Footnotes

Executive summary - Recommendations

[1]        ANAO Audit Report No 52 2011–12, Gate Reviews for Defence Capital Acquisition Projects, paragraph 4.21.

[2]        A number of the recommendations are taken from, or based on, RAND, Learning from Experience, Volume IV, Lessons from Australia's Collins Submarine Program 2011, pp. xiii–xiv.

Chapter 1 - Introduction

[1]        Submissions 37–42 and Supplementary Submissions 3A–G, 4A, 6A, 11A, 14A, 17A, 21A, 21B and 22A, 40A.

[2]        Media Release, 'Prime Minister, Minister for Defence—Joint Media Release—Release of final Defence Force Posture Review report', 3 May 2012, http://www.minister.defence.gov.au/2012/05/03/prime-minister-minister-for-defence-joint-media-release-release-of-final-defence-force-posture-review-report/ and Media Release, 'Prime Minister, Minister for Defence—Joint Media Release—New Defence White Paper 2013', 3 May 2012, http://www.minister.defence.gov.au/2012/05/03/prime-minister-minister-for-defence-joint-media-release-new-defence-white-paper-2013/ (accessed 3 May 2012).

[3]        Report on the Australian Parliamentary Delegation to the UK, Spain, Germany and the United States, 14 April–3 May 2012, tabled in the Senate 15 August 2012.

[4]        Senate Foreign Affairs, Defence and Trade References Committee, Procurement procedures for Defence capital projects, Preliminary report, December 2011, p. xiv.

 Chapter 2 - Project performance

[1]        ANAO Audit Report No. 41 2008–09, The Super Seasprite, pp. 13–14 and The Hon Joel Fitzgibbon MP, Minister for Defence, 'Seasprite Helicopters to be cancelled', MIN14/08, 5 March 2008, http://www.defence.gov.au/minister/70tpl.cfm?CurrentId=7480 (accessed 2 April 2012).

[2]        The Hon Greg Combet MP, Parliamentary Secretary for Defence Procurement, Speech, Defence Watch Luncheon, 22 May 2008.

[3]        The Hon Greg Combet MP, Parliamentary Secretary for Defence Procurement, Address to Australian Command and Staff Course Members, Australian Defence College, 24 November 2008.

[4]        ANAO, Submission 22, paragraph 19.

[5]        ANAO, Audit Report No. 41 2008–09, The Super Seasprite, pp. 16–17.

[6]        Air Power Australia, Supplementary Submission 40A.

[7]        ANAO Audit Report No. 41 2008–09, The Super Seasprite, paragraphs 94–95.

[8]        The projects of concern list was established in 2008 to focus Defence and industry's efforts on 'solving the issues required to remediate listed projects'. The Hon Stephen Smith, Minister for Defence, and the Hon Jason Clare MP, Minister for Defence Materiel, 'Projects of Concern—Update', 15 October 2010.

[9]        Stephen Smith MP, Minister for Defence, 'Minister for Defence, Minister for Defence Materiel: Projects of Concern—Update', 1 February 2011.

[10]      Senate Foreign Affairs, Defence and Trade Legislation Committee, Estimates, Committee Hansard, 23 February 2011, pp. 36–37.

[11]      Committee Hansard, 7 October 2011, p. 30.

[12]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, pp. 198-199.

[13]      The Hon Greg Combet MP Parliamentary Secretary for Defence Procurement, Address to Australian Command and Staff Course Members, Australian Defence College, 24 November 2008.

[14]      Committee Hansard, 5 October 2011, p. 31.

[15]      ANAO Report No. 20 2011–12, 2010-11 Major Projects Report, p. 203.

[16]      Defence Materiel Organisation, 'February 2012 Estimates: DMO Statement on Projects of Concern', 9 February 2012, p. 3.

[17]      Department of Defence, 2008 Audit of the Defence Budget, Commonwealth of Australia, 3 April 2009, p. 76.

[18]      Department of Defence, 2008 Audit of the Defence Budget, Commonwealth of Australia, 3 April 2009, pp. 76–77.

[19]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, p. 206.

[20]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, p. 272.

[21]      ANAO Audit Report No. 36 2005-06, Management of the Tiger Armed Reconnaissance Helicopter Project—Air 87, May 2006, p. 11.

[22]      Aircraft Research and Development Unit.

[23]      The DAO was DMO predecessor.

[24]      ANAO Audit Report No. 36 2005-06, Management of the Tiger Armed Reconnaissance Helicopter Project—Air 87, May 2006, p. 12.

[25]      ANAO Audit Report No. 36 2005-06, Management of the Tiger Armed Reconnaissance Helicopter Project—Air 87, May 2006, paragraph 5.

[26]      The Hon Greg Combet MP, Parliamentary Secretary for Defence Procurement, Speech, Defence Watch Luncheon, 22 May 2008.

[27]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, p. 276.

[28]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, p. 280.

[29]      ANAO Report No. 36 2005–06, Management of the Tiger Armed Reconnaissance Helicopter Project—Air 87, paragraph 29.

[30]      ANAO Report No. 20 2011–12, 2010-11 Major Projects Report, p. 317.

[31]      ANAO Report No. 20 2011–12, 2010-11 Major Projects Report, p. 319.

[32]      JCPAA, Committee Hansard, 9 May 2007, p. 20. Mr Steve Gumley stated that 'one of the main areas of the up-skilling program is to train our own. We have been out to the market; we have seen what is there. It is a limited pool of qualified people. The industry, obviously, want exactly the same people. There are 7,000 people in DMO, but there are 26,000 people in the industry, and they need the same sorts of people'.

[33]      Stephen Smith MP, Minister for Defence and Jason Clare MP, Minister for Defence Materiel, Media Release, 'Reforms to Projects of Concern', MR 187/11, 29 June 2011.

[34]      The Hon Greg Combet MP, Parliamentary Secretary for Defence Procurement, Address to Australian Command and Staff Course Members, Australian Defence College, 24 November 2008.

[35]      Committee Hansard, 12 June 2012, p. 28.

[36]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, p. 323.

[37]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, p. 328.

[38]      Information received during the committee's visit to Western Australia.

[39]      ANAO Audit Report No. 57 2010-11, Acceptance into Service of Navy Capability, paragraph 49.

[40]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, p. 303.

[41]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, p. 303.

[42]      The Hon Stephen Smith, Minister for Defence and the Hon Jason Clare MP, Minister for Defence Materiel, 'Projects of Concern—Update', 15 October 2010.

[43]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, p. 315.

[44]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, p. 315.

[45]      ANAO Report No. 20 2011–12, 2010–2011 Major Projects Report, p. 207.

[46]      Air Commodore (retired) Bushell, Submission 3, Annex C; and Thomas Newdick, 'German Army Report Highlights NH90 Deficiencies', Defense News, 24 February 2010.

[47]      Stephen Smith MP, Minister for Defence, 'Minister for Defence, Minister for Defence Materiel: Projects of Concern—Update', 1 February 2011. Also see footnote below.

[48]      The Hon Jason Clare MP, Minister for Defence Materiel, 'Minister for Defence and Minister for Defence Materiel—Projects of Concern Update', 28 November 2011, http://www.minister.defence.gov.au/2011/11/28/minister-for-defence-and-minister-for-defence-materiel-projects-of-concern-update-2/ (accessed 30 November 2011).

[49]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, pp. 207-209.

[50]      Defence Materiel Organisation, 'February 2012 Estimates: DMO Statement on Projects of Concern', 9 February 2012, p. 8.

[51]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, p. 318.

[52]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, p. 218.

[53]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, pp. 185–186.

[54]      Committee Hansard, 7 October 2011, pp. 27–28.

[55]      Senate Foreign Affairs, Defence and Trade Legislation Committee, Estimates, Committee Hansard, 30 May 2011, p. 119.

[56]      Committee's visit to South Australia.

[57]      ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, p. 195.

[58]      The Hon Greg Combet MP, Parliamentary Secretary for Defence Procurement, Speech, Defence Watch Luncheon, 22 May 2008.

[59]      ANAO Audit Report No. 34 2011–12, Upgrade of the M113 Fleet of Armoured Vehicles, paragraph 31.

[60]      ANAO Audit Report No. 34 2011–12, Upgrade of the M113 Fleet of Armoured Vehicles, paragraph 47.

[61]      ANAO Audit Report No. 34 2011–12, Upgrade of the M113 Fleet of Armoured Vehicles, paragraph 15.

[62]      ANAO Audit Report No. 34 2011–12, Upgrade of the M113 Fleet of Armoured Vehicles, paragraph 35.

[63]      See Ms Fran Holbert, Committee Hansard, 12 June 2012, p. 3.

[64]      ANAO Audit Report No. 37 2009–10, Lightweight Torpedo Replacement Project, p. 21.

[65]      ANAO, Submission 22, paragraph 19.

[66]      ANAO Audit Report No. 37 2009–10, Lightweight Torpedo Replacement Project, pp. 15–16 and Submission 22, paragraph 19.

[67]      Senator the Hon John Faulkner, Minister for Defence, media release, 'ANAO Audit of Lightweight Torpedo Replacement Project', MIN52/2010, 19 May 2010. http://www.defence.gov.au/minister/90tpl.cfm?CurrentId=10322 (accessed 1 March 2012).

[68]      Senate Foreign Affairs, Defence and Trade Legislation Committee, Estimates, Committee Hansard, 31 May 2011, p. 62.

[69]      Senate Foreign Affairs, Defence and Trade Legislation Committee, Estimates, Committee Hansard, 15 February 2012, p. 72.

[70]      ANAO Submission 22, paragraph 18.

[71]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, paragraph 20.

[72]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, paragraph 2.35.

[73]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, paragraphs 27–28 and 2.48 and Table 8, p. 70.

[74]      Taken from table 8 in ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, p. 70.

[75]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, paragraph 24 and p. 103.

[76]      Air Commodore (retired) Bushell, Supplementary Submission 3D, Executive Summary p. 3.

[77]      Joint Committee of Public Accounts and Audit, Joint Report 429, Review of the 2010-11 Defence Materiel Organisation Major Projects Report, May 2012.

[78]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, paragraph 21.

[79]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, paragraph 21.

[80]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, paragraph 22.

[81]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, paragraph 2.39.

Chapter 3 - Lessons to be learnt

[1]        Dr Andrew Davies, personal capacity, Committee Hansard, 12 August 2011, p. 3.

[2]        Department of Defence, Defence White Paper 2009, paragraphs 9.3–9.4, p. 70.

[3]        Dr Andrew Davies, 'What price the future submarine?', ASPI, 2 March 2012.

[4]        Dr Andrew Davies, personal capacity, Committee Hansard, 12 August 2011, pp. 1–2.

[5]        Peter Lehy, 'Shifting Priorities in National Security: More Security Less Defence', Security Challenges, vol.6, no.2 (Winter 2010), p. 6.

[6]        Derek Woolner, 'Taking the Past in the Future: The Collins Submarine Project and Sea 1000', Security Challenges, vol. 5, no. 3 (Spring 2009), p. 71.

[7]        Mr Derek Woolner, Committee Hansard, 12 June 2012, p. 29.

[8]        Mr Derek Woolner, Committee Hansard, 12 June 2012, p. 30.

[9]        Dr Andrew Davies, Committee Hansard, 12 June 2012, p. 48.

[10]      Dr Richard Brabin-Smith, Committee Hansard, 12 June 2012, p. 48.

[11]      Senate Foreign Affairs, Defence and Trade Legislation Committee, Estimates, Committee Hansard, 31 May 2010, pp. 49-50.

[12]      Minister for Defence and Minister for Defence Materiel, 'Progress of future submarine project', 13 December 2011, http://www.minister.defence.gov.au/2011/12/13/minister-for-defence-and-minister-for-defence-materiel-progress-of-future-submarine-project-2/ (accessed 7 May 2012).

[13]      Andrew Davies and Mark Thomson, 'Mind the gap: getting serious about submarines', ASPI, April 2012, p. 2.

[14]      Andrew Davies and Mark Thomson, 'Mind the gap: getting serious about submarines', ASPI, April 2012, p. 4.

[15]      Prime Minister, Minister for Defence, Minister for Defence Materiel, Joint Media Release—'Next stage of future submarine project announced', 3 May 2012, http://www.minister.defence.gov.au/2012/05/03/prime-minister-minister-for-defence-minister-for-defence-materiel-joint-media-release-next-stage-of-future-submarine-project-announced (accessed 7 May 2012); Vice Admiral Matt Tripovich informed the committee in May 2010 that second pass was 'still about six years away'. Senate Foreign Affairs, Defence and Trade Legislation Committee, Estimates, Committee Hansard, 31 May 2010, p. 46.

[16]      Andrew Davies and Mark Thomson, 'Mind the gap: getting serious about submarines', ASPI, April 2012, p. 6.

[17]      Andrew Davies and Mark Thomson, 'Mind the gap: getting serious about submarines', ASPI, April 2012.

[18]      Andrew Davies and Mark Thomson, 'Mind the gap. getting serious about submarines', ASPI, April 2012.

[19]      Prime Minister, Minister for Defence, Minister for Defence Materiel—Joint Media Release—'Next stage of future submarine project announced', 3 May 2012, http://www.minister.defence.gov.au/2012/05/03/prime-minister-minister-for-defence-minister-for-defence-materiel-joint-media-release-next-stage-of-future-submarine-project-announced/ (accessed 7 May 2012).

[20]      Andrew Davies and Mark Thomson, 'Mind the gap: getting serious about submarines', ASPI, April 2012, p. 19.

[21]      See for example, Mr Innes Willox, Australian Industry Group Defence Council, Committee Hansard, 11 August 2011, p. 17 and Mr John O'Callaghan, Australian Industry Group Defence Council, Committee Hansard, 11 August 2011, p. 16.

[22]      Mr John O'Callaghan, Australian Industry Group Defence Council, Committee Hansard, 11 August 2011, p. 16.

[23]      RAND, Australia's Submarine Design Capabilities and Capacities: Challenges and Options for the Future Submarine, prepared for the Australian Department of Defence, 2011,     pp. xxxviii–xli.

[24]      Dr Andrew Davies, personal capacity, Committee Hansard, 12 June 2012, p. 32.

