3.10 The Projects of Concern list was established in 2008 to focus the attention of senior management within the Defence Organisation and industry on solving the issues required to remediate listed projects. Projects are placed on the list by the Minister for Defence and the Minister for Defence Materiel on the recommendation of the CEO DMO. Projects are put on the list when, for example, there are significant challenges with cost, schedule or capability delivery.94
3.11 Government reforms to further strengthen the Project of Concern process were released in June 2011.95 These reforms include:
• tightening the processes for adding and removing projects from the list;
• where a company has a project on the list, weighing their performance in remediating the project when evaluating tenders for other projects; and
• holding bi-annual reviews with Defence and industry representatives which will give the Minister for Defence Materiel a better understanding of the progress of remediation strategies
3.12 During 2010-11 fieldwork the ANAO observed that six MPR projects were Projects of Concern.96 Projects are removed from the Projects of Concern list once the Minister is satisfied that remediation activity has been completed successfully or the Government has decided to cancel the project. Subsequently in June 2011, the Minister for Defence announced that HF Modernisation was no longer a Project of Concern following the negotiation of a revised schedule and subsequent milestones being achieved 13 months ahead of time.97
3.13 The ANAO has been provided with access to the reporting framework for the six MPR projects listed as Projects of Concern, to gain assurance that the information presented is consistent with the information presented in the 2010-11 MPR.
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94 Minister for Defence, the Hon. Stephen Smith MP, and the Minister for Defence Materiel, the Hon. Jason Clare MP, Projects of concern - Update, 15 October 2010.
95 Minister for Defence, the Hon. Stephen Smith MP, Reforms to Projects of Concern, 29 June 2011.
96 Wedgetail, Overlander Vehicles, Air to Air Refuel, HF Modernisation, ANZAC ASMD 2B and Stand Off Weapon.
97 Minister for Defence, the Hon. Stephen Smith MP, Reforms to Projects of Concern, 29 June 2011.