LEWG 2026: One Process Becomes Two. What Defence’s Capability Reform Means for our Industry
At this year’s Land Environment Working Group in Canberra, Army’s key industry forum, one message was clear: Defence capability delivery has changed. From 1 July 2026, industry is no longer working through a single capability organisation, it is now working through two.
For SMEs in the Land domain, the question is simple: what does this mean for how you engage, when you engage, and who you need to influence? Here’s what changed, why it matters, and how to avoid navigating it alone.
From One Pathway to Two Distinct Bodies
The old Capability Development / management model has split. The Capability Development Division (CDD), now part of the Vice Chief of the Defence Force Group, led by MAJGEN Richard Vagg, now sponsors capability requirements across all five warfighting domains, including Land. It defines the requirement, builds the evidence-based business case, and secures government funding. Once approved, responsibility shifts to the Defence Delivery Agency (DDA, side note, but DDA will transition to the DDG in July 2027), which manages market solicitation, program mobilisation, acquisition, and sustainment. Within twelve months, DDA is expected to become an independent Defence Delivery Group, sitting outside the Department of Defence.
What has changed is Army’s role and that of the Head of Land Capability (HLC). The new incumbent, MAJGEN Kurt Brown is now Army’s sponsor for Army’s capabilities and is supported by several DGs (1 Star appointments) who provide guidance on Army’s capabilities post Gate 2 and into sustainment.
This is not change for change’s sake. It responds directly to the Rebuilding Defence Capability report, which called out slow decisions, unclear accountability, and repeated cost and schedule overruns. The intent is clear: Improve Defence’s ability to deliver the right capability to the warfighter, on time, and on budget
Two Front Doors, Not One
For industry, this creates two front doors at two different points in the Capability lifecycle.
Engage CDD, including Army’s Land Capability Development Branch, while requirements and business cases are still taking shape, and you can help influence scope, timing, and investment priorities. Pre-Gate 1.
Engage DDG, or later the Defence Delivery Agency, and you are responding to a capability decision that has already been made. (Gate 1 to Gate 2)
Mistime the engagement, and you risk pitching too early to the wrong group or too late to shape the outcome. Either way, it is a weak place to build a pipeline and plan your business activities.
“The reform itself isn’t the risk. Misreading it is. The businesses that come out ahead will be building relationships with capability sponsors months before a solicitation lands, not waiting for a tender to confirm a decision has already been made. That’s where we help clients get ahead: understanding the system early enough to shape and inform Defence’s requirements, not just respond to them.”
— Brydon Johnson, Managing Director, Systematiq
Why This Reshapes How Industry Should Plan
For defence SMEs, business development is no longer just about writing a strong tender response. It now depends on building credibility with capability sponsors earlier, understanding where programs sit against Gate 0, Gate 1 and Gate 2, and knowing which pathway is right for your capability. That is a more complex engagement task than many SMEs can manage alone, especially as DDA transitions to the DDG.
How Systematiq Helps You Navigate It
This is where Systematiq helps. We support defence industry clients to understand where their capability fits, build stronger evidence-based business cases, and engage the right stakeholders through the right channels at the right time. Reform creates opportunity for businesses that know how to move through it. It also creates risk for those that do not.
Need clarity on where your business fits in the new capability system? Talk to Systematiq about positioning your capability for success under Defence’s reformed pathway.