[25]      See paragraph 3.8 where the committee noted a study to be conducted on the establishment of a land based propulsion systems test facility.

[26]      John Coles, Collins Class Sustainment Review, Phase 1 Report, p. 9.

[27]      RAND, Learning from Experience, Volume IV, Lessons from Australia's Collins Submarine Program, 2011, p. xiii.

[28]      A number of these recommendations were taken from, or based on, RAND, Learning from Experience, Volume IV, Lessons from Australia's Collins Submarine Program, 2011,     pp. xiii–xiv.

[29]      Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper 2009, paragraphs 9.19–9.22.

[30]      Committee Hansard, 5 October 2011, p. 15.

[31]      Committee Hansard, in camera.

[32]      Committee Hansard, in camera.

[33]      Committee Hansard, in camera.

[34]      Committee Hansard, 12 August 2011, p. 11.

[35]      Submission 8, p. [2].

[36]      Mr Ben White, Australian Industry Group Defence Council, Committee Hansard, 11 August 2011, p. 16.

[37]      Mr Christopher Burns, Defence Teaming Centre, Committee Hansard, 11 August 2011, p. 17.

[38]      Mr John O'Callaghan, Australian Industry Group Defence Council, Committee Hansard, 12 June 2012, pp. 27–28.

[39]      Department of Defence, Defence Capability Plan, public version, 2012, p. 210.

[40]      Chris Barrie, 'The Defence White Paper 2009 and Australia's Maritime Capabilities', Security Challenges, vol. 5, no. 2 (Winter 2009), p. 53.

[41]      Chris Barrie, 'The Defence White Paper 2009 and Australia's Maritime Capabilities', Security Challenges, vol. 5, no. 2 (Winter 2009), p. 58.

[42]      Chris Barrie, 'The Defence White Paper 2009 and Australia's Maritime Capabilities', Security Challenges, vol. 5, no. 2 (Winter 2009), p. 58.

[43]      Chris Barrie, 'The Defence White Paper 2009 and Australia's Maritime Capabilities', Security Challenges, vol. 5, no. 2 (Winter 2009), p. 53.

[44]      Australian Strategic Policy Institute, The Cost of Defence. ASPI Defence Budget Brief 2009-10, p. vii.

[45]      Air Chief Marshal Angus Houston, Senate Foreign Affairs, Defence and Trade Legislation Committee, Estimates, Committee Hansard, 3 June 2009, p. 111. See also The Chief of the Defence Force and the Secretary of Defence, 'Strategic Reform Program Media Roundtable' transcript, 16 April 2010, http://www.defence.gov.au/media/SpeechTpl.cfm?CurrentId=10155 (accessed 1 March 2012).

[46]      Mark Thomson, Serving Australia: Control and administration of the Department of Defence, Special Report, Australian Strategic Policy Institute, June 2011, issue 41, p. 41.

[47]      Sean Costello and Andrew Davies, How to buy a submarine: defining and building Australia's future fleet, Australian Strategic Policy Institute, October 2009, p. 2.

[48]      Mark Thomson, Serving Australia: Control and administration of the Department of Defence, Special Report, Australian Strategic Policy Institute, June 2011, issue 41, p. 41.

[49]      Mark Thomson, 'Defence Funding and Planning: Promises and Secrets', Security Challenges, vol. 5, no. 2. (Winter 2009), p. 96.

[50]      Leigh Purnell and Mark Thomson, How much information is enough? The disclosure of defence capability planning information, prepared by the Australian Strategic Policy Institute under contract to the Australian Department of Defence, December 2009, p. 40.

[51]      Mark Thomson, Serving Australia: Control and administration of the Department of Defence, Special Report, Australian Strategic Policy Institute, June 2011, issue 41, p. 41.

[52]      Andrew Davies and Mark Thomson, Submission 8, p. 3.

[53]      Mark Thomson, Serving Australia: Control and administration of the Department of Defence, Special Report, Australian Strategic Policy Institute, June 2011, issue 41, p. 41.

[54]      Dr Richard Brabin-Smith, Submission 2, p. 5.

[55]      Mr Derek Woolner, Submission 34, p. 11.

[56]      Minister for Defence, the Hon. Stephen Smith MP, 'Paper presented to the Australian Strategic Policy Institute', National Gallery, Canberra, 19 July 2011, http://www.minister.defence.gov.au/2011/07/19/paper-presented-by-the-minister-for-defence-stephen-smith-to-the-australian-strategic-policy-institute-national-gallery-canberra/ (accessed 1 December 2011).

[57]      Mark Thomson, The Cost of Defence, ASPI Defence Budget Brief 2011-2012, May 2011, p. viii.

[58]      Minister for Defence, the Hon. Stephen Smith MP, 'Paper presented to the Australian Strategic Policy Institute', National Gallery, Canberra, 19 July 2011.

[59]      Prime Minister, Minister for Defence and Minister for Defence Materiel, Joint Press Conference, Canberra, 3 May 2012, http://www.minister.defence.gov.au/2012/05/03/prime-minister-minister-for-defence-minister-for-defence-materiel-joint-press-conference-canberra-2/ (accessed 19 June 2012).

[60]      Mr David Lewis, Committee Hansard, Estimates, 28 May 2012, p. 6.

[61]      Mark Thomson, The Cost of Defence, ASPI Defence Budget Brief 2012–13, May 2012, p. vii.

[62]      Mark Thomson, The Cost of Defence, ASPI Defence Budget Brief 2012–13, May 2012, p. ix.

[63]      Mark Thomson, The Cost of Defence, ASPI Defence Budget Brief 2012–13, May2012, p. ix.

[64]      Mark Thomson, The Cost of Defence, ASPI Defence Budget Brief 2012–13, May 2012, p. vii.

[65]      Andrew Davies and Mark Thomson, Submission 8, p. 2.

[66]      Major General (retired) Peter Abigail, 'Australia's Next Defence White Paper: An ASPI Update', Address to Global Forces 2011 Conference, 11 August 2011, p. 8,  http://www.aspi.org.au/mp3/conference2011/Abigail_AU_next_defence_white_paper.pdf (accessed 18 January 2012).

[67]      Mark Thomson, The Cost of Defence, ASPI Defence Budget Brief 2012–13, May 2012, p. 118.

[68]      Mark Thomson, The Cost of Defence, ASPI Defence Budget Brief 2012–13, May 2012, p. 119.

[69]      The Returned and Services League of Australia, Submission 5, p. 1.

[70]      Victorian Government, Submission 27, p. 5.

[71]      Victorian Government, Submission 27, p. 5.

[72]      Mark Thomson, Serving Australia. Control and administration in the Department of Defence, Special Report, Australian Strategic Policy Institute, June 2011, issue 41.

[73]      James Brown, 'ADF: Aspirational Defence Force', Lowy Institute for International Policy, 12 May 2011, http://www.lowyinterpreter.org/post/2011/05/12/Force-2030-An-Aspirational-Defence-Force-(ADF).aspx (accessed 23 January 2012).

[74]      Derek Woolner, Submission 34, p. 14.

[75]      Mr Duncan Lewis, Secretary, Committee Hansard, 13 June 2012, p. 21.

[76]      Committee Hansard, 7 October 2011, p. 31.

[77]      Mark Thomson, The Cost of Defence, ASPI Defence Budget Brief 2012–2013, May 2012, p. 119.

Chapter 4 - Challenges for defence procurement

[1]        All organisations face internal and external factors that pose a risk to their objectives. See Standards Australia/Standards New Zealand, Risk Management—Principles and guidelines, AS/NZS ISO 31000:2009, p. iv.

[2]        Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisitions: Managing Risk to Achieve Better Outcomes', 20 January 2010, p. 3.

[3]        Ministry of Defence (UK), The Defence Strategy for Acquisition Reform, Presented to Parliament by the Secretary of State for Defence, February 2010, Foreword by Lord Drayson.

[4]        Ministry of Defence (UK), The Defence Strategy for Acquisition Reform, Presented to Parliament by the Secretary of State for Defence, February 2010, paragraph 1.3, p. 6.

[5]        The DMO engaged the Helmsman Institute to assess the complexity of major Defence acquisitions. Helmsman evaluated 32 projects and delivered its final report in December 2009.

[6]        The Helmsman Institute, A Comparison of Project Complexity between Defence and other Sectors, public release version, p. [3]. ANAO also referred to this study when it acknowledged that major Defence capital acquisitions can be significantly more complex than large civil projects.

[7]        The Helmsman Institute, A Comparison of Project Complexity between Defence and other Sectors, public release version, p. [6].

[8]        See also comments by Dr Andrew Davies, about risk being a constant factor in Defence procurement. Mark Thomson, Andrew Davies and Chris Jenkins, 'Three views of risk: Selecting and acquiring military equipment', ASPI Special Report, November 2011, issue 42, p. 5.

[9]        ibid. See for example, Tzvi Raz and David Hillson 'A Comparative Review of Risk Management Standards', Risk Management: An International Journal, 2005, vol 7, no. 4. p. 53.

[10]      Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper 2009, paragraph 8.53.

[11]      Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper 2009, paragraph 8.56.

[12]      Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper 2009, paragraph 17.1.

[13]      Submission 13, pp. 4–5.

[14]      Submission 2, pp. 3–4.

[15]      Submission 2, p. 3.

[16]      Submission 20, pp. 4–5.

[17]      Committee Hansard, in camera.

[18]      Committee Hansard, in camera.

[19]      Ed F. Blow, CPEng, Senior Associate and Managing Director Nielsen-Wurster Asia-Pacific, 'Managing Risks on Defence Projects Through the Use of CPM Scheduling–A Better Way', Communiqué, vol. 1.4, October 2006, http://www.nielsen-wurster.com/Email_Announcements/NW_Communique/NW_Communique_2006_OCT.html (accessed 2 February 2012).

[20]      Information conveyed during committee's visit to DSTO Edinburgh.

[21]      Private briefing.

[22]      Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper 2009, paragraph 17.2.

[23]      Committee Hansard, Estimates, 3 June 2009, p. 105. See also Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper 2009, paragraph. 1.11.

[24]      Richard Brabin-Smith, attachment to Submission 2, 'Defence and the Need for Independent Policy Analysis', Security Challenges, vol. 6, no. 2 (Winter 2010), p. 10.

[25]      Submission 2, p. 3.

[26]      Submission 2, p. 3.

[27]      Submission 20, p. 4. See also, Mark Thomson, Andrew Davies and Chris Jenkins, 'Three views of risk: Selecting and acquiring military equipment', ASPI Special Report, November 2011, issue 42, p. 10.

[28]      Submission 20, p. 4.

[29]      See also Committee Hansard, 5 October 2011, p. 35.

[30]      See for example, Mark Thomson, Andrew Davies and Chris Jenkins, 'Three views of risk: Selecting and acquiring military equipment', ASPI Special Report, November 2011, issue 42, p. 10.

[31]      Submission 17, p. 6. Two researchers looking at the UK's DoD also noted that 'an underlying assumption or a corporate conspiracy of optimism exists that the largest projects, either public or private, will not be cancelled despite poor project performance'. Young Hoon Kwak and Brian Smith, 'Managing risks in mega defense acquisition projects: Performance, policy, and opportunities', ScienceDirect, International Journal of Project Management, vol. 27 (2009), p. 819.

[32]      Joint Committee of Public Accounts and Audit, Defence major projects report, Committee Hansard, 28 February 2011, p. 11 and Foreign Affairs, Defence and Trade References Committee, Naval shipbuilding in Australia, Committee Hansard, 18 August 2006, pp. 5—51.

[33]      Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper 2009, paragraph 1.3.

[34]      Submission 15, p. [1].

[35]      Submission 13, pp. 4–5.

[36]      Mr Bruce Green, Submission 20, p. 5.

[37]      Submission 22, paragraph 10.

[38]      Submission 13, p. 2.

[39]      Submission 13, p. 3.

[40]      Submission 17, pp. 2–3. See also Richard Brabin-Smith, 'Defence and the Need for Independent Policy Analysis', Security Challenges, vol. 6, no. 2 (Winter 2010), pp. 10, attachment to Submission 2.

[41]      Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper 2009, paragraph 16.20.

[42]      Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper 2009, paragraph 17.4.

[43]      Standing Committee on Foreign Affairs, Defence and Trade, Blue water ships: consolidating past achievements, December 2006, paragraphs 12.28–12.30. In this report, the committee considered the range of views about the connection between the need to construct a platform in Australia and the acquisition of the necessary knowledge, skills, experience and resources to support it throughout its life.

[44]      The Helmsman Institute, A Comparison of Project Complexity between Defence and other Sectors, public release version, [p. 10].

[45]      Standing Committee on Foreign Affairs, Defence and Trade, Blue water ships: consolidating past achievements, December 2006, paragraphs 2.9–2.12.

[46]      Standing Committee on Foreign Affairs, Defence and Trade, Blue water ships: consolidating past achievements, December 2006, paragraph 2.12.

[47]      Submission 21, p. 5.

[48]      Submission 21, p. 6.

[49]      See for example, Bernard Gray, Review of Acquisition for the Secretary of State for Defence, October 2009, p. 64.

[50]      See for example, Bernard Gray, Review of Acquisition for the Secretary of State for Defence, October 2009, p. 66. A 2006 review by the Canadian Chief Review Services noted that the acquisition of capital equipment by the Department of National Defence, Canada, took in the order of 15 years–'a fact that has not changed in over 30 years despite continuous modifications to the acquisition system'. It noted further that Canada's allies also take the same amount of time. Chief Review Services, Canada, Perspectives on the Capital Equipment Acquisition Process, June 2006, no. 1258-150, p. i.

[51]      See for example, Fomin, Pavel, Mazzuchi, Thomas A. Dr; and Sarkani, Shahram Dr, 'Incorporating Maturity Assessment into Quality Functional Deployment for Improved Decision Support Analysis, Risk Management, and Defense Acquisition', Proceedings of the World Congress on Engineering and Computer Science 2009, vol II, WCECS 2009, October 20–22, 2009, San Francisco.

[52]      The Helmsman Institute, A Comparison of Project Complexity between Defence and other Sectors, public release version, p. [6].

