1.65 Provision of DMO support to materiel capability is managed through the DMO agreements framework. The principal agreement for all DMO acquisition projects is the Materiel Acquisition Agreement (MAA). The MAAs define the DMO's acquisition services to be delivered to Defence for all major and minor equipment projects, and specifies the project in terms of the scope and schedule to be delivered, and the approved budget.
1.66 To improve accountability and transparency for delivery of major projects, the Capability Manager is now a signatory along with the DMO and Capability Development Group to each MAA. This change gains the key stakeholder's formal acknowledgement of the baseline requirements against which the DMO's delivery of equipment will be measured and identifies responsibilities of the Capability Manager in management of the non-materiel elements of capability delivery.
1.67 Concurrently, DMO has transitioned from using Initial Operational Capability (IOC) and Final Operational Capability (FOC) to using IMR and FMR as measures of DMO performance.
1.68 The IOC and FOC are Defence milestones that represent the estimated milestone for when a capability system, comprising all FICs, will achieve the approved capability state. Consequently, the shift to IMR and FMR provides greater clarity of responsibilities between the DMO and Capability Managers.
1.69 All but one of MPR projects had, by early July 2011, incorporated IMR and FMR into their project schedule and incorporated the Capability Manager as a signatory to their MAA (Hornet Refurb project was not required to transition to the new MAA due to it's closure prior to the end of 2011). The DMO is also well-advanced in completing the transition of all other ongoing Major Capital Acquisition projects to the revised MAA.
1.70 The terms used to describe cardinal schedule milestones in an MAA, for which DMO is responsible, are defined as follows:
• Second Pass Approval: The final milestone in the project requirements phase, at which point Government endorses a specific capability solution and approves funding for the project acquisition phase. The project cannot proceed to the acquisition phase until this approval is obtained from Government.
• Contract Signature: The date of signature for the project's largest contract. The Project's Performance Measurement Baseline is established at this milestone.
• Initial Materiel Release (IMR): The milestone that marks the completion and release of DMO acquisition project supplies required to support the achievement of IOC and/or IOR.
• Final Materiel Release (FMR): The milestone that marks the completion and release of DMO acquisition project supplies to support the achievement of FOC.
• MAA Closure: A milestone that marks the cessation of DMO activities in support of an approved capital acquisition project. Defence subsequently manages and affects the Project Acquisition Business Case Closure which marks the completion of all Department of Defence activity against the approved capital acquisition project. An acquisition phase MAA will remain in force until all undertakings have been fulfilled or both parties agree in writing to terminate the agreement.
1.71 Defence milestones, for which the Capability Managers are responsible, are defined as follows:
• Initial Operational Release (IOR): The milestone at which the Capability Manager is satisfied that the initial operational and materiel state of the capability system - including any deficiencies in the fundamental inputs to capability - are such that it is sufficiently safe, fit for service, and environmentally compliant to proceed into a period of operational test and evaluation leading to an endorsed capability state.
• Initial Operational Capability (IOC): The point in time at which the first subset of a capability system that can be operationally employed is realised. IOC is a capability state endorsed by Government at project approval at Second Pass, and the Capability Manager is able to assess and report achievement.
• In-Service-Date (ISD): The point in time that symbolically marks the beginning of the transition of a capability system, in part or full, from the acquisition phase to the in-service phase. ISD coincides as closely as is practicable with IOR.
• Final Operational Capability (FOC): The point in time at which the final subset of a capability system that can be operationally employed is realised. FOC is a capability state endorsed by Government at Second Pass project approval, and the Capability Manager is able to assess and report achievement.