A crucial decision will occur in the next few months that will shape Australia’s capability against small drones for decades: the selection of the systems integration partner (SIP) for Canberra’s Land 156 drone-defence project. The government should select genuinely domestic companies both for the SIP and the rest of Land 156 to reap a trifecta of capability, sovereign industry and export benefits.

Defence’s urgent need for an improved capability to counter small drones is clear. The Australian Defence Force has scant protection against such weapons, and Ukraine’s successful use of them on 1 June in Operation Spiderweb against Russia has shown that a creative adversary can use such drones to strike anywhere.

To its credit, Canberra has begun to move, with Mission Syracuse aiming to deliver a limited ADF defensive capability by the end of 2027. But comprehensive protection will come through Project Land 156. This is intended to deliver a suite of drone-detecting sensors, effectors (systems that neutralise drones, such as guns, lasers or jammers), and a command and control system to tie it all together.

In the manner of large Defence projects, Land 156 will take time and is not slated to deliver an initial capability until after 2030. Yet a vital decision point is scheduled for 2025 (that is, in the next few months): picking a company as the SIP. The tender process for this began last year, with the winner to be responsible for the project’s ‘market analysis, design… [and] capability delivery’, including options for the command and control system.

While all this may seem fairly dry and bureaucratic, the implications could not be more important for Australia’s drone defence capabilities and local industry. This is because the SIP will be responsible to Defence for identifying, recommending, and then delivering specific capability options across the entire Land 156 project. It could be overruled, but the default position will be that what the SIP says, goes.

Due to this importance, several companies have expressed interest in being the SIP or been identified as having bid for the role. These include Australia’s domestic companies DroneShield (whose specialties cover the full breadth of Land 156 capability requirements) and Nova Systems (a defence engineering and technology firm) together with two local subsidiaries of US firms, Anduril Australia and Lockheed Martin Australia.

Doubtless many other businesses have applied for the role too. And more broadly, many Australian companies have proven counter-drone technologies suited to specific elements of Land 156, such as sensors, effectors or command and control systems.

It’s against this backdrop that Defence must make its decisions. And for the SIP and component providers, Canberra should strongly prefer truly those domestic Australian companies with proven counter-drone capabilities. This will minimise risk and cost due to demonstrated expertise while bringing key advantages in capability, industrial self-reliance, and export success.

Regarding capability, any SIP that is a foreign subsidiary will have strong incentives to recommend its parent company’s systems (and the parent’s preferred local overseas vendors), regardless of whether they are truly the best in class. While the same could be said for a domestic firm and its local partners, for these Defence will have real access to system data (including software code) to justify any SIP recommendations, assure security, and will also know the equipment is designed for Australian conditions.

These factors are much less true for foreign systems, with reality often only becoming apparent once they’re in service. For example Israel’s Elbit was booted from a command and control program due to security concerns (which the company strongly rejected). And the ADF’s European MRH-90 helicopters failed for 16 years to perform adequately before being replaced 14 years early.

In turn, a domestic SIP that selects domestic capabilities will support building a sovereign industrial base in a key defence area. So, taxpayer dollars would concurrently deliver ADF capability, support Australian jobs and ensure diverse sensor, effector, and C2 technologies—applicable to many fields beyond drone defence—are further-developed and implemented locally.

In contrast, even if foreign companies allow for technology transfer and local production of their equipment in Australia, industry in Australia will at most be copying someone else’s homework. The process will not foster the innovation that local firms need to compete in the world marketplace, and US technology in particular comes with infamously restrictive limitations on its development or export under Washington’s International Traffic in Arms Regulations, better known as ITAR.

On that note, Australian domestic companies have already achieved export successes, with for example more than 1,000 of DroneShield’s systems in combat-proven operation in Ukraine. Harnessing Land 156 to support domestic firms to build their products, give them the vote of confidence that is ADF service, and keep them free from ITAR and other foreign restrictions, will be vital in expanding Australia’s share of a growing market.

There’s a lot riding on what Defence will decide in the second half of 2025. It’s to be hoped that the government makes the right choice.