Australia's Department of Defense has selected five major military suppliers for its framework contract to improve procurement and integration of information and communications technology.

The "Preferred Industry Partners" will work with the Defense Department as consultants and prime contractors for future IT projects, a department statement said.

The PIPs are Accenture Australia, BAE Systems Australia, CSC Australia, IBM Australia and Hewlett Packard Australia.

The move is part of improvements to save nearly $2 billion from ICT procurement by 2019, as stated in the long-term military white paper Strategic Reform Program 2009: Delivering Force 2030, published in 2009.

"The change is a significant milestone in defense's strategy to improve the department's performance in delivering information and communications technology as part of the Strategic Reform Program," the statement said.

"Defense has traditionally struggled to achieve timely and cutting edge ICT solutions due, in part, to procurement and approval processes that fail to keep pace with technological advances."

The framework contract, called the Applications Managed Services Partnership Arrangement, "will create efficiencies by leveraging industry experience and innovation by rapidly sourcing application development, systems integration and sustainment capability."

Under the contract, the Department of Defense will work with the companies on solving problems, upgrading equipment and purchasing new systems using their supply chains.

"As defense's demand for ICT services continues to grow, these partnerships will enable services to be rapidly sourced within a commercial framework that ensures value-for-money and reduces risks to the Commonwealth," the statement said.

"The PIPs will gain an insight into defense business enabling them to play a strategic role in project development, suggesting innovative solutions and helping to inform management decisions."

Under the Strategic Reform Program, all defense's business processes for operational and non-operational assets are being made "smarter, tighter and more cost-effective."

Targeted savings to 2019 include $4.56 billion on non-equipment procurement, another $4.56 billion on equipment maintenance, $726 million through better inventory management, around $332 million on logistics operations and $3.42 billion through shared defense services.

The white paper was highly critical of ICT procurement and systems, saying they are "fragmented with less than half of the $1.25 billion spent visible to the Chief Information Officer, resulting in inefficiencies in delivery."

The paper made reference to the department's history of a lack of scrutiny of contracts. Defense Department aims to "reduce high 'business as usual' costs" and spread business continuity more evenly throughout the supply chain.

There will be "tighter cost control, new sourcing strategies" focusing on a standardization and consolidation of assets. Costs and 'time-to-market' also will be reduced.

The Department of Defense will "mitigate an unacceptable business continuity risk," the white paper said.