[53]      See for example, Rita Creel and Bob Ellison, System-of-Systems Influences on Acquisition Strategy Development, Carnegie Mellon University, 2008, https://buildsecurityin.us-cert.gov/bsi/articles/best-practices/acquisition/981-BSI.html (accessed 4 January 2012).

[54]      Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisitions: Managing Risk to Achieve Better Outcomes', 20 January 2010, p. 2.

[55]      Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisitions: Managing Risk to Achieve Better Outcomes', 20 January 2010, pp. 1–2.

[56]      Office of the Auditor General of Canada, Report of the Auditor General of Canada to the House of Commons, Chapter 6 Acquisition of Military Helicopters, 2010, pp. 2–3.

[57]      United States of America, Department of Defense, Quadrennial Defense Review Report, February 2010, p. 93.

[58]      United States of America, Department of Defense, Quadrennial Defense Review Report, February 2010, p. 76.

[59]      United States of America, Department of Defense, Quadrennial Defense Review Report, February 2010, p. 93.

[60]      United States of America, Department of Defense, Quadrennial Defense Review Report, February 2010, pp. 75–77.

[61]      The new submarine project is such an example, see chapter 3, paragraphs 3.2–3.5.

[62]      The Helmsman Institute, A Comparison of Project Complexity between Defence and other Sectors, public release version, p. [10].

[63]      The Helmsman Institute, A Comparison of Project Complexity between Defence and other Sectors, public release version, p. [10].

[64]      Air Commodore (retired) Bushell, Submission 3, p. 8.

Chapter 5  - Risk management and good governance

[1]        Standards Australia/Standards New Zealand, AS/NZS ISO 31000:2009, Risk management—Principles and guidelines, 2009, paragraph A3.5. The literature on risk management as a discipline and 'a core area of business' is extensive. See for example: Economist Intelligence Unit, Best practice in risk management: A function comes of age, A report from the Economist Intelligence Unit sponsored by ACE, IBM and KPMG, 2007; Economist Intelligence Unit, Closing the gap: The link between project management excellence and long-term success, A report from the Economist Intelligence Unit, sponsored by Oracle, October 2009; and Economist Intelligence Unit, Better information, better decisions: The risk and compliance challenge for financial institutions, A report from the Economist Intelligence Unit, sponsored by SAP, December 2010.

[2]        Comcover, Better Practice Guide, Risk Management, Commonwealth of Australia, June 2008, p. 5.

[3]        Derek Woolner, 'Why Australia's defence procurement is lacking military precision', The Conversation, 5 July 2011, https://theconversation.edu.au/why-australias-defence-procurement-is-lacking-military-precision-2136  (accessed 2 July 2012).

[4]        Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisitions: Managing Risk to Achieve Better Outcomes, 20 January 2010, p. 1.

[5]        United States of America, Department of Defense, Quadrennial Defense Review Report, February 2010, p. 93.

[6]        United States of America, Department of Defense, Quadrennial Defense Review Report, February 2010.

[7]        Office of the Auditor General of Canada, Report of the Auditor General of Canada to the House of Commons, Chapter 6 Acquisition of Military Helicopters, 2010, p. 25.

[8]        See for example, Tzvi Raz and David Hillson 'A Comparative Review of Risk Management Standards', Risk Management: An International Journal 2005, vol 7, no. 4; Department of Defence, Defence Science and Technology Organisation, Svetoslav Gaidow and Seng Boey, Australian Defence Risk Management Framework: A Comparative Study, Commonwealth of Australia, 2005.

[9]        See for example, Tzvi Raz and David Hillson 'A Comparative Review of Risk Management Standards', Risk Management: An International Journal 2005, vol 7, no. 4.

[10]      Attorney-General's Department, Commonwealth Procurement Guidelines, Commonwealth of Australia, December 2008, paragraph 6.8.

[11]      Attorney-General's Department, Commonwealth Procurement Guidelines, Commonwealth of Australia, December 2008, paragraph 6.7.

[12]      Committee Hansard, in camera. See also, Australian Industry Group Defence Council who indicated that although fundamental structures were about right, further attention needed to be given to earlier identification of risk associated with complex acquisitions. It recommended that Defence invest in Research and Development (R&D) early in the Capability Development process, with the Defence Science and Technology Organisation (DSTO) and industry working fully in partnership to realise the benefits. Submission 10, pp. 4–5. The ANAO found that 'Inadequate execution of the capability definition and planning phase unduly exposes Defence to the possibility of cost increases, capability reduction and schedule slippage'. Submission 22, paragraph 16.

[13]      For example see Ian McPhee, Deputy Auditor-General for Australia, 'Risk Management and Governance', Speech, National Institute for Governance, Canberra, 16 October 2002, p. 2; Department of Defence, DSTO, Svetoslav Gaidow and Seng Boey, Australian Defence Risk Management Framework: A Comparative Study, Commonwealth of Australia, 2005; Economist Intelligence Unit, Closing the gap: The link between project management excellence and long-term success, A report from the Economist Intelligence Unit, sponsored by Oracle, October 2009; Department of Defense, Risk Management Guide for DoD Acquisition, sixth edition, August 2006, paragraph 1.3; and Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisition: Managing Risk to Achieve Better Outcomes', 20 January 2010, p. 2.

[14]      Fomin, Pavel, Mazzuchi, Thomas A. and Sarkani, Shahram, 'Incorporating Maturity Assessment into Quality Functional Deployment for Improved Decision Support Analysis, Risk Management, and Defense Acquisition', Proceedings of the World Congress on Engineering and Computer Science 2009, vol II, WCECS 2009, October 20–22, 2009, San Francisco. This definition was taken from DoD Risk Management Guide, 2006; and Tzvi Raz and David Hillson 'A Comparative Review of Risk Management Standards', Risk Management: An International Journal 2005, vol 7, no. 4.

[15]      See for example, Ian McPhee, Deputy Auditor-General for Australia, 'Risk Management and Governance', Speech, National Institute for Governance, Canberra, 16 October 2002, p. 2; Department of Defence, Defence Science and Technology Organisation, Svetoslav Gaidow and Seng Boey, Australian Defence Risk Management Framework: A Comparative Study, Commonwealth of Australia, 2005; and Standards Australia, Delivering assurance based in ISO 31000:2009 Risk Management—Principles and guidelines, HB 158–2010, paragraph 1.2.

[16]      See for example, Tzvi Raz and David Hillson 'A Comparative Review of Risk Management Standards', Risk Management: An International Journal 2005, vol 7, no. 4.

[17]      See for example, Young Hoon Kwak and Brian Smith, 'Managing risks in mega defense acquisition projects: Performance, policy, and opportunities', ScienceDirect, International Journal of Project Management, vol. 27 (2009), pp. 812–820.

[18]      Department of Defence, Defence Procurement Policy Manual, Mandatory Procurement Guidance for Defence and DMO Staff, Commonwealth of Australia, July 2011, p. 3.2–1.

[19]      Standards Australia/Standards New Zealand, Risk Management—Principles and guidelines, AS/NZS ISO 31000:2009.

[20]      Department of Defence, Defence Procurement Policy Manual, Mandatory Procurement Guidance for Defence and DMO Staff, Commonwealth of Australia, 1 July 2011, p. 3.2–1.

[21]      Department of Defence, Defence Procurement Policy Manual, Mandatory Procurement Guidance for Defence and DMO Staff, Commonwealth of Australia, July 2011, paragraph 3, p. 3.2–1.

[22]      Department of Defence, Defence Procurement Policy Manual, Mandatory Procurement Guidance for Defence and DMO Staff, Commonwealth of Australia, July 2011, paragraph 6, p. 3.2–1.

[23]      Committee Hansard, 7 October 2011, p. 13.

[24]      Defence Capability Development Handbook, Commonwealth of Australia, August 2011, paragraph 1.1.6.

[25]      Defence Capability Development Handbook, Commonwealth of Australia, August 2011, paragraph 1.3.3.

[26]      Department of Defence, Defence Procurement Policy Manual, Mandatory Procurement Guidance for Defence and DMO Staff, 1 July 2011, paragraph 2, p. 3.2–1.

Chapter 6 - Compliance and awareness

[1]        The Helmsman Institute, A Comparison of Project Complexity between Defence and other Sectors, public release version, p. [11–13].

[2]        Chris Maughan, 'Risk Management in Defence Procurement', RUSI Defence Systems, June 2010, p. 95. A former Royal Navy officer, Chris Maughan is a Managing Consultant with Decision Analysis Services Ltd, and since 1989 has been responsible as project manager for the delivery of risk, project management and technical due diligence support to a number of major programs for clients worldwide.

[3]        Chris Maughan, 'Risk Management in Defence Procurement', RUSI Defence Systems, June 2010, p. 96.

[4]        Dr Neumann, Committee Hansard, 13 June 2012, p. 3.

[5]        Committee Hansard, 13 June 2012, p. 3.

[6]        See for example, Ian McPhee, Deputy Auditor-General for Australia, 'Risk Management and Governance', Speech, National Institute for Governance, Canberra, 16 October 2002, p. 2; Department of Defence, Defence Science and Technology Organisation, Svetoslav Gaidow and Seng Boey, Australian Defence Risk Management Framework: A Comparative Study, Commonwealth of Australia, 2005; and Standards Australia, Delivering assurance based in ISO 31000:2009 Risk Management—Principles and guidelines, HB 158–2010, paragraph 1.2.

[7]        Submission 16, p. 1.

[8]        Submission 16, p. 2.

[9]        Submission 16, p. 2.

[10]      Submission 19, p. 3.

[11]      ANAO Audit Report No. 48 2008–09, Planning and Approval of Defence Major Capital Equipment Projects, 2009, paragraph 11.

[12]      Department of Defence/Defence Materiel Organisation, DMO Project Management Manual, (PMM) 2009, 10 August 2009, paragraph 7.11.

[13]      Department of Defence/Defence Materiel Organisation, DMO Project Management Manual, (PMM) 2009, 10 August 2009, paragraph 7.11.

[14]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 3.2.16.

[15]      2008 Audit of the Defence Budget, Commonwealth of Australia, 3 April 2009 (Pappas Report), pp. 82–83.

[16]      ANAO Audit Report No. 57 2010–11, Acceptance into Service of Navy Capability, 2011, paragraph 7.60.

[17]      Committee Hansard, 11 August 2011, p. 24.

[18]      See for example, ANAO Report No. 17 2010–11, 2009–10 Major Projects Report, paragraph 31 and ANAO Report No. 20 2011–12, 2010–2011 Major Projects Report, paragraph 42.

[19]      Standards Australia/Standards New Zealand, Risk Management—Principles and guidelines, AS/NZS ISO 31000:2009.

[20]      For example see Ian McPhee, Deputy Auditor-General for Australia, 'Risk Management and Governance', Speech, National Institute for Governance, Canberra, 16 October 2002, p. 20.

[21]      Committee Hansard, 12 August 2011, p. 15.

[22]      Department of Defence, DMO Project Management Manual DMM (PMM) 2009, Interim, August 2009, paragraph 7.3.

[23]      Department of Defence, DMO Project Management Manual DMM (PMM) 2009, Interim, August 2009, paragraph 7.5.

[24]      Committee Hansard, 11 August 2011, p. 24.

[25]      Department of Defence, 2008 Audit of the Defence Budget, 3 April 2009, pp. 3 and 82.

[26]      Committee Hansard, 7 October 2011, pp. 25–26.

[27]      Committee Hansard, 7 October 2011, p. 26.

[28]      Department of Defence, Plan to Reform Support Ship Repair and Management Practices, July 2011, p. 10. Mr Rizzo recognised that risk management should be 'a central function in Defence'.

[29]      See for example, Tzvi Raz and David Hillson 'A Comparative Review of Risk Management Standards', Risk Management: An International Journal 2005, vol. 7, no. 4.

[30]      Committee Hansard, 5 October 2011, p. 56.

[31]      Committee Hansard, in camera.

[32]      Submission 16, p. 2.

[33]      Standards Australia/Standards New Zealand, Risk Management—Principles and guidelines, AS/NZS ISO 31000:2009, paragraph 5.6.

[34]      Committee Hansard, 12 June 2012, p. 35.

[35]      Dr Neumann, and Mr Irving, Committee Hansard, 13 June 2012, pp. 16–17.

[36]      Committee Hansard, 13 June 2012, p. 17.

[37]      Committee Hansard, 13 June 2012, p. 17.

[38]      Standards Australia/Standards New Zealand, Risk Management—Principles and guidelines, AS/NZS ISO 31000:2009, paragraph 5.7.

Chapter 7  - Responsibility and accountability

[1]        Standards Australia/Standards New Zealand, Risk Management—Principles and guidelines, AS/NZS ISO 31000:2009, paragraph A.3.2.

[2]        Department of Defence, Plan to Reform Support Ship Repair and Management Practices, July 2011, p. 9.

[3]        Department of Defence, Procurement Review 2003, pp. 10–11.

[4]        Department of Defence, Procurement Review 2003, p. 11.

[5]        Department of Defence, Procurement Review 2003, p. 48.

[6]        Department of Defence, Submission 21, p. 13.

[7]        Department of Defence, Review of the Defence Accountability Framework, January 2011, p. 9.

[8]        Department of Defence, Review of the Defence Accountability Framework, January 2011, pp. 9–10.

[9]        Department of Defence, Review of the Defence Accountability Framework, January 2011, p. 15.

[10]      Minister for Defence—Press Conference—Black Review, 9 August 2011, p. 10 of 15, http://www.minister.defence.gov.au/2011/08/09/minister-for-defence-press-conference-black-review-9-august-2011/ (accessed 24 April 2012).

[11]      Confidential Submission, p. 42.

[12]      Minister for Defence—Press Conference—Black Review, 9 August 2011, p. 10 of 15, http://www.minister.defence.gov.au/2011/08/09/minister-for-defence-press-conference-black-review-9-august-2011/ (accessed 24 April 2012).

[13]      Committee Hansard, 7 October 2011, p. 55.

[14]      Committee Hansard, 11 August 2011, p. 33.

[15]      Department of Defence, Submission 21, p. 13.

[16]      Department of Defence, Defence Capability Development Handbook, Commonwealth of Australia, 2011, paragraphs 1.5.3–1.5.15 and pp. 106 and 109.

