3.43 Lessons: Schedule management is by far the most pressing matter for the management of DMO complex projects. International benchmarking with other Defence organisations shows that this is not a DMO unique issue. The UK National Audit Office Major Projects Report 2008 notes that "In aggregate the 20 projects examined are now predicted to achieve their In Service Dates 483 months later than predicted when first approved. This slippage represents a 36 per cent increase in their expected timescales since the main investment decision."
3.44 The US Government Accounting Office March 2009 report entitled "DEFENSE ACQUISITIONS Assessments of Selected Weapon Programs" reported that across 95 programs in 2007 an average schedule delay of 22 months in delivering initial capabilities was experienced. Private sector benchmarks are not markedly different.
3.45 The ASPI Defence Budget Brief 2008-2009 notes that "18.5% of the DMO project budget represented projects with a delay in excess of 12 months, including 17.3% with a delay in excess of 18 months".
3.46 The majority of the schedule slippages experienced by DMO projects can be attributed to industry's project performance. These slippages primarily result from underestimating the scope and complexity of work, particularly complex systems design development and systems integration, and managing schedules of major sub-contractors.
3.47 Implementation: Based on these lessons learned, the DMO continues to pursue and consolidate prior schedule management initiatives. The DMO has invested heavily in building up its own scheduling skills through training and competency programs. To enforce greater rigour in the scheduling aspects of project management, the DMO project offices are required to use mandated schedule management tools with the capacity for schedule risk analysis. The DMO has also adopted a standard set of cardinal milestones across the life of a project to ensure all projects measure their schedule health at critical stages. The DMO's major contracts require contractors to provide fully resourced Contract Master Schedules and associated management plans.
3.48 Forecasting schedules for highly complex projects is a difficult task. Payment incentives for timely delivery by contractors including liquidated damages have been facilitated by linking payment milestones to physical achievement of work and by improving the definition of criteria for the achievement of these milestones. Payments based on earned value are now restricted to 30% except in unusual circumstances. With significant cash flow impacts as a consequence, contractors are now conducting more critical examination of achievability of their schedules than they might have done in the past.