in place. As Capability Operator, it manages the capability through acquisition and into sustainment.
TIMING MATTERS IN DEFENCE
The practical implication of this reform is simple: when you engage matters as much as how.
If you engage with Defence stakeholders early, through CDD, while requirements are still being shaped, you can help influence the scope, the priorities and the level of investment a capability needs.
If you wait until a solicitation is released to market, the key decisions may already have been made. The program may have moved to the DDG (soon the DDA), and your ability to influence the requirement may be gone. Suppliers respond to requirements. Early engagers help shape them.
WHY THE REFORM MATTERS FOR INDUSTRY
Defence’s reform aims to improve accountability across the organisation and deliver capability faster, with renewed emphasis on on-time and on-budget delivery. It also makes stakeholder engagement more complex.
The businesses best positioned to succeed under this model will understand:
- Where their target project sits in the program and the capability life cycle.
- Which gate the project has reached, and what that means for who holds decision-making authority.
- Why credibility matters with both sponsors and operators, not just with the acquisition team.
- Who to engage, and when, at each stage of the capability life cycle.
HOW SYSTEMATIQ CAN HELP
At Systematiq, we help clients clarify where their capability fits, which project it aligns to, and what stage of the life cycle that project has reached.
We also help strengthen the business case you take to the Commonwealth, and help you engage the right stakeholders, at the right time, in the right way. Under Defence’s new model, that clarity is what separates shaping a requirement from simply responding to one.
Need help clarifying your pathway into Defence? Explore our Pre-Contract Services to see how we help clients build winning positions before tenders are released. Or get in touch with our team to discuss your next Defence opportunity.
