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Defence Materiel Organisation
This second report on the status of selected Defence equipment acquisition projects continues to build on the work undertaken by the Defence Materiel Organisation (DMO) and the Australian National Audit Office (ANAO) to improve the transparency and public accountability of these major Defence acquisitions. It covers the cost, schedule and capability progress achieved by 15 DMO projects, which had an approved budget totalling $37.8 billion as at 30 June 2009.
The report is organised into three parts. Part 1 comprises an ANAO overview, incorporating the Auditor–General’s Foreword, a summary of projects’ performance and acquisition governance issues arising from the ANAO’s review. Part 2 comprises the DMO’s Major Projects Report, including the CEO DMO’s Foreword, lessons from last year’s report, developments in DMO’s business and longitudinal analysis of projects. Part 3 incorporates the Auditor-General’s Review Report, the statement by the CEO DMO and the information prepared by DMO in the form of standardised Project Data Summary Sheets covering each of the 15 projects.
In reviewing projects’ performance, the ANAO’s analysis indicates that maintaining major acquisition projects on schedule remains a major challenge for the DMO and industry contractors, affecting when the capability is made available to the Australian Defence Force as the end user.
In the next 12 months, the ANAO will review up to 23 DMO projects planned for inclusion in the 2009-10 Major Projects Report, with the number of projects rising to up to 30 projects in subsequent years. The ANAO and the DMO will be working with the Joint Committee of Public Accounts and Audit to further enhance the value of the report as it continues to evolve.
The objective of this audit was to assess whether the strengthened two–pass approval process for major capital equipment projects is being implemented effectively.
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Given the significant expenditure associated with the Super Seasprites, and the problems that the Project had encountered over some time, the ANAO had commenced this performance audit prior to the Government's decision to cancel the Project. The focus of the audit was on Defence’s and DMO’s administration of the Project. In light of the Government's decision to cancel the Project, the objective of the audit was revised to place greater emphasis on those issues that resulted in the failure of the Project to provide the required capability, and highlighting project management lessons for major Defence acquisitions going forward.Accordingly the audit objective was to:
- identify those factors that contributed to the on-going poor performance of the Project;
- outline measures taken by Defence and DMO in seeking to overcome issues encountered by the Project, and key lessons arising from this project for the benefit of major acquisitions projects generally; and
- determine the capability and cost implications of a project that failed to deliver to expectations.
The objective of this audit was to:
- assess Army’s progress in addressing the issues previously identified in Defence reviews and ANAO audits as affecting the Army Reserve’s capability; and
- Identify the extent that the Army Reserve is capable of contributing to contemporary Australian Defence Force capability requirements through fulfilling its assigned roles and tasks.
The objectives of this audit were to assess:
- the progress of the M113 Armoured Personnel Carrier Upgrade Project against stated schedule, cost and technical performance objectives; and
- Defence Materiel Organisation’s (DMO’s) progress in implementing the recommendations and addressing the findings of ANAO Audit Report No. 3 2005–06, Management of the M113 Armoured Personnel Carrier Upgrade Project.
The audit focussed on performance information reporting by the submarine System Program Offices on reliability, safety systems and logistic support services. In the context of the sustainability arrangements, the audit considered combat system upgrades and personnel escape and rescue systems. Any arrangements that the Commonwealth may be considering regarding the potential sale of ASC were not within the scope of this audit.
This first Assurance Report on the status of selected Defence equipment acquisition projects, which has the support of the Parliament and the Government, represents a substantial step towards improving transparency and public accountability in major Defence procurement projects. It is the pilot of an annual Defence Materiel Organisation (DMO) Major Projects Report, and was developed in conjunction with the DMO. It covers the cost, schedule and capability progress achieved by nine DMO projects, which had an approved budget totalling $13.535 billion as at 30 June 2008.
This report is organised into three parts. Part 1 comprises an ANAO overview and Auditor–General’s Foreword. Part 2 comprises the Major Projects Report prepared by DMO, including an overview reflecting DMO’s perspective on their business and on the nine projects included in the. Part 3 incorporates the Auditor?]General’s Review Report, the statement by the CEO DMO, and the information prepared by DMO in the form of standardised Project Data Summary Sheets covering each of the nine pilot projects.
In the next 12 months, the ANAO will review 15 DMO projects planned for inclusion in the 2008-09 DMO Major Projects Report, with the number of projects rising to 30 projects in subsequent years. The ANAO will also work with DMO to refine the approach adopted for providing assurance on each project’s progress toward achieving Final Operational Capability. The ANAO will also consider the inclusion of an analysis of each project’s emerging trends, as appropriate, to complement DMO’s intention to provide improved analysis of project management performance regarding all projects included in the Major Projects Report.