Katherine Ziesing | Canberra


As pointed out more than a few times by ADM, Defence and in particular the DMO have been reviewed with what has become increasing regularity. The most prominent of these reviews from Kinnaird (2000) and Mortimer (2008) have made their marks upon the organisation that spends almost half of the Defence budget to acquire and maintain materiel for the ADF.

King believes that much of what was recommended in these two reports has now been implemented. The only major point that remains unfulfilled is the executive agency question. But would this solve the problems that DMO faces? The biggest criticism of the organisation often lies with workforce management and its level of professionalism. The strictures that being part of the APS places on the DMO that can be detrimental to managing the workforce in a manner that the CEOs, both past and present, have grappled with. The lack of flexibility in moving people around, up, down or out has been an ongoing issue.

King said that unless changes on this front are made, the next series of transformational changes are just not possible.

“Some people might say “Oh you’re just saying you should pay everybody more”,” King said to ADM. “Well I’m not saying that actually, because I can use the example of where we had a person with multiple code of conducts and multiple security breaches, and we’ve been unable to in a reasonable time get a reasonable resolution of that issue due to the interpretation of the Public Services Act.

“Basically we’ve got good performance, but the pursuit of the “individual’s rights” sometimes offsets the rights of the organisation, or to make it more personal, the work group.

“What if you’ve got 10 people in a work group and one person is palpably not working cooperatively, effectively, responsibly and the system seems to go to inordinate lengths or puts an inordinate burden on the organisation to demonstrate why that person should no longer have that job, against the rights of the other nine to work in a workplace that’s efficient, productive, to be enjoyable.

“Every individual should have fair and reasonable workplace rights but when does the right of the individual get balanced against the rights of the other individuals in that organisation?”

Following on from the workforce management issue, becoming an executive agency would solve the issue as it does not explicitly separate the workforce. The government has the power to create a number of vehicles that would address the workforce issue. For example, the Australian Federal Police is a non-corporate government entity but it has special ability and special terms under which it can engage people. They don’t run rampant but they can do certain things that regular APS staff cannot.

King is also a firm believer that the DMO, in whatever future form it may take, needs to be an integral part of the Defence landscape. It’s the flexibility element that needs to be addressed.

“It’s not just bad performers or paying a little bit extra for good performers, although I do believe that has to be in the mix, it also has to be genuinely flexible,” King explained to ADM. “So for example, if I’m in industry and I’m running a project, I might bid 4,000 hours of contract support or 4,000 hours of engineering support. I might want 2,000 hours in the first year of the project, 500 hours in the next two years of the project because that’s being produced, and then I might want a surge of engineering activity at the end of the project because I’m doing test and evaluation or trials.

“In a public service construct, which is much more constrained for, you tend to bid people. So I will bid two engineers for five years, because the ability to have three-quarters of an engineer this year is just not easy. Now people will tell you you can do it, just like you can get rid of poor performers, but the mechanics of doing it are interminable and the burden on the organisation to have it like that is just difficult. Now we’re trying; we are introducing it.”


Budget performance


Getting back to the headline figure of seven per cent under budget, the DMO has had a raft of performance management indicators in play for some time to see how they are stacking up internationally and compared to industries that have highly complex project management tasks. See figure one for some of these figures and comparisons.

In essence the moral of the story is – not too bad. The numbers when it comes to blow outs for funds are the outliers rather than the norm when it comes to DMO programs. Of the 19 projects closed in 2013/2014, all achieved the required capability and were, on average, seven per cent under budget. Internal figures point to 80 major projects having been finalised since 2010-2011 within 95 per cent of budget, a saving of $518 million.

Schedule remains a concern. Pre-Kinnaird, acquisition suffered an average slip of 65 per cent. Post-Kinnaird, this figure has dropped to about 30 per cent.

“It’s about the same as comparable complex industries internationally,” King said. “We were about the same but I would say that’s not good enough.”

In an effort to get schedules to be more realistic from the get go and fight the conspiracy of optimism that King has spoken of the in past, the Gate Review framework has been key in addressing that. See box for more on Gate Reviews.

King calls it a passive conspiracy as there is no one party to blame for the schedule issue. Inexperienced program managers don’t know what they don’t know, industry bids a schedule that sits somewhere between where they think it will be and what works for their business case and capability managers rely on the other two parties to have a good idea of what’s going on.

There is a lack of understanding about how much modification adds to any program schedule. They increase almost in tandem. King also pointed out that having an array of MOTS equipment and putting it into a MOTS platform does not a MOTS offering make. The unintended consequences of such a move can lead to more issues on numerous fronts. The integration effort also adds complexity, time and cost.



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