Within the last year, performance on the key measures of cost and materiel elements of capability have remained steady and key capabilities have been delivered that are now providing operational effect for the ADF. An overview of cost and schedule performance is shown in Tables 1 and 2. Examples of significant achievements in 2010-11 include:
• C-17 Globemaster Heavy Airlift capability: Four aircraft were delivered under Phase 3 of the AIR 8000 project ahead of schedule and under budget. These aircraft are providing crucial and previously unavailable operational capability to the war fighter engaged in operations as well as humanitarian assistance to communities affected by natural disasters in Australia and overseas.
• Bushmaster: As of 30 June 2011, 674 Bushmaster Vehicles have been delivered. Many of these vehicles are currently in operation in Afghanistan where they have been instrumental in saving Australian soldiers' lives. . The Government has recently approved the purchase of an additional 101 Bushmaster vehicles.
• Landing Helicopter Dock (LHD) Ships: Construction of the main hull sections for the second Landing Helicopter Dock is underway. The first hull, LHD01 (to be commissioned HMAS Canberra) was launched in Spain in February 2011.
• Airborne Early Warning and Control (AEW&C): Following successful resolution of a range of contractual issues, four AEW&C (Wedgetail) aircraft have been accepted in an 'initial' configuration capable of supporting training and peacetime national tasking. Additionally, the Wedgetail aircraft participated in a number of military exercises during 2010-11.
• Armidale Class Patrol Boats: All 14 Armidale Class Patrol Boats have been accepted with engineering and maintenance arrangements established. The Armidale Class Patrol Boats continue to provide an important service to the nation at the forefront of the Government's efforts to protect Australia's northern approaches and offshore maritime interests.
• F/A-18 Super Hornets: All 24 F/A-18 Super Hornets have been delivered to their new home base at RAAF Amberley. These aircraft are proving to be a successful replacement for the retired F-111s by providing a more advanced air strike capability. Minister for Defence Materiel, Jason Clare said "They are amongst the best fighter planes in the world and all 24 aircraft have been delivered on budget and ahead of schedule".125
• Armed Reconnaissance Helicopter: Twenty Tiger aircraft have been accepted. Engineering and maintenance arrangements have also been established.
• Air to Air Refuelling Capability: Initial Acceptance of the first KC-30A aircraft was achieved on 1 June 2011 with acceptance of the second aircraft on 22 June 2011.
• Upgraded Adelaide Class Guided Missile Frigate: Four upgraded ships have been accepted with engineering and maintenance established. HMAS Melbourne was deployed to the Middle East and African east coast as part of a multi national task force to protect commercial shipping from piracy. HMAS Melbourne and its crew effectively carried out their mission and in the process responded to 14 piracy distress calls. 126
• Next Generation Satellite Program: Three of the six satellites have been successfully launched and are being utilised by the ADF.
• Anzac Anti-Ship Missile Defence: HMAS Perth was the first Anzac class frigate to undergo upgrades to its missile defence system and carried out successful trials off the coast of Hawaii in June 2011. Minister for Defence Materiel Jason Clare said "the recent trials achieved outstanding results and shows that the new system can defend the ship from modern cruise missile attack".127 The upgrades are also a great success story for Australian industry as the system's cutting edge technology was developed in Australia by CEA Technologies.
Over 2010-11, the DMO has continued to institute a number of organisational business improvements which are directly aimed at enhancing its core business of equipping and sustaining the ADF. Some examples of these include:
• Establishment of the Independent Project Performance Office: On 1 July 2011 the Independent Project Performance Office (IPPO) commenced operating, which gave effect to a key procurement reform announcement made by Minister for Defence, Stephen Smith, and Minister for Defence Materiel, Jason Clare128.
• The establishment of the IPPO also implements one of the key outstanding recommendations of the Mortimer Review into Defence Procurement and Sustainment which called for an office to be established within the DMO to review projects and assist project teams to solve problems where necessary129.
• The IPPO is responsible for the conduct and management of:
- Early Indicators and Warnings;
- Gate Reviews; and
- Projects of Concern.
• Early Indicators & Warnings: Introduction of an Early Indicators and Warnings (EI&W) 130 system is designed to identify potential problems with projects by revealing any deviation of defined project requirements (scope, schedule, budget/cost) from agreed parameters.
• Gate Reviews: The Gate Review function commenced in 2009 to provide a mechanism for robust review and assurance of major projects. This enables provision of high quality and reliable advice to Defence and Government as to the health and outlook of major projects. Following the review of some 50 high value and technically complex projects in 2010-11, the Minister has directed the DMO to expand its program of Gate Reviews to include all major projects at least annually131.
• Strengthening the Projects of Concern Process: The Government has strengthened the Projects of Concern regime to provide increased senior management oversight of identified projects.
• Roll-out of Initial Materiel Release (IMR) and Final Materiel Release (FMR): The Materiel Acquisition Agreement (MAA) (the principal agreement between the DMO, Capability Managers and Capability Development Group) has been strengthened with the introduction of IMR and FMR. These represent the two key milestones for the DMO to deliver its materiel elements of the Fundamental Inputs to Capability (FIC) to the Capability Managers.
• Introduction of IMR and FMR milestones provides greater clarity of responsibilities between the DMO and Capability Managers. It marks the delivery and release to the Capability Managers of materiel supplies, which are just one of a number of inputs coordinated by the Capability Manager to realise a capability.
• Twenty seven of the 28 projects reported in this MPR had, by early July 2011, incorporated IMR and FMR into their project schedule and included the Capability Manager as a signatory to their MAA. The exception is Hornet Refurb as it is due for completion by December 2011. The DMO is also well advanced in transitioning all remaining Major Capital Acquisition Projects to the revised MAA format.
• Strengthening the 'DMO Wide Risk Management Framework': A number of risk management improvement initiatives have been introduced and continue to be rolled out across DMO, including: maturing of the 'DMO Wide Risk Management Framework'; and identifying key business control frameworks to better manage risk.
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125 Air Force News, 27 October 2011
126 Defence Media Release, 18 February 2011
127 Minister for Defence Materiel Jason Clare Press Release, 3 September 2011
128 Minister for Defence, Stephen Smith, and Minister for Defence Materiel, Jason Clare, Media Release - Independent Project Performance Office to oversee major Defence projects established, 29 June 2011
129 Defence Procurement and Sustainment Review, Recommendation 3.6.
130 Minister for Defence Media Release, Strategic Reform Program, 6 May 2011.
131 Minister for Defence Media Release, Strategic Reform Program, 6 May 2011.