[17]      Committee Hansard, in camera.

[18]      Committee Hansard, 5 October 2011, p. 12. See also Department of Defence, Defence Capability Development Handbook, August 2011, paragraphs 1.5.5–1.5.8 and p. 106.

[19]      Department of Defence, Submission 21, p. 8.

[20]      Committee Hansard, 5 October 2011, p. 57.

[21]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 1.4.14.

[22]      Committee Hansard, 5 October 2011, pp. 11 and 17 and 7 October 2011, pp. 15–20, 29, 30. Capability managers are on the Project Stakeholder Group, present at the Options Review Board, invited to the Gate reviews; clear all submissions that go to government in terms of the capability and co-sign the MAA.

[23]      Department of Defence, Procurement Review 2003, p. vi.

[24]      Department of Defence, Procurement Review 2003, p. 24.

[25]      Department of Defence, Procurement Review 2003, p. 24.

[26]      Department of Defence, Procurement Review 2003, p. 26.

[27]      Department of Defence, Procurement Review 2003, p. vi.

[28]      DMO, Going to the Next Level, the report of the Defence Procurement and Sustainment Review, 2008, recommendation 2.6, p. 23.

[29]      Department of Defence, The Response to the Report of the Defence Procurement and Sustainment Review, The Mortimer Review, p. 23.

[30]      Defence Materiel Organisation, Going to the Next Level, the report of the Defence Procurement and Sustainment Review, 2008, recommendation 3.1, p. 32.

[31]      Department of Defence, The Response to the Report of the Defence Procurement and Sustainment Review, The Mortimer Review, p. 26.

[32]      Defence Materiel Organisation, Going to the Next Level, the report of the Defence Procurement and Sustainment Review, 2008, recommendation 3.2, p 34.

[33]      Department of Defence, The Response to the Report of the Defence Procurement and Sustainment Review, The Mortimer Review, p. 26.

[34]      Department of Defence, Plan to Reform Support Ship Repair and Management Practices, July 2011, p. 15.

[35]      Committee Hansard, in camera. See also Dr Neumann, Committee Hansard, 13 June 2012, p. 8 and Air Commodore (retired) Bushell who argued that, 'Today, the Service Chiefs no longer manage their Services, they merely administer them to meet imperatives (priorities) dictated by Defence. They do not have command and control of their Services, are not organised to manage their Services, and do not have the resources needed to discharge their accountabilities'. Submission 3, p. 9.

[36]      Committee Hansard, 12 August 2011, p. 9.

[37]      Air Marshal Binskin, Committee Hansard, 5 October 2011, p. 16.

[38]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 3.2.1.

[39]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraphs 1.5.15, 3.4.50 and 4.3.23.

[40]      Department of Defence, Procurement Review 2003, p. 25.

[41]      Department of Defence, Procurement Review 2003, p. 24.

[42]      Department of Defence, Procurement Review 2003, p. 25.

[43]      Defence Materiel Organisation, Going to the Next Level, the report of the Defence Procurement and Sustainment Review, 2008, recommendation 3.14.

[44]      Department of Defence, The Response to the Report of the Defence Procurement and Sustainment Review, The Mortimer Review, p. 31.

[45]      Department of Defence, The Response to the Report of the Defence Procurement and Sustainment Review, The Mortimer Review, p. 31.

[46]      ANAO Audit Report No. 57 2010–11, Acceptance into Service of Navy Capability, 2011, paragraph 29.

[47]      ANAO Audit Report No. 57 2010–11, Acceptance into Service of Navy Capability, 2011, paragraph 30.

[48]      ANAO Audit Report No. 57 2010–11, Acceptance into Service of Navy Capability, 2011, paragraph 30.

[49]      ANAO Audit Report No. 57 2010–11, Acceptance into Service of Navy Capability, 2011, paragraph 33.

[50]      ANAO Audit Report No. 57 2010–11, Acceptance into Service of Navy Capability, 2011, Paragraph 30.

[51]      Supplementary Submission 22A, p. 1.

[52]      Supplementary Submission 22A, p. 2.

[53]      Department of Defence, 2008 Audit of the Defence Budget, 3 April 2009, p. 55.

[54]      Plan to Reform Support Ship Repair and Management Practices, July 2011, p. 67.

[55]      See for example, Air Commodore (retired) Bushell, Submission 3, p. 1 and Miller Costello and Co, Submission 30, p. 2.

[56]      Committee Hansard, 12 August 2011, p. 5.

[57]      Committee Hansard, 12 August 2011, p. 7.

[58]      Miller Costello and Co, Submission 30, p. 2

[59]      Confidential Submission.

[60]      Confidential Submission.

[61]      Confidential Submission.

[62]      Confidential Submission.

[63]      Confidential Submission.

[64]      Submission 3, p. 1.

[65]      Department of Defence, Submission 21, p. 14.

[66]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraphs 3.5.1–3.5.2.

[67]      Committee Hansard, 7 October 2011, pp. 16, 55.

[68]      ANAO Submission 22, paragraph 59.

[69]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 3.4.48. The handbook states further in the same paragraph 'The responsibility for developing the MAA lies with the CS Div Desk Officer (in conjunction with DMO Emerging Project Team if constituted) in consultation with the CM and DMO Systems Program Office (SPO)'.

[70]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 4.3.22.

[71]      Committee Hansard, 5 October 2011, p. 41.

[72]      Committee Hansard, 7 October 2011, p. 16.

[73]      Committee Hansard, 5 October 2011, p. 57. Air Marshal Harvey repeated this statement that the capability manager is the 'ultimate customer for the capability'—that they have 'a strong say throughout the process' in Committee Hansard, 7 October 2011, p. 15.

[74]      Submission 22, p. 11.

[75]      Submission 22, p. 11.

[76]      ANAO Audit Report No. 57 2010–11, Acceptance into Service of Navy Capability, 2011, paragraph 22.

[77]      Confidential Submission.

[78]      Department of Defence, Defence Annual Report 2008–09, Volume Two, Defence Materiel Organisation, p. 80.

[79]      Confidential Submission.

[80]      Submission 41, paragraph 25.

[81]      Submission 41, paragraph 25.

[82]      Department of Defence, Review of the Defence Accountability Framework, January 2011, p. 15.

[83]      Defence Materiel Organisation, Going to the Next Level, the report of the Defence Procurement and Sustainment Review, 2008, recommendation 3.5.

[84]      Department of Defence, The Response to the Report of the Defence Procurement and Sustainment Review, The Mortimer Review, p. 28.

[85]      Confidential Submission.

[86]      Attachment A to submission 21. ACAT I describes projects that are major capital equipment acquisitions and are normally the ADF’s most strategically significant. They are characterised by extensive project and schedule management complexity and very high levels of technical, operating, or support difficulties, and highly complex commercial arrangements. ACAT II describes projects that are major capital equipment acquisitions and are strategically significant to the ADF. They are characterised by significant project and schedule management complexity and high levels of technical, operating, or support difficulty, and complex commercial arrangements. Information taken from Department of Defence, Defence Capability Plan, Public version, 2012, p. 7.

[87]      Committee Hansard, in camera.

[88]      Committee Hansard, 11 August 2011, p. 6.

[89]      Submission 19, p. 5.

[90]      Mr Johnston, Committee Hansard, 13 June 2012, p. 8.

[91]      Committee Hansard, 13 June 2012, p. 9 and also p. 12.

[92]      Also see paragraphs 6.29–6.30 which refer to Defence's procurement as process bound and people getting 'bogged down with too much paper work'.

[93]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, p. 318. Also see paragraphs 2.44–2.45 of the committee's report.

[94]      Committee Hansard, 12 June 2012, p. 32.

[95]      Supplementary Submission 3F, p. 4.

[96]      Supplementary Submission 3F, p. 4.

Chapter 8 - Communication, integration and collaboration

[1]        Stephen Smith MP, Minster for Defence, Address to the Department of Defence Senior Leadership Group, Hotel Realm, Canberra, 26 November 2010,  http://www.minister.defence.gov.au/2010/11/26/address-to-the-department-of-defence-senior-leadership-group/ (accessed 16 April 2012).

[2]        Minister for Defence—Press Conference—Black Review, Transcription, 9 August 2011, p. 9 of 15, http://www.minister.defence.gov.au/2011/08/09/minister-for-defence-press-conference-black-review-9-august-2011/ (accessed 24 April 2012).

[3]        Paragraphs 7.3–7.5.

[4]        Confidential Submission. Another witness referred to Defence being a number of different organisations operating inside 'that bubble of Defence', Committee Hansard, in camera.

[5]        Department of Defence, Procurement Review 2003, p. 48.

[6]        Department of Defence, Procurement Review 2003, p. 48.

[7]        Department of Defence, Procurement Review 2003, p. 6.

[8]        Department of Defence, The Response to the Report of the Defence Procurement and

Sustainment Review, 2009, p. 17, http://www.defence.gov.au/publications/Mortimer_Review_Response.pdf (accessed 16 April 2012). 

[9]        Department of Defence, Defence White Paper 2009, paragraphs 8.74 and 13.12.

[10]      Department of Defence, Strategy Framework 2010, p. 39.

[11]      Department of Defence, Strategy Framework 2010, pp. 39–40.

[12]      Department of Defence, Submission 21, p. 16.

[13]      Graham Priestnall, Australian Industry and Defence Network Inc, Committee Hansard, 11 August 2011, p. 20.

[14]      Henry Ergas and Mark Thomson, 'More Guns without Less Butter: Improving Australia's Defence Efficiency', Agenda, ANU College of Business and Economics, vol. 18, no. 3, 2011, http://epress.anu.edu.au/apps/bookworm/view/Agenda%2C+Volume+18%2C+Number+3%2C+2011/7641/Text/ergasthompson.html#toc_marker-9 (accessed 20 January 2012).

[15]      Stephan Frühling, 'The Missing Link: Politics, Strategy and Capability Priorities', Security Challenges, vol. 5, no. 2, (Winter 2009), p. 50.

[16]      Department of Defence, 2008 Audit of the Defence Budget, 3 April 2009, p. 53.

[17]      Department of Defence, Review of the Defence Accountability Framework, January 2011, pp. 54–55.

[18]      Department of Defence, Review of the Defence Accountability Framework, January 2011, p. 55.

[19]      Stephen Smith MP, Minister for Defence, 'Improving personal and institutional accountability in Defence', 9 August 2011, http://www.minister.defence.gov.au/2011/08/09/improving-personal-and-institutional-accountability-in-defence/ (accessed 24 April 2012).

[20]      Chief Operating Officer, Chief Finance Officer, Chief Information Officer, Deputy Secretaries for Defence People, Intelligence and Security, Strategy, Defence Support, SRP, Special Advisor Strategic Reform and Governance, Chief Defence Scientist, CEO, DMO and three general managers in DMO.

[21]      Confidential Submission.

[22]      Submission 15, p. [8].

[23]      Committee Hansard, in camera.

[24]      Confidential Submission. For an indication of the divisions that existed within Defence during 1960s and 1970s see Sir Arthur Tange, Defence Policy-making: A Close-up View, 1950–1980, A Personal Memoir, Canberra, 2008.

[25]      Committee Hansard, 11 August 2011, p. 25.

[26]      Committee Hansard, 5 October 2011, p. 49.

[27]      Committee Hansard, 5 October 2011, p. 49.

[28]      Committee Hansard, 5 October 2011, p. 49.

[29]      Committee Hansard, 11 August 2011, p. 29.

[30]      Submission 20, p. 3.

[31]      Submission 20, p. 2.

[32]      Committee Hansard, 12 June 2012, p. 38.

[33]      ANAO, Audit Report No. 57 2010–11, Acceptance into Service of Navy Capability, paragraph 29.

[34]      ANAO, Audit Report No. 57 2010–11, Acceptance into Service of Navy Capability, paragraph 33 and Committee Hansard, 11 August 2011, p. 24.

[35]      ANAO, Audit Report No. 57 2010–11, Acceptance into Service of Navy Capability, paragraph 33.

[36]      Department of Defence, The Response to the Report of the Defence Procurement and Sustainment Review, Government response to Mortimer's Recommendation 3.2—'As a fundamental principle, oversight and coordination of all elements necessary for the introduction of a capability should be exercised by the relevant Capability Manager', p. 26.

[37]      Department of Defence, 2008 Audit of the Defence Budget, 3 April 2009, p. 56.

[38]      Department of Defence, 2008 Audit of the Defence Budget, 3 April 2009, p. 57.

[39]      Committee Hansard, 5 October 2011, pp. 16 and 17.

[40]      Committee Hansard, 7 October 2011, p. 54.

[41]      Committee Hansard, 7 October 2011, p. 55.

[42]      Committee Hansard, 7 October 2011, p. 15.

[43]      Committee Hansard, 7 October 2011, p. 16.

[44]      Committee Hansard, 7 October 2011, p. 17.

[45]      Confidential Submission, p. 21.

[46]      Parliamentary Joint Committee on Foreign Affairs, Defence and Trade, Committee Hansard, 16 March 2012, p. 51.

[47]      Supplementary Submission 21B.

[48]      Parliamentary Joint Committee on Foreign Affairs, Defence and Trade, Committee Hansard, 16 March 2012, p. 50.

[49]      Committee Hansard, 13 June 2012, p. 27.

[50]      Parliamentary Joint Committee on Foreign Affairs, Defence and Trade, Committee Hansard, 16 March 2012, p. 50.

[51]      Parliamentary Joint Committee on Foreign Affairs, Defence and Trade, Committee Hansard, 16 March 2012, p. 50.

[52]      Supplementary Submission 3F, p. [5].

[53]      Stephen Smith MP, Minister for Defence, 'Improving personnel and institutional accountability in Defence', 9 August 2011, http://www.minister.defence.gov.au/2011/08/09/improving-personal-and-institutional-accountability-in-defence/ (accessed 1 February 2012).

[54]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 3.2.13(i).

[55]      Department of Defence, 2008 Audit of the Defence Budget, 3 April 2009, p. 82.

[56]      Department of Defence, 2008 Audit of the Defence Budget, 3 April 2009, p. 82. The audit recommended that technical scrutineers be involved in ongoing measurement and management of technical risk.

