PETER LA FRANCHI / CANBERRA
DMO to become semi-independent agency reporting directly to defence minister
The Australian Defence Materiel Organisation (DMO) is to be separated from the Department of Defence to become a semi-independent acquisition agency reporting directly to the defence minister.
A major overhaul of Australia's capability development process is to be implemented, with a three-star position to be created in the DoD executive to take over the function now overseen by the vice chief of the Australian Defence Force.
The reforms follow an eight-month DMO review ordered by the Australian government because of concerns about acquisition project failures.
The defence procurement review rejected the creation of a standalone military acquisition agency governed by specific legislation.
The reforms will see Australia's "two pass" military acquisition approvals system restructured, which in turn will change how projects are incorporated into the 10-year defence capability plan (DCP). At present projects are added to the DCP at the recommendation of the defence capability committee.
Under the revised system, projects will only be added to the DCP once they have achieved "first pass" approvals, the acknowledgement of a capability gap by the cabinet national security committee.
After second pass approval, for acquisition of a capability solution, projects will proceed to tender.
Pre-first pass capability gaps are to be identified within an overhauled version of Australia's 12-month strategic evaluation cycle. The report proposes the introduction of more capable scenario-based forecasting methods to assist this process.
The review warns that the existing DCP suffers from inaccurate costings and poorly based schedule estimates. It recommends that the revised DCP under development and due for release in November be treated as an interim plan only, with all its projects to be reconsidered once the new process is established.
The review recommends that industry policy and strategic logistics functions be removed from the new DMO.
Source: Flight International
