Australia's Defence Materiel Organisation (DMO) should be separated from the Department of Defence and become an executive agency in an effort to improve defence procurement, says a new independent review.
Such a move was first proposed by the 2003 Kinnaird Review of Defence Procurement, but the recommendation was not implemented by the former Howard government. The latest review, the Mortimer Review, was commissioned by the new government to assess the DMO and the effectiveness of Australia's defence procurement systems.
The Mortimer Review has identified five principal areas of concern - inadequate project management resources in the Capability Development Group, the inefficiency of the process leading to government approvals for new projects, DMO personnel shortages, delays due to inadequate industry capability, and difficulties in the introduction of equipment into full service.
The review makes 46 recommendations, one of the most contentious of which is the executive agency proposal, under which the DMO would have its own acquisition funding, would be headed by a chief executive with "significant private sector and commercial experience", and a new general manager, a commercial position created to implement a business-like focus throughout the organisation.
While the report says that changes made following the Kinnaird review have improved defence procurement, projects such as the recently cancelled Army tactical unmanned air vehicle, which was more than two years late, show that "significant problems still exist".
The DMO and Department of Defence have more than A$100 billion ($78.8 billion) worth of equipment under sustainment, being acquired or planned over the next 10 years, including managing 230 major projects worth more than A$20 million each.
Source: Flight International