[57]      Department of Defence, 2008 Audit of the Defence Budget, 3 April 2009, p. 50.

[58]      Supplementary Submission 21B.

[59]      Department of Defence, 2008 Audit of the Defence Budget, 3 April 2009, p. 82.

[60]      Evidence taken during private briefing with Defence.

[61]      Submission 6, p. 5.

[62]      Committee Hansard, in camera, p. 19 and information obtained during committee's visit to South Australia and Western Australia.

[63]      See for example paragraphs 2.6–2.7; 2.19; 2.27–2.30; 2.46 (MRH-90 Helicopter); 2.49–2.51; and 2.76.

Chapter 9 - An informed organisation—contestability

[1]        Stephen Smith MP, Minister for Defence, 'Minister for Defence—Press Conference—Black Review', Transcript, 9 August 2011, http://www.minister.defence.gov.au/2011/08/09/minister-for-defence-press-conference-black-review-9-august-2011/  (accessed 24 February 2012).

[2]        Hugh White, 'A Wobbly Bridge: Strategic Interests and Objectives in Force 2030', Security Challenges, vol. 5, no. 1, (Winter 2009), p. 29.

[3]        See paragraphs 3.2–3.13 and 3.18.

[4]        Rufus Black, Review of the Defence Accountability Framework, Department of Defence, January 2011, p. 51.

[5]        Andrew Davies and Mark Thomson, Submission 8.

[6]        Australian Industry Group Defence Council, Submission 10, pp. [15-16].

[7]        Andrew Davies, Let's test that idea—contestability of advice in the Department of Defence, Australian Strategic Policy Institute, 22 January 2010, p. 5.

[8]        Andrew Davies, Committee Hansard, 12 June 2012, p. 43.

[9]        'Changing the Structure of Defence', Asia-Pacific Defence Reporter, 2 September 2011, http://www.asiapacificdefencereporter.com/articles/177/Changing-the-structure-of-Defence (accessed 2 April 2012).

[10]      Richard Brabin-Smith, Submission 2, Attachment 1.

[11]      Defence Efficiency Review, 'Future Directions for the Management of Australia's Defence', 10 March 2007, p. 24, http://www.defence.gov.au/minister/der/report.pdf (accessed 2 April 2012).

[12]      Alan Behm, 'Defence lacks solutions', The Australian, 11 March 2008, http://www.theaustralian.com.au/news/opinion/defence-lacks-solutions/story-e6frg7ef-1111115762336 (accessed 2 April 2012).

[13]      Andrew Davies, Let's test that idea—contestability of advice in the Department of Defence, Australian Strategic Policy Institute, 22 January 2010, p. 6.

[14]      Andrew Davies and Mark Thomson, Submission 8, p. [2]. See also Richard Brabin-Smith, Submission 2, Attachment 1, p. 13.

[15]      Andrew Davies, Committee Hansard, 12 June 2012, p. 43.

[16]      Richard Brabin-Smith, Committee Hansard, 12 June 2012, p. 42.

[17]      John O'Callaghan, Australian Industry Group, Committee Hansard, 12 June 2012, p. 44.

[18]      Derek Woolner, Committee Hansard, 12 June 2012, pp. 44–45.

[19]      Confidential Submission, p. 48.

[20]      General David Hurley, CDF, Committee Hansard, 13 June 2012, p. 22. See also Defence's Supplementary Submission, 21B.

[21]      Committee Hansard, 7 October 2011, p. 21.

[22]      Department of Defence, Review of the Defence Accountability Framework, January 2011, p. 51.

[23]      Department of Defence, Review of the Defence Accountability Framework, January 2011, p. 51.

[24]      Stephen Smith MP, Minister for Defence, 'Improving personal and institutional accountability in Defence', 9 August 2011, http://www.minister.defence.gov.au/2011/08/09/improving-personal-and-institutional-accountability-in-defence/ (accessed 1 February 2012).

[25]      Stephen Smith MP, Minister for Defence, 'Improving personnel and institutional accountability in Defence', 9 August 2011, http://www.minister.defence.gov.au/2011/08/09/improving-personal-and-institutional-accountability-in-defence/ (accessed 1 February 2012).

[26]      David Ellery, 'Position retreat a win for Defence leadership group', Canberra Times, 11 May 2012, http://www.canberratimes.com.au/national/position-retreat-a-win-for-defence-leadership-group-20120510-1yfsk.html (accessed 15 May 2012).

Chapter 10 - Contest of ideas and independent advice

[1]        Stephen Smith MP, Minister for Defence, 'Minister for Defence—Press Conference—Black Review', 9 August 2011, http://www.minister.defence.gov.au/2011/08/09/minister-for-defence-press-conference-black-review-9-august-2011/  (accessed 4 April 2012).

[2]        Defence Materiel Organisation, Going to the Next Level, the report of the Defence Procurement and Sustainment Review, Commonwealth of Australia, 2008, p. 35.

[3]        Submission 21, p. 17. Air Marshal Harvey informed the committee that Defence had established 'a comprehensive series of internal quality assurance processes through the committees, working groups, stakeholder groups and gate reviews'. They examine each project's capability, cost, schedule and risk. Committee Hansard, 7 October 2011, p. 2.

[4]        Stephen Smith MP, Minister for Defence, 'Minister for Defence Stephen Smith and Minister for Defence Materiel Jason Clare—Independent Project Performance Office to oversee major Defence projects established', Media Release, 29 June 2011, http://www.minister.defence.gov.au/2011/06/29/minister-for-defence-stephen-smith-and-minister-for-defence-materiel-jason-clare-independent-project-performance-office-to-oversee-major-defence-projects-established-2/ (accessed 3 April 2012). The boards also implement the new Early Indicator and Warning system and implement the reforms to the Project of Concern process and oversee the remediation of all Projects of Concern.

[5]        ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, Part 2, DMO Major Projects Report, paragraph 1.56.

[6]        See Department of Finance and Administration, Guidance on the Gateway Review Process—A Project Assurance Methodology for the Australian Government, Financial Management Guidance FMG 20, August 2006, p. 4.

[7]        Department of Finance and Administration, Guidance on the Gateway Review Process—A Project Assurance Methodology for the Australian Government, Financial Management Guidance FMG 20, August 2006, pp. 4 and 13.

[8]        Department of Finance and Administration, Guidance on the Gateway Review Process—A Project Assurance Methodology for the Australian Government, Financial Management Guidance FMG 20, August 2006, p. 5.

[9]        Department of Finance and Administration, Guidance on the Gateway Review Process—A Project Assurance Methodology for the Australian Government, Financial Management Guidance FMG 20, August 2006, p. 12.

[10]      Defence Materiel Organisation, Going to the Next Level, the report of the Defence Procurement and Sustainment Review, Commonwealth of Australia, 2008, p. 35.

[11]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 3.4.2.

[12]      ANAO Report No 20. 2011–12, 2010–11 Major Projects Report, paragraph 44, p. 26 and Part 2, paragraph 1.54, p. 126.

[13]      Confidential Submission.

[14]      Committee Hansard, 7 October 2011, p. 29.

[15]      ANAO Report No. 17 2010–11, 2009–10 Major Projects Report, paragraph 1.54, p. 93.

[16]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, paragraph 3.7.

[17]      Committee Hansard, 7 October 2011, p. 30.

[18]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, paragraph 3.5, p. 82. Mr King described the two independent members as 'people who have had a lot of industry experience or military experience, or whatever'. Committee Hansard, 7 October 2011, p. 12.

[19]      Mr Warren King, Committee Hansard, 7 October 2011, p. 30.

[20]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, paragraph 1.55, p. 126.

[21]      Committee Hansard 7 October 2011, p. 29.

[22]      Submission 22, pp. 10–11.

[23]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, Part 2, DMO Major Projects Report, Part 2, paragraph 1.57, p. 126.

[24]      Committee Hansard, 7 October 2011, p. 18.

[25]      Committee Hansard, 13 June 2012, p. 14.

[26]      Stephen Smith MP, Minister for Defence, 'Strategic Reform Program', 6 May 2011, http://www.minister.defence.gov.au/2011/05/06/strategic-reform-program/ (accessed 3 April 2012) and ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, Part 2, DMO Major Projects Report, p. 101.

[27]      Committee Hansard, 7 October 2011, p. 26.

[28]      Committee Hansard, 7 October 2011, p. 12.

[29]      ANAO Report No. 20 2011–12, 2010–11 Major Projects Report, paragraph 3.7, p. 82 and Mr Warren King, Committee Hansard, 7 October 2011, p. 29.

[30]      Committee Hansard, 7 October 2011, p. 29.

[31]      Committee Hansard, 12 August 2011, p. 14.

[32]      Committee Hansard, 13 June 2012, p. 2.

[33]      Committee Hansard, 13 June 2012, p. 10.

[34]      Committee Hansard, 13 June 2012, p. 3.

[35]      Confidential Submission.

[36]      Confidential Submission.

[37]      Confidential Submission.

[38]      Confidential Submission.

[39]      Submission 17, p. 3.

[40]      ANAO Audit Report No. 52 2011–12, Gate Reviews for Defence Capital Acquisition Projects, paragraph 3.78.

[41]      Department of Finance and Administration, Guidance on the Gateway Review Process—A Project Assurance Methodology for the Australian Government, Financial Management Guidance FMG 20, August 2006, p. 5.

[42]      ANAO Audit Report No. 52 2011–12, Gate Reviews for Defence Capital Acquisition Projects, paragraph 3.78.

[43]      ANAO Audit Report No. 52 2011–12, Gate Reviews for Defence Capital Acquisition Projects, paragraph 3.86.

[44]      ANAO Audit Report No. 52 2011–12, Gate Reviews for Defence Capital Acquisition Projects, paragraph 3.68.

[45]      ANAO Audit Report No. 52 2011–12, Gate Reviews for Defence Capital Acquisition Projects, paragraphs 3.85–3.86.

[46]      Committee Hansard, 13 June 2012, p. 15.

[47]      Committee Hansard, 13 June 2012, p. 19.

[48]      ANAO Audit Report No. 52 2011–12, Gate Reviews for Defence Capital Acquisition Projects, paragraphs 3.38–3.81.

[49]      ANAO Audit Report No. 52 2011–12, Gate Reviews for Defence Capital Acquisition Projects, paragraph 31.

[50]      ANAO Audit Report No. 52 2011–12, Gate Reviews for Defence Capital Acquisition Projects, paragraph 4.21.

[51]      Committee Hansard, 7 October 2011, p. 21.

[52]      Committee Hansard, 7 October 2011, p. 23.

[53]      Committee Hansard, 7 October 2011, p. 21.

[54]      Committee Hansard, 7 October 2011, p. 21.

[55]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 3.2.13.

[56]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 3.2.13 and Defence Submission 21, which stated that the CEO DMO 'provides independent advice to the Defence Ministers and the Cabinet on the cost, schedule and other commercial aspects of military equipment procurements in each capability development Cabinet submission', p. 14.

[57]      Committee Hansard, 7 October 2011, pp. 18–19.

[58]      Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper, paragraph 16.6.

[59]      The Mortimer Review recommended (recommendation 2.10) that the CEO DMO should provide advice to government on the cost, schedule, risk and commercial aspects of all major equipment acquisitions, and be a permanently invited adviser to government committees considering defence procurement. Department of Defence, The Response to the Report of the Defence Procurement and Sustainment Review, p. 25.

[60]      Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper, paragraph 17.9.

[61]      DSTO, Technical Risk Assessment Handbook, Commonwealth of Australia, 2006, paragraph 1.1

[62]      DSTO, Technical Risk Assessment Handbook, Commonwealth of Australia, 2006, paragraph 2.6.

[63]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraphs 1.5.8 and 3.6.6.

[64]      Committee Hansard, 7 October 2011, p. 21. The handbook states that the Division is responsible for ensuring that the DCP is appropriately programmed, for independently reviewing capital and operating costs for all projects going to the Defence committees, and for the management of Net Personnel and Operating Costs (NPOC) estimates for all DCP projects and those approved projects (i.e. post-Second Pass) for which NPOC has not been triggered. Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 1.5.8.

[65]      Committee Hansard, 7 October 2011, p. 21. The Division comprises two branches: Investment Analysis (IA) Branch, which provides advice on capability proposals, and assigns capability analysts to each project; and the Cost Analysis Branch which provides cost analysis on capability proposals to support the development of MINSUBs and CABSUBs. According to the handbook, both branches provide their advice independent of CS Div.

[66]      Committee Hansard, 13 June 2012, p. 23.

[67]      Committee Hansard, 13 June 2012, p. 35.

[68]      Supplementary Submission 21 on Capability Investment and Resources Division and the Project Initiation and Review Board, p. [3].

[69]      Committee Hansard, 7 October 20 11, p. 21.

[70]      Committee Hansard, 7 October 2011, p. 22.

[71]      Committee Hansard, 13 June 2012, p. 23.

[72]      General Hurley, CDF, Committee Hansard, 13 June 2012, p. 35.

[73]      Acting Secretary of Defence, Mr Simon Lewis, Cover letter to DMO Submission 41, 7 June 2012.

[74]      Acting Secretary of Defence, Mr Simon Lewis, Cover letter to DMO Submission 41, 7 June 2012.

[75]      See for example, Dr Brabin-Smith and Dr Davies, Committee Hansard, 13 June 2012,             pp. 43–44.

[76]      Stephen Smith MP, Minister for Defence, 'Improving personal and institutional accountability in Defence', 9 August 2011, http://www.minister.defence.gov.au/2011/08/09/improving-personal-and-institutional-accountability-in-defence/ (accessed 3 April 2012) and Stephen Smith MP, Minister for Defence, 'Minister for Defence—Press Conference—Black Review', 9 August 2011, http://www.minister.defence.gov.au/2011/08/09/minister-for-defence-press-conference-black-review-9-august-2011/ (accessed 24 April 2012). See also Air Marshal Harvey, who informed the committee that the Division would be broken away from the CDG. Committee Hansard, 7 October 2011, p. 22.

[77]      Committee Hansard, 7 October 2011, pp. 22–23.

