1.1 The Defence Materiel Organisation (DMO) operates as a prescribed agency under the Department of Defence. Its mission is to acquire and sustain equipment for the Australian Defence Force (ADF).
1.2 In 2009-10 the DMO will spend more than $11.2 billion24 (about 43% of the Defence annual budget) acquiring and sustaining military equipment and services, and will employ over 7,500 military and civilian staff in more than 40 locations around Australia and overseas. The DMO delivers some of the largest and most demanding projects in Australia and the ADF relies on the DMO to provide its equipment on time, on budget and to the required levels of quality and safety. With a budget that is some 1% of the nation's Gross Domestic Product, the DMO acknowledges its responsibility to maintain high levels of transparency to Parliament and the Australian tax payer on the stewardship of funds under management; the DMO Major Projects Report (DMO MPR) is one of many ways in which it meets this responsibility.
1.3 The DMO currently manages about 200 major projects (each valued at greater than $20 million) and more than 150 minor projects (each valued at under $20 million). Major projects account for 98% of the DMO's capital acquisition budget expenditure. The major projects featured in the DMO MPR are some of the most complex and demanding Defence projects, spanning a range of technologies and Defence users.
1.4 This year's DMO MPR provides a progress report for cost, schedule and performance for each of these 15 projects as at 30 June 2009. The DMO has expended an estimated $2.9 million in producing this report. Over the coming years the DMO will increase, to up to 30, the number of major projects reported.
1.5 The projects included in the DMO MPR will change over time to reflect the approval of new projects and the closure of completed projects. Each year the DMO will propose additional projects for inclusion in the forthcoming year's Report as well as those for deletion. The Joint Committee of Public Accounts and Audit (JCPAA) will consider and endorse the projects for the DMO MPR.
1.6 This chapter presents an overview of the 2008-09 DMO MPR. In response to the experience gained from the 2007-08 DMO MPR and feedback from the JCPAA, additional explanation has been included about project maturity scores, issues with base date dollar data, and an overview of the management of lessons learned and project risks. An expanded section on lessons learned has been included in Chapter 3.
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24 Based on an average foreign exchange rate of $ 1 AUD = 0.75 USD.