Major versus Minor: How Defence Categorises What it Buys.

Somewhere in the Department of Defence's own glossary, reproduced in the Australian National Audit Office's 2023-24 Major Projects Report, sits one of the more quietly revealing sentences in the entire procurement system. Officially, a “minor capital acquisition project” is simply equipment that counts as capital equipment but does not qualify as a major project. That is the whole definition. Not a dollar figure. Not a scope. A minor project is minor because it is not major, and nothing more specific is offered.

For a construction, engineering or professional services firm sizing up its first piece of defence work, this is worth pausing on. It means the “major versus minor” language everyone uses is not one line drawn through Defence's spending. It is three separate systems wearing the same two words, and knowing which one you are actually in matters more than almost anything else in the tender documents.

Three systems, not one spectrum

The first system governs equipment and materiel: ships, vehicles, weapons, communications systems. Defence sorts these projects using a framework called Acquisition Category (ACAT), assessed across six factors including cost, technical difficulty and schedule complexity, not dollar value alone. At 30 June 2024, in what turned out to be one of the final editions of that report before Parliament's Joint Committee of Public Accounts and Audit cancelled it in March 2026, Defence was managing 568 major and 99 minor acquisition projects across the whole organisation, worth a combined $245 billion. This is the system that produces headlines. It is also the system most construction and engineering firms will never touch.

The second system governs construction and infrastructure, where most of this newsletter's readers actually sit. Administratively, it runs through the Security and Estate Group and its Estate Works Program, a separate pipeline from the equipment side this series has covered in earlier editions, and it runs on entirely different machinery again, covered in detail below.

The third system covers services: engineering advice, consulting, maintenance and design work. This mostly follows standard Commonwealth procurement rules with some defence-specific overlays, and moves considerably faster than either of the other two.

Where the real thresholds sit

If you are a construction or engineering firm, the numbers that actually govern your world are not ACAT categories. Two of the four that matter here will already be familiar from Edition 03: the Public Works Committee Act 1969 and the Commonwealth Procurement Rules' construction threshold, shown alongside the other two in the chart below. The other two mechanisms have not featured in this series before.

The first is the Gateway process. Capital works with a whole-of-life cost of $30 million or more can trigger an independent Assurance Review under this Commonwealth-wide framework. Defence also runs its own parallel two-stage approval process for its capital works program, distinct from the generic one used by other agencies. Neither should be assumed to apply automatically. Check both against the specific project before you price a bid.

The second is a compliance gate that has nothing to do with Defence specifically. Any head contractor on directly funded Australian Government building work valued at $4 million or more (GST inclusive) must hold accreditation under the Work Health and Safety (WHS) Accreditation Scheme, administered by the Federal Safety Commissioner (FSC), a legacy of the Cole Royal Commission into the building industry. Without it, a firm cannot legally be awarded the head contract, regardless of how strong the tender is. This needs to be in place before the tender opens, not discovered mid-bid.

Put together, these four mechanisms are what actually shape a construction or engineering firm's path into defence work, not the equipment world's ACAT categories.

A market that is real, but modest

The scale here deserves an honest look, because the numbers cut both ways. The Australian Bureau of Statistics' (ABS) Australian Defence Industry Account shows construction contributed $1,767 million in value-added to the defence industry in 2024-25, employing around 12,500 people across 407 businesses. That is a genuine, growing market, up from $1,605 million the year before. Put plainly: defence construction work is a real business, not a fortune, and firms entering it should size their expectations accordingly rather than picturing themselves on a submarine program.

Within that figure, the two main components are moving in different directions. Building construction has been broadly flat across the four years to 2024-25: $948 million in 2021-22, easing to $903 million in 2023-24, then recovering to $945 million in 2024-25. Heavy and civil engineering construction, by contrast, has grown substantially over the same period, from $456 million in 2021-22 to $611 million in 2024-25, after a dip to $428 million in 2022-23. It is a genuine divergence, and it points to where the momentum in defence-related construction currently sits.

The machinery is changing hands

Regular readers already know the outline from Edition 01: the Defence Delivery Group (DDG) merger. What is new is the horizon beyond that. DDG is a transitional structure that becomes a fully independent Defence Delivery Agency (DDA) on 1 July 2027, under a National Armaments Director. None of this changes the construction thresholds discussed above, which sit with the Security and Estate Group regardless of how the equipment side reorganises, but it is a reminder that the institutions behind these categories are themselves under active reform, not fixed reference points.

The practical takeaway

Most companies reading a defence tender for the first time ask “how big is this project?” The better question is “which system is this project actually governed by?” A $12 million facilities upgrade and a $12 million equipment project answer to completely different rules, different oversight bodies and different timeframes, despite an identical price tag. Understanding which of the three systems applies, and checking your own thresholds against it well before a tender opens, is a more reliable guide to what happens next than the size of the number on the page.

This is Edition 05 of the Australian Defence Tender Framework series by Visionex Solutions. The series publishes every Wednesday. Series 1: Understanding the Arena runs from 1 July to 9 September 2026.

Before reading this, did you assume “major” and “minor” meant the same thing whether you were bidding on equipment, construction or services? Share your view in the comments.

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