[78]      Prime Minister, Minister for Defence, Minister for Defence Materiel—Joint Media Release—Next stage of future submarine project announced, 3 May 20120, http://www.minister.defence.gov.au/2012/05/03/prime-minister-minister-for-defence-minister-for-defence-materiel-joint-media-release-next-stage-of-future-submarine-project-announced/ (accessed 15 May 2012).

[79]      Acting Secretary of Defence, Mr Simon Lewis, Cover letter to DMO Submission 41, 7 June 2012.

[80]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 3.7.6.

[81]      Stephen Smith MP, Minister for Defence, 'Improving personal and institutional accountability in Defence', 9 August 2011, http://www.minister.defence.gov.au/2011/08/09/improving-personal-and-institutional-accountability-in-defence/ (accessed 3 April 2012).

[82]      Committee Hansard, 7 October 2011, p. 22.

[83]      Committee Hansard, 7 October 20 11, p. 21.

[84]      Committee Hansard, 13 June 2012, p. 28.

[85]      Submission 2, Attachment, 'Defence and the Need for Independent Policy Analysis', Security Challenges, vol. 6, no. 2 (Winter 2010), p. 11.

[86]      Committee Hansard, 12 June 2012, p. 37. For further discussion, see pp. 36–47 of the transcript.

[87]      Supplementary Submission 3F, p. [6].

[88]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 1.4.15.

[89]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 1.4.16.

[90]      Confidential Submission.

[91]      Confidential Submission.

[92]      Confidential Submission.

[93]      Committee Hansard, 12 June 2012, p. 36.

[94]      Committee Hansard, 12 June 2012, p. 38.

[95]      Committee Hansard, 12 June 2012, p. 38.

[96]      Department of Defence, Review of the Defence Accountability Framework, January 2011, pp. 35–36.

[97]      ANAO Audit Report No. 52 2011–12, Gate Reviews for Defence Capital Acquisition Projects, paragraph 4.21.

Chapter 11 - Knowledge-based organisation 

[1]        See for example, Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisitions: Managing Risk to Achieve Better Outcomes', 20 January 2010, p. 3.

[2]        Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisitions: Managing Risk to Achieve Better Outcomes', 20 January 2010, p. 1.

[3]        RAND National Defense Research Institute, Learning from Experience, vol. I, Lessons from the Submarine Programs of the United States, United Kingdom, and Australia, 2011, p. iii.

[4]        Committee Hansard, in camera.

[5]        Submission 3, Annex A, p. 1.

[6]        Committee Hansard, in camera.

[7]        Committee Hansard, 12 August 2011, p. 14.

[8]        Professor Martin Renilson, Royal Institution of Naval Architects, Committee Hansard, 12 August 2011, p. 23. See also comments by The Australian Association for Maritime Affairs, Supplementary Submission 17. p. 3.

[9]        Committee Hansard, in camera.

[10]      Submission 22, p. 6.

[11]      Committee Hansard, 5 October 2011, p. 6.

[12]      ANAO Audit Report No. 57 2010–11, Acceptance into Service of Navy Capability, paragraph 29.

[13]      Information obtained during site visit to South Australia and Western Australia.

[14]      Committee Hansard, 12 August 2011, p. 11.

[15]      Confidential Submission.

[16]      Confidential Submission.

[17]      See for example, Mr Innes Willox, Australian Industry Group Defence Council, Committee Hansard, 11 August 2011, p. 3. Also see chapter 2 of the report.

[18]      Defence Procurement Review 2003, August 2003, pp. 2 and 9–10.

[19]      Department of Defence, 2008 Audit of the Defence Budget, 3 April 2009, p. 51.

[20]      Supplementary Submission 3C, p. 12.

[21]      Committee Hansard, 11 August 2011, p. 38.

[22]      Submission 36, paragraph 13.

[23]      Dr Thomson, Committee Hansard, 12 August 2011, p. 9.

[24]      See for example, Association of Professional Engineers, Scientists and Managers Australia, Submission 36, p. 2.

[25]      Committee Hansard, 5 October 2011, p. 51.

[26]      See for example, Mr Bond, Committee Hansard, 11 August 2011, p. 34.

[27]      Department of Defence, Capability Development Group, 'Welcome to CDG', http://defence.gov.au/capability/_home/Default.asp (accessed 4 January 2012).

[28]      Submission 22, paragraph 21.

[29]      Committee Hansard, 11 August 2011, pp. 30–31.

[30]      Mark Thomson, private capacity, Committee Hansard, 12 August 2011, p. 13.

[31]      Air Marshal John Harvey, Department of Defence, Committee Hansard, 7 October 2011, p. 3.

[32]      David Mortimer, Going to the next level: the report of the Defence Procurement and Sustainment Review, 2008, p. 24.

[33]      Andrew Davies and Mark Thomson, Submission 8, p. 2.

[34]      Sonartech Atlas, Submission 13, pp. 3–4.

[35]      Answer to written question on notice no. 1.

[36]      Defence Procurement Review 2003, August 2003, p. v.

[37]      Stephen Smith MP, Minister for Defence, 'Minister for Defence—Press Conference—Black Review', 9 August 2011, http://wwwminister.defence.gov.au/2011/08/09/minister-for-defence-press-conference-black-review-9-august-2011/ (accessed 24 April 2012).

[38]      Stephen Smith MP, Minister for Defence, 'Improving personal and institutional accountability in Defence', 9 August 2011, http://www.minister.defence.gov.au/2011/08/09/improving-personal-and-institutional-accountability-in-defence/ (accessed 24 April 2012).

[39]      Committee Hansard, 7 October 2011, pp. 2–3.

[40]      Committee Hansard, 7 October 2011, p. 3.

[41]      Committee Hansard, 7 October 2011, p. 4.

[42]      Committee Hansard, 7 October 2011, p. 35.

[43]      Defence Annual Report 2010–2011, vol. 1, p. 44, records that DMO had 5,526 APS staff for 2009–10. Defence indicated that DMO's staffing level stood at 7,200.

[44]      David Mortimer, Going to the next level: the report of the Defence Procurement and Sustainment Review, 2008, p. 48. Defence informed the committee that 'the expected posting tenure for military personnel in DMO was three years.' See Defence's answer to written question on notice no. 1.

[45]      Confidential submission.

[46]      Committee Hansard, 11 August 2011, p. 6.

[47]      Committee Hansard, 11 August 2011, pp. 4–5.

[48]      Submission 8, p. 2.

[49]      Confidential Submission.

[50]      Confidential Submission.

[51]      Committee Hansard, 7 October 2011, pp. 9–10. Mr King explained further,' as both public servants and as military folk, we do not really understand the drivers of industry as well as we might—cash flow; indeed, the need to make a profit. Too often, I think our interactions with industry oscillate between being in love with them or being at combat with them instead of just engaging in business with them.'

[52]      Submission 16, p. 2.

[53]      Submission 16, p. 4.

[54]      Submission 3, p. 14.

[55]      Dr Andrew Davies, Committee Hansard, 12 August 2011, p. 15.

[56]      Confidential, Submission.

[57]      Committee Hansard, 12 June 2012, p. 12.

[58]      Committee Hansard, 13 June 2012, p. 10.

[59]      Committee Hansard, 13 June 2012, p. 10.

[60]      Air Commodore (Retired) Bushell, Submission 3, p. 14; Attachment, 'The Decline in the Management of Defence and Defence Capability Development, Acquisition, Preparedness, and Sustainment', Air Power Australia Analysis 2009–05, 5 September, 2009, pp. 2–3; Supplementary Submission 3A, Annex A, pp. 5–6 and Australian National Audit Office, Submission 22, p. 6.

[61]      Committee Hansard, 7 October 2011, p. 9.

[62]      ANAO, Submission 22, p. 6.

[63]      ANAO Audit Report No. 20 2011–12, 2010–11 Major Projects Report, paragraph 3.38, p. 90.

[64]      Committee Hansard, 7 October 2011, p. 3.

[65]      Submission 22, p. 6.

[66]      Committee Hansard, 11 August 2011, p. 31.

[67]      Committee Hansard, 12 August 2011, p. 8.

[68]      Dr Mark Thomson, Committee Hansard, 12 August 2011, p. 18.

[69]      Richard Griffiths, Australian Association for Maritime Affairs, Committee Hansard, 12 August 2011, p. 23.

[70]      Andrew Davies and Mark Thomson, Submission 8, p. 2.

[71]      Richard Griffiths, Australian Association for Maritime Affairs, Committee Hansard, 12 August 2011, p. 26.

[72]      Committee Hansard, 7 October 2011, p. 35.

[73]      Paul Rizzo, Plan to Reform Support Ship Repair and Management Practices, July 2011, p. 63.

[74]      Committee Hansard, in camera.

[75]      Committee Hansard, in camera.

[76]      Submission 18, pp. 2 and 3–4.

[77]      Submission 18, p. 3.

[78]      Submission 36, p. 3.

[79]      Submission 36, paragraph 8.

[80]      ANAO Audit Report No. 57 2010-11, Acceptance into Service of Navy Capability, paragraph 71.

[81]      ANAO Audit Report No. 57 2010-11, Acceptance into Service of Navy Capability, paragraph 71.

[82]      Dr David Robinson, Engineers Australia, Committee Hansard, 5 October 2011, p. 7.

[83]      DMO is also continuing to support the Australasian Procurement and Construction Council initiative to develop strategic procurement courses at Australian Technology Network universities and the University of Canberra. Committee Hansard, 7 October 2011, p. 3.

[84]      Air Commodore (retired) Bushell, Submission 3, Annex A, p. 4.

[85]      Fran Holbert, ANAO, Committee Hansard, 11 August 2011, p. 27.

[86]      Committee Hansard, 11 August 2011, p. 28.

[87]      Air Commodore (retired) Bushell, Supplementary Submission 3C, p. 21.

[88]      Committee Hansard, 5 October 2011, p. 32.

[89]      Committee Hansard, 12 August 2011, p. 6.

[90]      Paul Rizzo, Plan to Reform Support Ship Repair and Management Practices, July 2011, p. 9 and recommendations 9, 10, 17, 19, 20, 23. Rizzo stated ' In addition to being fragmented, it [Navy engineering workforce] has been "hollowed-out" over many years as a result of change upon change in Defence and an undue focus on short-term operational demands'.

[91]      Committee Hansard, 12 August 2011, p. 3.

[92]      Committee Hansard, 12 June 2012, p. 21.

[93]      Submission 3, p. 2.

[94]      Submission 3, p. 2.

[95]      Air Commodore (retired) Bushell, Supplementary Submission 3C, p. 10 and Ian McPhee, Australian National Audit Office, Committee Hansard, 11 August 2011, p. 25.

[96]      Supplementary Submission 3C, p. 10.

[97]      Paul Rizzo, Plan to Reform Support Ship Repair and Management Practices, July 2011, p. 63.

[98]      Professor Stephen Cook and Dr Mark Unewisse, 'A Survey of Defence Industry Systems Engineering and Systems Integration Capability: Part 2: Qualitative Results and Survey Findings', Paper prepared for Systems Engineering and T&E in the Next Decade, May 2011.

[99]      Committee Hansard, 5 October, p. 5.

[100]    Committee Hansard, 12 August 2011, p. 24.

[101]    Committee Hansard, 7 October 2011, p. 5.

[102]    Committee Hansard, 7 October 2011, p. 5.

[103]    Committee Hansard, 5 October 2011, p. 46.

[104]    Standing Committee on Foreign Affairs, Defence and Trade, Blue water ships: consolidating past achievements, December 2006, paragraphs 16.7–16.18.

[105]    Standing Committee on Foreign Affairs, Defence and Trade, Blue water ships: consolidating past achievements, December 2006, paragraph 16.8.

[106]    The Association of Professional Engineers, Scientists and Managers Australia, Submission 36, paragraph 8.

[107]    Confidential Submission.

Chapter 12 - Technical analysis and test and evaluation

[1]        The Helmsman Institute, A Comparison of Project Complexity between Defence and other Sectors, public release version, p. [10].

[2]        Department of Defence, 2008 Audit of the Defence Budget, April 2009, p. 76.

[3]        See for example, Mr Bruce Green, Submission 20, p. 3, Defence Procurement Review 2003, August 2003, p. 15 and Department of Defence, 2008 Audit of the Defence Budget, April 2009, p. 9.

[4]        Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, paragraph 16.17.

[5]        Submission 30, p. 3.

[6]        For example, the Royal Institution of Naval Architects highlighted the importance of taking into account Australian conditions when it comes to ship design. Submission 18, p. [6].

[7]        Submission 21, p. 6. Also, in its response to the Mortimer Review, Defence accepted that there would be 'many occasions where modifications would be required in order to for example, meet Australian regulations and to make the equipment interoperable with the rest of the ADF and with allies'.

[8]        The Helmsman Institute, A Comparison of Project Complexity between Defence and other Sectors, public release version, p. [11].

[9]        See for example, ANAO Audit Report No. 57 2010–11, Acceptance into Service of Navy Capability, 2011, paragraph 28 and Submission 20, p. 3.

[10]      Mark Thomson, Andrew Davies and Chris Jenkins, 'Three views of risk: Selecting and acquiring military equipment', ASPI Special Report, November 2011, issue 42, p. 10.

[11]      Submission 20, p. 2.

[12]      Defence Procurement Review 2003, August 2003, p. 48.

[13]      Defence Materiel Organisation, Going to the Next Level, the report of the Defence Procurement Sustainment Review, 2008, p. 20.

[14]      Department of Defence, 2008 Audit of the Defence Budget, April 2009, p. 80.

[15]      See for example, Submission 2. Dr Brabin-Smith argued that Defence should be subject to more impartial and informed analysis, not less. Dr Davies stated that a developmental capability requires 'a structured approach that allows dispassionate assessments to be made at each critical step of the process' in Mark Thomson, Andrew Davies and Chris Jenkins, 'Three views of risk: Selecting and acquiring military equipment', ASPI Special Report, November 2011, issue 42, p. 9.

[16]      Submission 22, p. 2.

[17]      See ANAO Audit Report No. 57 2010–11, Acceptance into Service of Navy Capability, 2011, paragraph 10.

