AQMN Supports Clients to Achieve Annual Price Indexations across ASDEFCON Contract

AQMN has supported industry clients in securing annual price indexations within ASDEFCON contracts, keeping commercial terms aligned with real input costs and market conditions.

Protecting Industry Value

ASDEFCON contracts set the benchmark for Defence procurement in Australia. They also impose strict timing, evidence, and approval pathways. AQMN’s work has been to locate the indexation levers in those templates, confirm they are engaged in the current contract, and run the formal process with the Commonwealth so adjustments are approved and applied.

The outcome is simple: suppliers are not trapped on last year’s price base. Indexations have accounted for inflation, wage movement, exchange-rate exposure, freight and materials shocks, and other verified cost drivers—so capability can be delivered without eroding margins.

How Indexation Works in Practice

Annual price movement under ASDEFCON is usually tied to defined indices (for example, consumer price and wage measures), clear calculation methods, and strict notice requirements. The contract often sets:
 

• Which indices apply and to which line items or components.
• When adjustments can be claimed (e.g., anniversary dates or review windows).
• What evidence is required (published index references, cost breakdowns, supplier confirmations).
• Who approves within the Commonwealth and the form of correspondence.
   

AQMN prepares the position paper, cites the contract provisions, references the correct indices, and submits a calculation that Commonwealth decision-makers can verify quickly. Where terms are silent or ambiguous, we frame a variation pathway grounded in contract purpose and procurement rules.
 

Common Issues We See and Fix

Missed windows. Teams overlook the claim date or provide late notice. We reset the schedule and agree a forward timetable with the Commonwealth desk.
Wrong indices. The contract references do not match what has been used in practice. We correct the baseline and reconcile prior years where appropriate.
Partial coverage. Only some items are indexed when the template allows broader application. We expand coverage based on the text of the agreement.
Evidence gaps. Claims lack source data, supplier inputs, or exchange-rate substantiation. We compile proper material so the assessment can be made without delay.
Counterparty pushback. We answer clarifying questions, align on the method, and keep the matter moving to decision.

Legal and Commercial Precision
 

Work has been led from AQMN’s ACT and NSW practices. The approach is consistent: read the contract, set the interpretation, calculate the adjustment, and present it in a form the Commonwealth can adopt. Where needed, we align with internal finance and supply-chain teams so the numbers and the paper tell the same story.

This has delivered measurable benefit—maintained contract viability, protected margins, and sustained delivery tempo on critical programs.

Why This Matters for Industry

Indexation is not a “nice to have”; it is a core control in long-duration Defence contracts. Without it, step-ups in labour, materials, shipping, and compliance consume the price base and force trade-offs that harm delivery. With it, companies can plan, resource, and meet obligations without carrying unpriced risk.
 

For primes, the effect runs through the supply chain; for SMEs, it can be the difference between viable and loss-making delivery. In both cases, getting the mechanism right keeps capability on schedule.
 

Governance, Probity, and Record
 

Every adjustment must withstand scrutiny. We keep the record straight: the contract clause relied on, the indices and periods used, the calculation sheet, and the counterparty correspondence. That file lets commercial leads show what was requested, why it was justified, and how the decision was reached.
 

What Clients Can Expect
 

• Contract read-in: confirm what the agreement permits and where the levers sit.
• Method set-up: define indices, periods, and coverage; align with finance.
• Submission pack: short brief, worked calculations, and supporting materials.
• Counterparty engagement: answer queries and close out to approval.
• Forward timetable: lock the next review window and evidence plan.

Looking Ahead
 

As Defence programs scale and supply conditions remain tight, the need for disciplined price maintenance will increase. AQMN will continue to help industry apply ASDEFCON indexation mechanisms correctly, keep value in the deal, and ensure contracts perform over their life.