Appendix 6: Glossary

Acquisition Category

Definition of each of the four Acquisition Categories.

Additional estimates

Where amounts appropriated at Budget time are required to change, the Parliament may make adjustments to portfolios through the Additional Estimates Act.

ADF Customer

Army, Navy, Air Force or Joint Capability.

ASDEFCON

AUStralian DEFence CONtracting suite of contracting templates.

Capability

The power to achieve a desired operational effect in a nominated environment within a specified time and to sustain that effect for a designated period. It is delivered by systems that incorporate people, organisation, doctrine, collective training, platforms, materiel, facilities, in-service support, and command and management.

Capability Manager

The Group Head or Service Chief responsible for a specific area of Australian Defence Force capability. The role of the Capability Manager is to raise, train and sustain in-service capabilities through the coordination of Fundamental Inputs to Capability and includes the service Chiefs for Army, Navy, Air Force and the Vice Chief of the Defence Force for Joint Projects.

Capital Equipment

Substantial end items of equipment such as ships, aircraft, armoured vehicles, weapons, communications systems, electronics systems or other armaments that are additional to, or replacements for, items in the Defence inventory.

 

 

Contract Master Schedule

A time and resource based schedule for executing work under the contract.

Corporate Governance

The process by which agencies are directed and controlled, and encompasses; authority, accountability, stewardship, leadership, direction and control.

Defence Procurement and Sustainment Review (Mortimer Review)

In September 2008, the Defence Procurement and Sustainment Review was published providing an independent review of the DMO and the effectiveness of Australia's defence procurement systems with the review being chaired by Mr David Mortimer AO. This became known as the Mortimer Review.

Defence Procurement Review 2003 (Kinnaird Review)

In August 2003 the Defence Procurement Review 2003 published its findings on the problems associated with major Defence acquisition projects with the review being chaired by Mr Malcolm Kinnaird. This became known as the Kinnaird Review.

DEFPUR 101

DEFence PURchasing (101) contracting template used prior to the formation of the DMO.

Final Operational Capability (FOC)

The point in time at which the final subset of a capability system that can be operationally employed is realised. It is a capability state endorsed at project approval at Second Pass, and reported as having been reached by the Capability Manager.

Financial Management and Accountability Act 1997

The FMA Act establishes the regulatory framework for financial management within public sector agencies, including the DMO.

First Pass Approval

The process that gives Government the opportunity to narrow the alternatives being examined by Defence to meet an agreed capability gap. First Pass approval allocates funds from the Capital Investment Program to enable the options that Government endorses to be investigated in further detail, with an emphasis on detailed cost and risk analysis.

Forward Estimates

The level of proposed expenditure for future years (based on relevant demographic, economic and other future forecasting assumptions). The Government requires forward estimates for the following three financial years to be published in each annual Federal Budget paper.

Function and Performance Specification

A specification that expresses an operational requirement in function and performance terms.

Fundamental Inputs to Capability

The standard list for consideration of what is required to generate capability, comprising organisation, personnel, collective training, major systems, supplies, facilities, support, and command & management. It is to be used by Defence agencies at all levels and is designed to ensure that all agencies manage and report capability, using a common set of management areas.

Initial Operational Capability (IOC)

A point in time at which the first subset of a capability system that can be operationally deployed is realised. It is a capability state endorsed at project approval at Second Pass, and reported as having been reached by the Capability Manager.

Major Capital
Acquisition
Project

A Defence project that meets one or more of the following criteria:

a  it has an estimated total one-time cost of bringing the capital equipment concerned into operation of $A 20 million or more;

b  the unit cost of an individual item in a multi-item acquisition is estimated at $A 1 million or more; and/or

c   (c) the project is strategically important and/or has significant Defence policy or joint Service implications.

Materiel Acquisition Agreement

An agreement between Defence and the DMO which states in concise terms what services and products the DMO (as a supplier) will deliver, for how much and when.

Materiel Sustainment Agreement

Materiel Sustainment Agreements will be between the Capability managers and the Chief executive Officer of the Defence Materiel Organisation. These agreements will cover the sustainment of current capability, including services such as repairs, maintenance, fuel and explosive ordnance.

Minor Capital Acquisition Project

A Defence project in which the proposed equipment falls within the definition of capital equipment but does not meet the criteria in the definition of a major project.

Off-the Shelf

A product that is available for purchase, which has been delivered to another military or Government body or commercial enterprise.

Operational Concept Document

The primary reference for determining fitness-for-purpose of the desired capability to be developed.

Outcomes

The results that the Government, and Defence as the purchaser, seek from the DMO and which are achieved by the successful delivery of its products and services.

Output

The product or service produced by the DMO on behalf of the Government and Defence.

Platforms

Refers to air, land, or surface or sub-surface assets that are discrete and taskable elements within the ADF.

Portfolio Budget Statement

A document presented by the Minister to the Parliament to inform Senators and Members of the basis for Defence/DMO budget appropriations in support of the provisions in Appropriation Bills 1 and 2. The statements summarise the Defence/DMO budget and provides detail of outcome performance forecasts and resources in order to justify agency expenditure.

Prescribed Agency

A prescribed agency is an agency established by regulation under the Financial Management and Accountability Act 1997. It provides financial management authority to, and requires accountability by, the Chief Executive of an agency.

Prime System Integrator

The entity that has prime responsibility for delivering the mission and support systems for the project.

Project Executive Summary and Status Outline

A summarisation of the project's status, challenges it faces and its performance.

Project Management Stakeholder Group

A group representing the key stakeholders in a project that meets periodically to review the status of the project, advise senior executives of issues and provide guidance to the Project Manager.

Project Maturity Score

A means of measuring the maturity against benchmark measures of a project at defined milestones.

Risk Management

At the highest level, it involves the identification and mitigation of those risks that have the potential to affect adversely the achievement of agreed output performance at the agreed price.

Second Pass

The final milestone in the requirements phase at which point Government endorses a specific capability solution and approves funding for the acquisition phase.

Service Customer

The Defence Group that is the end user of products and services delivered by DMO.

System Program Office

One of the core business units in the DMO. They provide a crucial link between the DMO and its customers. They provide acquisition and sustainment services to the ADF.

Test Concept Document

The basis for the DMO's development of the Test and Evaluation Master Plan for a project, and is the highest level document that considers test and evaluation requirements within the capability systems' life-cycle.

Two pass approval process

The process by which major capital investment proposals are developed for consideration and approval by the Government.

Type of Capability

'New' - a capability that has not previously existed in the ADF.

'Replacement' - a current capability that is being replaced by a more up to date technology or to respond to a changing threat.

'Upgrade' - an upgrade to existing capability.

Verification and Validation

Validation is the proof through evaluation of objective evidence that the specified intended end use of a product or system is accomplished in an intended environment. Validation is confirmation by examination and provision of objective evidence that specified requirements to which a product or service, or aggregation of products and services, is built, coded, assembled and provided have been fulfilled.