[18]      Before the Senate Armed Services Committee, Mr Carter pointed to the importance of 'rigorous developmental and independent operational test and evaluation to provide accurate and objective information on the capabilities and limitations of defense systems...' Quoted in J. Michael Gilmore, Director, Operational Test and Evaluation, Office of the Secretary of Defense, 'Key Issues Causing Program Delays in Defense Acquisition', ITEA Journal, vol. 32(4), December 2011, p. 391. See also, Defence Procurement Review 2003, August 2003, p. 20.

[19]      Department of Defence, Defence Test and Evaluation Roadmap, 2008, Canberra ACT, p. 6.

[20]      See for example, GAO, 'Observations on Weapon Program  Performance and Acquisition Reforms', Statement of Michael J. Sullivan Director, Acquisition and Sourcing Management, before the Subcommittee on National Security and Foreign Affairs, Committee on Oversight and Government Reform, House of Representatives, 19 May 2010, p. 9.

[21]      J. Michael Gilmore, Director, Operational Test and Evaluation, Office of the Secretary of Defense, 'Key Issues Causing Program Delays in Defense Acquisition', ITEA Journal, vol. 32(4), December 2011, p. 391. He indicated that earlier and more robust T&E may reveal problems and solutions at a time when they would be less costly to fix, or allow decision makers to cancel or restructure the project'. He stated: 'The operational test should not be a time for problem discovery, nor should it be a time for resolution of lingering problems left over from developmental test and evaluation'. Director Operational Test and Evaluation, Financial Year 2011, Annual Report.

[22]      Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisitions: Managing Risk to Achieve Better Outcomes', 20 January 2010, p. 3. 

[23]      See for example, Australian Industry Group Defence Council, Submission 10, p. [2]; Submission 20, pp. 1–3; Submission 22, paragraphs 18–19 and Mark Thomson, Andrew Davies and Chris Jenkins, 'Three views of risk: Selecting and acquiring military equipment', ASPI Special Report, November 2011, issue 42, pp. 11–12. During the committee's visit to South Australia and Western Australia, officials told the committee that early test and evaluation minimises the likelihood of problems emerging later in the process. They also emphasised the importance of understanding and stipulating the level of testing required during production and trails in order for the capability to be accepted into service and being clear in specifications and the testing requirements.

[24]      Submission 6, p. 5.

[25]      Committee Hansard, 7 October 2011, p. 18.

[26]      Committee Hansard, 7 October 2011, p. 18.

[27]      Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 3.2.13(i).

[28]      Air Marshal Harvey, Committee Hansard, 7 October 2011, p. 18.

[29]      Dr Andrew Davies and Dr Mark Thomson, Submission 8, p. [2]; Submarine Institute of Australia, Submission 9, pp. 1–3; and Mr Bruce Green, Submission 20, pp. 1–2.

[30]      Supplementary Submission 3D, E.J.Bushell, Review of Defence Materiel Organisation (DMO) Major Projects Report (Major Projects Review) 2010–11, 2 February 2012, p. [9].

[31]      Supplementary Submission 3C, p. 12.

[32]      Committee Hansard, 5 October 2011, p. 34.

[33]      Committee Hansard, 5 October 2011, p. 34.

[34]      See chapter 2 which provides details on these projects. See also Mark Thomson, Andrew Davies and Chris Jenkins, 'Three views of risk: Selecting and acquiring military equipment', ASPI Special Report, November 2011, issue 42, p. 12.

[35]      ANAO Audit Report No. 48 2008–09, Planning and Approval of Defence Major Capital Equipment Projects, paragraphs 5.24, 5.35 and 5.52.

[36]      See also references to the results of a survey of Defence industry systems engineering and systems integration capability and Mr King's statement on pp. 185–6.

[37]      Defence Procurement Review 2003, August 2003, p. 48.

[38]      Committee Hansard, 12 August 2011, p. 14.

[39]      Committee Hansard, 12 August 2011, p. 14.

[40]      Senate Foreign Affairs, Defence and Trade References Committee, Material acquisition and management in Defence, March 2003, paragraphs 6.18 and 6.34.

[41]      Department of Defence, Defence Test and Evaluation Roadmap 2008, pp. 30, 31, 33, 35, 37, 39.

[42]      Committee Hansard, 13 June 2012, p. 43.

[43]      Committee Hansard, 13 June 2012, p. 36.

[44]      Committee Hansard, 13 June 2012, p. 37.

[45]      Committee Hansard, 13 June 2012, p. 29.

[46]      Committee Hansard, 13 June 2012, p. 43.

[47]      Committee Hansard, 13 June 2012, p. 43.

[48]      Charles Haddon-Cave QC, The Nimrod Review, an independent review into the broader issues surrounding the loss of the RAF Nimrod MR2 Aircraft XV230 in Afghanistan in 2006, 28 October 2009, paragraph 3.139.

Chapter 13  - Sustaining and building Australia's defence industry

[1]        Department of Defence, Submission 21, p. 6.

[2]        All the shares issued in the capital of ASC are owned by the Minister for Finance and Deregulation.

[3]        Submission 21, p. 6.

[4]        Department of Defence, Submission 21, p. 6.

[5]        Innes Willox, Australian Industry Group Defence Council, Committee Hansard, 11 August 2011, p. 3.

[6]        Australian Industry Group Defence Council, Submission 10, p. 12. See also Engineers Australia, Submission 32, pp. 2–3.

[7]        Professor Stephen Cook and Dr Mark Unewisse, 'A Survey of Defence Industry Systems Engineering and Systems Integration Capability: Part 2: Qualitative Results and Survey Findings', Paper prepared for Systems Engineering and T&E in the Next Decade, May 2011.

[8]        Brent Jackson, Engineers Australia, Committee Hansard, 5 October 2011, p. 4.

[9]        Innes Willox, Australian Industry Group Defence Council, Committee Hansard, 11 August 2011, pp. 4–5.

[10]      Innes Willox, Australian Industry Group Defence Council, Committee Hansard, 11 August 2011, p. 3.

[11]      The Hon. Stephen Smith MP, Minister for Defence, Media Release, 'Changes to Air Warfare Destroyer Construction Program', MIN663/11, 26 May 2011, http://www.defence.gov.au/minister/Smithtpl.cfm?CurrentId=11862 (accessed 2 January 2012).

[12]      RAND Corporation, Australia's Submarine Design Capabilities and Capacities, 2011, p. xxiii.

[13]      RAND Corporation, Australia's Submarine Design Capabilities and Capacities, 2011, p. xxvi.

[14]      RAND Corporation, Australia's Submarine Design Capabilities and Capacities, 2011, p. xxvi.

[15]      RAND Corporation, Australia's Submarine Design Capabilities and Capacities, 2011, p. xxxix.

[16]      Defence Materiel Organisation, 'Skilling Australia's Defence Industry (SADI) Program', http://www.defence.gov.au/dmo/id/sadi/index.cfm (accessed 9 January 2012).

[17]      Minister for Defence Materiel, the Hon. Jason Clare MP, 'Industry Feedback on Defence Skills Program', 20 September 2011.

[18]      Minister for Defence Materiel, the Hon. Jason Clare MP, 'Industry Feedback on Defence Skills Program', 20 September 2011.

[19]      Australian Industry Group Defence Council, Submission 10, pp. 5 and 12.

[20]      Australian Industry Group Defence Council, Submission 10, p. 13. See also Professor Stephen Cook and Dr Mark Unewisse, 'A Survey of Defence Industry Systems Engineering and Systems Integration Capability: Part 2: Qualitative Results and Survey Findings', Paper prepared for Systems Engineering and T&E in the Next Decade, May 2011.

[21]      Sonartech Atlas, Submission 13, p. 3.

[22]      Sonartech Atlas, Submission 13, p. 3.

[23]      Skills Australia, Defence Industry Workforce Strategy: Discussion Paper, January 2012, p. 1.

[24]      Skills Australia, Defence Industry Workforce Strategy: Discussion Paper, January 2012, p. 5.

[25]      Skills Australia, Defence Industry Workforce Strategy: Discussion Paper, January 2012, pp. 8 and 10.

[26]      Skills Australia, Defence Industry Workforce Strategy: Discussion Paper, January 2012, pp. 12–13.

[27]      See BAE Systems Australia, Submission 12, p. 4.

[28]      Committee Hansard, 7 October 2011, p. 27.

[29]      Department of Defence, Fact Sheet, Priority Industry Capabilities, July 2009.

[30]      Department of Defence, Fact Sheet, Priority Industry Capabilities, July 2009, p. 1.

[31]      See for example, Sonartech ATLAS Pty Ltd, Submission 13, p. 1 and Department of Defence, Defence Capability Plan, 2011, p. 1.

[32]      Leigh Purnell and Mark Thomson, 'How much information is enough? The disclosure of defence capability planning information', Australian Strategic Policy Institute under contract to the Australian Department of Defence, December 2009, p. 1.

[33]      Stephen Smith MP, Minister for Defence, 'Minister for Defence and Minister for Defence Materiel—Joint media release—Defence Capability Plan', 10 July 2012, http://www.minister.defence.gov.au/2012/07/10/minister-for-defence-and-minister-for-defence-materiel-joint-media-release-defence-capability-plan/ (accessed 29 July 2012).

[34]      Stephen Smith MP, Minister for Defence, 'Minister for Defence and Minister for Defence Materiel—Joint media release—Defence Capability Plan', 10 July 2012, http://www.minister.defence.gov.au/2012/07/10/minister-for-defence-and-minister-for-defence-materiel-joint-media-release-defence-capability-plan/ (accessed 29 July 2012).

[35]      Department of Defence, Building Defence Capability: A Policy for a Smarter and More Agile Defence Industry Base, 2010, p. 8.

[36]      Department of Defence, Building Defence Capability: A Policy for a Smarter and More Agile Defence Industry Base, 2010, pp. 9–11.

[37]      Department of Defence, Building Defence Capability: A Policy for a Smarter and More Agile Defence Industry Base, 2010, pp. 9–10.

[38]      Leigh Purnell and Mark Thomson, 'How much information is enough? The disclosure of defence capability planning information', Australian Strategic Policy Institute under contract to the Australian Department of Defence, December 2009, p. 24.

[39]      Defence Materiel Organisation, 'Defence Industry ePortal', http://www.dplusi.defence.gov.au/ (accessed 16 January 2012).

[40]      See http://australia.gov.au/topics/defence-and-international/defence-industry (accessed 15 June 2012).

[41]      Leigh Purnell and Mark Thomson, 'How much information is enough? The disclosure of defence capability planning information', Australian Strategic Policy Institute under contract to the Australian Department of Defence, December 2009, p. 68.

[42]      For example, in its submission, the Australian Industry Group Defence Council supported ASPI's recommendation that Defence move to a 10-year DCP timeframe but with regular, six-monthly online updates. Submission 10, p. [11].

[43]      Australian Business Defence Industry Unit Submission 6 p. 4; Australian Industry Group Defence Council, Submission 10 p. [5] and Sonartech, Submission 13, p. 1.

[44]      Submission 13, p. 1.

[45]      Submission 13, p. 1.

[46]      Submission 9, p. 2.

[47]      Committee Hansard, in camera.

[48]      Australian Industry Group Defence Council, Submission 10, p. [11].

[49]      Senate Foreign Affairs, Defence and Trade References Committee, Blue water ships: consolidating past achievements, December 2006, paragraph 15.65.

[50]      Australian Industry Group Defence Council, Submission 10, p. 10.

[51]      BAE Systems, Submission 12, p. 1.

[52]      Committee Hansard, in camera.

[53]      Australian Strategic Policy Institute, 'How much information is enough? The disclosure of defence capability planning information', 2009, p. 64.

[54]      Professor Stephen Cook and Dr Mark Unewisse, 'A Survey of Defence Industry Systems Engineering and Systems Integration Capability: Part 2: Qualitative Results and Survey Findings', Paper prepared for Systems Engineering and T&E in the Next Decade, May 2011.

[55]      Professor Stephen Cook and Dr Mark Unewisse, 'A Survey of Defence Industry Systems Engineering and Systems Integration Capability: Part 2: Qualitative Results and Survey Findings', Paper prepared for Systems Engineering and T&E in the Next Decade, May 2011.

[56]      Australian Business Defence Industry Unit, Submission 6, p. 3; Sonartech ATLAS, Submission 13, p. 2; BAE Systems Australia, Submission 12, p. 3; Australian Association for Maritime Affairs, Submission 17, pp. 5–6; Royal Institution of Naval Architects, Submission 18, p. 5; and Innes Willox, Committee Hansard, 11 August 2011, p. 2.

[57]      Submission 18, p. 5.

[58]      Submission 6, p. 3.

[59]      Submission 12, pp. 2–3.

[60]      Committee Hansard, 11 August 2011, p. 17.

[61]      Committee Hansard, 11 August 2011, p. 17.

[62]      Submission 12, p. 3.

[63]      Andrew Davies, Committee Hansard, 12 August 2011, p. 6.

[64]      Submission 27, p. 8.

[65]      Graham Priestnall, Australian Industry and Defence Network Inc., Committee Hansard, 11 August 2011, p. 3.

[66]      Mark Thomson, The Cost of Defence ASPI Defence Budget Brief 2011–2012, May 2011, p. vii.

[67]      Mark Thomson, The Cost of Defence ASPI Defence Budget Brief 2011–2012, May 2011, p. 103.

[68]      Submission 12, p. 3.

[69]      Mark Thomson, The Cost of Defence ASPI Defence Budget Brief 2012–2013, May 2012, p. 119.

[70]      Submission 12, p. 3.

[71]      Submission 12, p. 3.

[72]      Submission 10, p. [3].

[73]      Submission 19, p. 1.

[74]      See for example, Submission 12, p. 3; Submission 10, p. [3]; Submission 19, p. 1 and Professor Stephen Cook and Dr Mark Unewisse, 'A Survey of Defence Industry Systems Engineering and Systems Integration Capability: Part 2: Qualitative Results and Survey Findings', Paper prepared for Systems Engineering and T&E in the Next Decade, May 2011.

[75]      Christopher Burns, Defence Teaming Centre, Committee Hansard, 11 August 2011, p. 4.

[76]      Jon Grevatt, Jane's Defence Weekly, 'Challenges lie ahead for Australian defence', 21 December 2011.

