Re-re-re-reforming Defence acquisition
10 Sep 2012| and

The recent Senate committee report ‘Procurement procedures for Defence capital projects’ was naturally of great interest to us, concerned as it was with our core business. We weren’t dispassionate observers of the process either; we put in a submission and tendered some of our relevant work, and we appeared before the committee on occasion.

The Committee grappled with some of the perennial issues that surround Defence projects, and (in our view) through their recommendations put their finger squarely on the biggest challenges that face the Department:

The key recommendations deal with much needed organisational change directed at achieving the correct alignment of responsibilities and functions of relevant agencies, and providing them with the skills and resources they need to fulfil their obligations. They underscore the importance of Defence becoming a self critical, self evaluating and self correcting organisation.

In many ways, and as the Committee recognises, these observations are following a well-trodden path, behind many reviews of the acquisition, support and general management practices of the Department, including those by Kinnaird (2003), Mortimer (2008), Rizzo (2011), Cole (2011) and Black (2011). The alignment of responsibilities, functions and resources has been a common theme in those reports. The degree of contestability and rigour within the capability development process has been a subject that ASPI has visited in the past as well.

The fact that there has been the need for so many reviews, each accompanied by the implementation of a reform agenda and/or reorganisation, suggests that the problems are deep-seated and difficult to fix. Defence does not lack for able or hard-working people, and some of the best minds in the business have been turned to the task of process and business model improvement.

The issues that come up in the Committee report are familiar. Many of them have been the subject of recommendations going back at least as far as the Kinnaird review. That tells us that the challenge hasn’t been seeing what’s wrong at the macro level, but in producing a solution at the organisational and functional level—‘operationalising’ the required fixes. As always, the devil is in the details.

It’s not hard to find examples where processes introduced following reviews have had mixed results—sometimes as the result on unintended consequences. For example, there’s no doubt that the Kinnaird reforms have improved the performance of major projects—a fact to which the ANAO will attest (p.89) But it’s also clear that the effect has been to slow down the system to the point where the DCP has many more projects than can be processed. This was clear as early as Mortimer’s 2008 review, which recommended a ‘tiered’ approach, with the amount of process tailored to the complexity of the project, nonetheless the issue still seems to dog the capability development process today.

Alas, operationalisation is where the new report comes up short—it has high-level solutions but doesn’t explain exactly how they should be implemented. We have to include ourselves in that criticism—many of our thoughts and suggestions appear in the Committee’s report, and we were short on details as to how they might be implemented. So it’s incumbent upon us to make some concrete suggestions, if not of solutions, at least of the next steps that could be taken. We’ll return to those in our next post.

For today, we’ll close with a caution to anyone charged with producing an operational implementation of this report is that any move to an even more complex process, with more review steps and/or more players involved, is likely to be counterproductive. As we’ve pointed out previously, it’s possible to gather more information and become more confident about judgements without actually improving the chance of a good outcome.

Andrew Davies is senior analyst for defence capability and executive editor of The Strategist, and Mark Thomson is senior analyst for defence economics at ASPI.