Home' Defence Magazine : Issue 8 2010 Contents SPOTLIgHT ON REFORM: MORTIMER REvIEW
In the late 1990s and early 2000s, Defence
and DMO were criticised in the press for poor
management and process short-comings in
acquisition programs. In response, businessman
Malcolm Kinnaird was commissioned to
lead a review into the way Defence acquired
Mr Kinnaird revealed that the cost overruns or
lengthy schedule delays were often generated
early in the process. His recommendations resulted
in a significant improvement in the management
of major capital equipment projects.
In 2008, Mr David Mortimer, AO was tasked
to review Defence’s progress in implementing
Kinnaird’s recommendations, and to identify further
areas for reform. The Defence Procurement and
Sustainment Review (the Mortimer Review) was
tabled in Parliament in September 2008.
The reforms outlined in the Mortimer Review will
enhance the advice Defence provides to Government
in order to support decisions on capability
acquisition and support.
Key elements of the reforms include a greater
commercial discipline and accountability in the
procurement and sustainment processes for defence
equipment, and a stronger role for the capability
managers. This includes the Chief Executive Officer
of the Defence Materiel Organisation (CEO DMO)
providing Government with independent, expert
advice on commercial matters. The intended
outcome is better results for both the ADF
and the taxpayer.
By nature, major capital equipment programs are
complex and require regular monitoring to ensure
programming approval and progress runs according
to plan. So have the Mortimer reforms made any
difference? What has changed?
The Mortimer reforms focus on identifying key
stakeholders and holding them to account for their
role in delivering capability. Mortimer identified,
and the Government agreed, that the capability
manager should be the key stakeholder accountable
for delivering capability and for performance reports
to Government, through the Secretary and CDF.
But capability managers are not alone. Project
directives are to be issued by the Secretary
and the CDF following a project’s final (second
pass) approval by Government to clearly define
the capability baseline. This baseline sets the
materiel scope of the project and documents the
requirements that the acquisition agency – usually,
but not always the DMO – and the providers of
other fundamental inputs to capability are to deliver.
Project directives assign accountability and
responsibility to the capability managers for
assisting in the development of requirements
and providing agreed resources. The CEO DMO’s
role to support delivery of materiel systems and
related supplies in accordance with the agreed
materiel acquisition agreement is also described,
as is the responsibility for the other key enabling
Clear accountability is the first step for the DMO
toward becoming more commercially disciplined and
more business-like. The CEO DMO has a Ministerial
directive, a charter in the form of the Memorandum
of Arrangements with the Secretary and CDF,
and specific agency agreements. In turn, and as
recommended by Mortimer, he has also signed
charters with System Program Office directors
and project managers.
The DMO is also continuing to reform, with
a stronger focus on meeting the needs of our
customers and extracting maximum value from
relationships with industry. The Strategic Reform
Program and the reality of a capped budget are also
demanding a more mature approach. This is a big
ask for the DMO, but positive changes are occurring,
particularly in the provision of advice from the CEO
DMO to Government on commercial matters.
During the past year there has been considerable
progress in establishing the processes to ensure
that the outcomes sought by the Mortimer
Review are achieved. Almost 70 per cent of the
recommendations have now had their processes
fully implemented and most of the remainder are
at an advanced stage of implementation.
However, it is important to distinguish between
establishing processes and achieving real outcomes.
To add more process without clear outcome or
value would go against the intent of both Kinnaird
Our experience in implementing the Kinnaird
reforms indicates that it will take some time
before we can be sure that implementation of the
recommendations are achieving the outcomes
intended by Government. It is also our experience
that we need to avoid complacency along the way.
Challenge unnecessary process and focus on the
outcomes expected by Government.
Who is responsible and accountable for capability
planning and for bringing capabilities into service?
What is the role of capability managers, the capability
Development group and the Defence Materiel
Organisation? What does the government require
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