[77]      Professor Stephen Cook and Dr Mark Unewisse, 'A Survey of Defence Industry Systems Engineering and Systems Integration Capability: Part 2: Qualitative Results and Survey Findings', Paper prepared for Systems Engineering and T&E in the Next Decade, May 2011.

[78]      Northern Territory Government, Submission 4, p. 3.

[79]      Northern Territory Government, Submission 4, p. 4.

[80]      Supplementary Submission 21A, p. 3.

[81]      Committee Hansard, 7 October 2011, p. 31.

[82]      Mark Thomson, The Cost of Defence ASPI Defence Budget Brief 2012–2013, May 2012, p. 119.

[83]      Mark Thomson, The Cost of Defence ASPI Defence Budget Brief 2012–2013, May 2012, p. 121.

[84]      Submission 17, p. 4.

[85]      Submission 19, p. 3.

[86]      Submission 16, p. 4.

[87]      Submission 16, p. 4.

[88]      Submission 10, Recommendation 13, p. 5.

[89]      Mark Thomson, Committee Hansard, 12 August 2011, p. 11.

[90]      BAE Systems, Submission 12, p. 3, Sonartech Atlas, Submission 13, p. 2.

[91]      Australian Industry Group Defence Council, Submission 10, p. [5].

Chapter 14 - Defence's relationship with defence industry

[1]        Committee Hansard, in camera.

[2]        Committee Hansard, 11 August 2011, p. 2.

[3]        According to the Defence Teaming Centre, industry consultation suggested the CDG's role should be enhanced to establish a better relationship with industry. Submission 16, p. 3.

[4]        Submission 16, p. 3.

[5]        Submission 16, p. 3.

[6]        Submission 16, p. 2.

[7]        BAE Systems, Submission 12, p. 4.

[8]        BAE Systems, Submission 12, p. 4.

[9]        Australian Business Defence Industry Unit, Submission 6, p. 5; Andrew Davies and Mark Thomson, Submission 8, p. [2]; Australian Industry Group Defence Council, Submission 10, p. [4]; Australian Industry Defence Network, Submission 19, p. 3.

[10]      Australian Business Defence Industry Unit, Submission 6, p. 5.

[11]      Submission 6, p. 5.

[12]      Australian Business Defence Industry Unit, Submission 6, p. 5.

[13]      Committee Hansard, 11 August 2011, p. 5.

[14]      Committee Hansard, 11 August 2011, p. 5.

[15]      Australian Industry Defence Network, Submission 19, p. 3.

[16]      Andrew Davies and Mark Thomson, Submission 8, p. 2.

[17]      Defence Science and Technology Organisation, Submission 31, p. 3.

[18]      Mark Thomson, Committee Hansard, 12 August 2011, p. 11.

[19]      Committee Hansard, in camera

[20]      Committee Hansard, in camera.

[21]      Committee Hansard, in camera.

[22]      Committee Hansard, in camera.

[23]      See for example, Submission 9, pp. 1–2; Submission 14, pp. 1–2; and Submission 15, pp. 1–2 and 7.

[24]      Department of Defence, Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 3.3.44.

[25]      Department of Defence, Department of Defence, Defence Capability Development Handbook, August 2011, paragraph 3.3.45.

[26]      Dr Ian Sare, Defence Science and Technology Organisation, Committee Hansard, 5 October 2011, p. 24.

[27]      Committee Hansard, 5 October 2011, p. 24.

[28]      Committee Hansard, 7 October 2011, p. 50.

[29]      Committee Hansard, in camera.

[30]      Committee Hansard, in camera.

[31]      Submission 10, p. 8.

[32]      Committee Hansard, 7 October 2011, p. 2.

[33]      Committee Hansard, 5 October 2011, p. 15.

[34]      Committee Hansard, 11 August 2011, p. 8. See also Submission 10, p. 8.

[35]      Committee Hansard, 11 August 2011, p. 7.

[36]      Committee Hansard, 11 August 2011, p. 7.

[37]      Committee Hansard, 11 August 2011, p. 7.

[38]      Committee Hansard, 11 August 2011, p. 6.

[39]      Committee Hansard, 11 August 2011, p. 6.

[40]      Submission 12, p. 3.

[41]      Submission 5, p. [2].

[42]      John Coles, Collins Class Sustainment Review—Phase 1 Report, 4 November 2011, p. 9.

[43]      John Coles, Collins Class Sustainment Review—Phase 1 Report, 4 November 2011, p. 10.

[44]      Returned and Services League of Australia, Submission 5, p. 2; Australian Industry Group Defence Council, Submission 10, p. 2; MOTIVEPOWER stated that 'in general DMO and Defence do not understand the commercial pressures on companies seeking to be Defence suppliers'. Submission 29, p. 2.

[45]      Submission 16, p. 2. The Centre stated that this [perception] 'could not be further from the truth, 99.9% of Australia’s defence industry is professional and patriotic with a passionate desire to deliver with value for money capability on time and to budget'.

[46]      Submission 16, p. 2.

[47]      Submission 16, p. 2. Mr Christopher Burns, Defence Teaming Centre, indicated that industry's relationship with DMO was adversarial, while with other agencies it was a collegiate, engaged approach. Committee Hansard, 11 August 2011, p. 4.

[48]      The Returned & Services League of Australia, Submission 5, p. 2.

[49]      Committee Hansard, 11 August 2011, p. 10. Mr Willox agreed that there must be an element of trust in the relationships. Committee Hansard, 11 August 2011, p. 5.

[50]      Submission 10, p. 2.

[51]      Committee Hansard, 11 August 2011, pp. 5–6.

[52]      Warren King, Defence Materiel Organisation, Committee Hansard, 7 October 2011, p. 9.

[53]      Warren King, Defence Materiel Organisation, Committee Hansard, 7 October 2011, p. 9.

[54]      Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisition: Managing Risk to Achieve Better Outcomes', 20 January 2010, p. 17.

[55]      Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisition: Managing Risk to Achieve Better Outcomes', 20 January 2010, p. 5.

[56]      Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisition: Managing Risk to Achieve Better Outcomes', 20 January 2010, p. 5.

[57]      Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisition: Managing Risk to Achieve Better Outcomes', 20 January 2010, p. 5.

[58]      Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisition: Managing Risk to Achieve Better Outcomes', 20 January 2010, p. 6.

[59]      RAND National Defense Research Institute, Learning from Experience, vol. I, Lessons from the Submarine Programs of the United States, United Kingdom, and Australia, 2011, p. 6.

[60]      RAND National Defense Research Institute, Learning from Experience, vol. I, Lessons from the Submarine Programs of the United States, United Kingdom, and Australia, 2011, p. 54.

[61]      For example see Ian McPhee, Deputy Auditor-General for Australia, 'Risk Management and Governance', Speech, National Institute for Governance, Canberra, 16 October 2002, p. 9.

[62]      Australian Industry Group Defence Council, Submission 10, p. 5.

[63]      Australian Industry Group Defence Council, Submission 10, p. 3.

[64]      Committee Hansard, in camera.

[65]      Committee Hansard, in camera.

[66]      Committee Hansard, in camera.

[67]      Babcock Pty Ltd, Submission 15, p. 5.

[68]      Committee Hansard, in camera and AWD Systems Centre personnel in Adelaide, SA.

[69]      RAND National Defense Research Institute, Learning from Experience, vol I, Lessons from the Submarine Programs of the United States, United Kingdom, and Australia, 2011, p. 32.

[70]      RAND National Defense Research Institute, Learning from Experience, vol I, Lessons from the Submarine Programs of the United States, United Kingdom, and Australia, 2011, p. 32.

[71]      RAND National Defense Research Institute, Learning from Experience, vol I, Lessons from the Submarine Programs of the United States, United Kingdom, and Australia, 2011, p. 32.

[72]      RAND National Defense Research Institute, Learning from Experience, vol I, Lessons from the Submarine Programs of the United States, United Kingdom, and Australia, 2011, p. 33.

[73]      Committee Hansard, in camera.

[74]      Submarine Institute of Australia Inc, Submission 9, p. 3.

[75]      RAND National Defense Research Institute, Learning from Experience, vol I, Lessons from the Submarine Programs of the United States, United Kingdom, and Australia, 2011, p. 33.

Chapter 15 - Conclusion

[1]        Paul Francis, Michael Golden and William Woods, Statement before the Subcommittee on Defense, Committee on Appropriations, House of Representatives, 'Defense Acquisitions: Managing Risk to Achieve Better Outcomes', 20 January 2010, pp. 1–2.

[2]        Ministry of Defence, The Defence Strategy for Acquisition Reform, Presented to Parliament by the Secretary of State for Defence, February 2010, Foreword by Lord Drayson.

[3]        ANAO Audit Report No. 52 2011–12, Gate Reviews for Defence Capital Acquisition Projects, paragraph 3.68.

[4]        The Mortimer Review recommended (recommendation 2.10) that the CEO DMO should provide advice to government on the cost, schedule, risk and commercial aspects of all major equipment acquisitions, and be a permanently invited adviser to government committees considering defence procurement. Department of Defence, The Response to the Report of the Defence Procurement and Sustainment Review, p. 25.

[5]        Department of Defence, The Response to the Report of the Defence Procurement and Sustainment Review, p. 25.

[6]        Dr Brabin-Smith, Committee Hansard, 12 June 2012, p. 36.

[7]        Department of Defence, Procurement Review 2003, p. vi.

[8]        Department of Defence, Procurement Review 2003, p. 24.

[9]        Refer to paragraphs 7.19–7.21 and also Defence Materiel Organisation, Going to the Next Level, the report of the Defence Procurement and Sustainment Review, 2008, recommendations 2.6, 3.1–3.4 , pp. 23, 32–34.

[10]      Committee Hansard, 7 October 2011, p. 54. See paragraphs 8.31–8.34 of this report.

[11]      Committee Hansard, 7 October 20 11, p. 54.

[12]      Committee Hansard, in camera.

[13]      See paragraphs 11.2–11.7 of this report.

[14]      Committee Hansard, in camera.

[15]      The Association of Professional Engineers, Scientists and Managers Australia, Submission 36, paragraph 8.

[16]      See observations recorded at paragraphs 6.29–6.30.

[17]      Refer to paragraphs 7.59

[18]      Defence informed the committee that the Technical Risk Certificate for each project is 'taken verbatim into the advice to Government'. Supplementary Submission 21B.

[19]      Refer to paragraphs 3.3–3.18.

[20]      RAND, Learning from Experience, Volume IV, Lessons from Australia's Collins Submarine Program 2011, p. xiii

[21]      A number of the recommendations were based on or taken from RAND, Learning from Experience, Volume IV, Lessons from Australia's Collins Submarine Program 2011,              pp. xiii–xiv.

[22]      Department of Defence, Defence Capability Plan 2011, public version, pp. 71–72.

[23]      Department of Defence, Defence Capability Plan 2011, public version, pp. 71–72.

[24]      The Capability Plan states that 'the expected acquisition is a MOTS  light tactical fixed wing airlift capability sourced from an OEM or through government-to-government (FMS) arrangement with few Australian industry opportunities'. Department of Defence, Defence Capability Plan 2011, public version, pp. 71–72.

[25]      ANAO Audit Report No. 52 2011–12, Gate Reviews for Defence Capital Acquisition Projects, paragraph 4.21.

[26]      See paragraphs 3.34–3.66 and 13.18 and 13.31.

[27]      Refer to paragraphs 14.37–14.54 for discussion.

Additional Comments by Senator Nick Xenophon - Independent Senator for South Australia

[1]        ANAO Audit Report No.41 2008–09, The Super Seasprite, pp.13–14 and The Hon Joel Fitzgibbon MP, Minister for Defence, 'Seasprite Helicopters to be cancelled', MIN14/08, 5 March 2008, http://www.defence.gov.au/minister/70tpl.cfm?CurrentId=7480 (accessed 2 April 2012). 

[2]        ANAO Report No. 20 2011-12, 2010-11 Major Projects Report, paragraph 24 and p. 103.

[3]        Leigh Purnell and Mark Thomson, How much information is enough?: The disclosure of defence capability planning information, Prepared by the Australia Strategic Policy Institute under contact to the Australian Department of Defence, December 2009, p. 40.

[4]        Mr Warren King, Acting Chief Executive Officer, Defence Material Organisation, Committee Hansard, 7 October 2011, p. 60.

[5]        ANAO Audit Report No.57 2010-11, Acceptance into Service of Navy Capability, 2011. paragraph 29.

Additional Comments by Senator David Fawcett - Liberal Party Senator for South Australia

[1]           www.defence.gov.au/capability/_pubs/dcdm%20chapter%201.pdf

[2]              These unintended consequences are comparable with the outcomes experienced by State Governments in Australia and some overseas nations that have attempted to achieve efficiencies through the implementation of shared services. WA and QLD have both abandoned shared services programs having found that the costs were greater than realized benefits.

[3]               Now Defence Support Group (DSG)

[4]               That same company was specifically excluded by the Commonwealth from providing an airborne system for the Coast Watch contract despite twice being selected by the prime contractor as the best for the job. The Commonwealth insisted on a European solution which ended up being very immature (despite the marketing) and absorbed the all project contingency funds, requiring extensive effort from the prime to prevent project failure.

[5]               The Minister may also choose to have non-executive directors on the board to provide broader perspective and experience to strategic and commercial deliberations.

[6]               This resolves the current dilemma whereby in the search for savings through alignment of process, shared services have broken the continuity of command and destroyed accountability. Under this model, alignment (efficiency) is achieved through common standards which are audited and reported to the Board (effectiveness), while the CDF and Service Chiefs retain command and control of all the personnel and resources they require to achieve their outcomes (hence accountability).

[7]               This may include increasing or decreasing the scope of a capability, cancelling a capability, bounding the procurement options eg: a new C17 may be decided ahead of 1^st pass Submission that it will be an FMS purchase.

[8]               Choosing to have an additional aircraft type to support sovereignty would need the type be specifically chosen for its current performance, systems growth potential and the availability of a technology partner willing to share IP (one example being the F15 and Israel, a nation that Australian has had extensive technical military engagement with in the past). Like the F15-I, an indigenously developed platform also provides an element of unknown to a potential adversary with regard to actual capability.