The key challenge for the DMO and defence industry is to reduce schedule slippage. For the 28 projects in this report, the average schedule variance at Final Operational Capability (FOC) is a factor of 1.28 (or an average slippage of 28%). The improvement on the 30% average slippage (for 22 projects) recorded in the 2009-10 MPR relates directly to the inclusion of the six additional projects. To specifically address this issue the DMO and defence industry will continue to focus on improving all aspects of project performance, from initial schedule estimation and planning through to project delivery.
Importantly, this schedule variance calculation, against FOC, relates to the delivery of the whole project as scoped by Government. It is not correct to assume that deliveries of 'all elements' of these projects are 28% late. In a number of cases these projects have successfully delivered a wide range of much-needed equipment to the ADF, either to deploy on operations or to use for critical training activities.
DMO assesses that a key driver of the 28% slippage is an initial underestimation by DMO and/or by industry of the technical maturity or complexity of the more highly developmental and large scale system integration projects. Australia is not alone in experiencing this, as reports similar to this MPR in the UK132 and USA133 demonstrate. The DMO continues to actively work in partnership with industry to address the underlying causes through various initiatives, some of which are highlighted in this report.
____________________________________________________________________
132 www.nao.org.uk
133 www.gao.gov