LTGEN David Hurley DSC, AO, CSC-Chief, Capability Development Group

LTGEN David Hurley is an infantryman. A graduate of the Australian Army Staff College and the US Army War College, he commanded 1 RAR in Somalia in 1993, then 1 Brigade during the East Timor deployment in 1999. After serving as Land Commander Australia he was appointed Chief Capability Development Group in December 2003. He spoke to ADM Editor Gregor Ferguson.
PROFILE
CO 1 RAR 1991
COMD 1 Brigade 1999
DG Land Development 2001
Head, Capability Systems 2001
Land Commander Australia 2002
Chief, Capability Development Group 2003

ADM: At the ADM Congress you listed several goals for 2005: How are you traveling so far?

Hurley: I concentrated on two goals. My first goal is to link strategic guidance to the DCP with a rigorous transparent capability planning process - not that the process doesn't exist, but in following through on the Kinnaird Review there were certain tasks put on us to clarify the guidance we put to government, so it relates to that.

The Defence Capability Strategy was reviewed by the Defence Capability and Investment Committee in April, and we have commenced our first round of a Defence Capability Update for 2005 as well. We're synchronizing those processes with the development of the defence financial and management plan cycle. I think our processes now are much more robust and that will give us a good basis to continue to respond to the Kinnaird recommendations.

The second goal I mentioned was that we must meet the DCP year of decision timetable for Government approvals. So far this year we've got 24 projects that will be up for approval by June - that compares to a total of 35 we did last year. So I think we're pushing along quite nicely there.

ADM: What, if anything, will change from CDG's point of view when the DMO becomes a prescribed agency on 1 July?

Hurley: I think there's two aspects. One relates to Materiel Acquisition Agreements (MAA). Right now we're working through all MMA's at the moment, but they won't come into effect until the DMO becomes a prescribed agency on 1st July. Currently we use the MMA's to plan our work together, but formally they stand up from 1st July when Dr Gumley [Chief Executive Officer of the DMO] has separate financial accountability.

Secondly, I think we'll see an even closer integration between the two organisations, particularly before 1st pass consideration of projects when we intend to assign members of DMO, with their project management skills, to my group. Effectively, under an MAA arrangement, I'm asking for DMO to act as a service provider to bring those skills earlier into the capability development process, to set up the projects in a formal sense with project management oversight well in advance of where it might have happened in the past.

ADM: You've been head of CDG for 19 months now - what for you have been the high points and what do you think is the biggest challenge facing the group?

Hurley: I'm always busy, so I guess that's a high point - we're actually doing things! We had a successful year last year in the number of projects we were able to gain government approval for, which is what we're all about. That was done despite some turbulence as central agencies were finding their role in the process, some projects were going through on the new Kinnaird process, some going through on a transitional process. There were considerable complexities in working out what would be the standards of information acceptable for decision-making. There was a lot of good, hard work done by both our group and the DMO to work through that.

ADM: And the biggest challenge?

Hurley: I think it is regaining credibility within government and central agencies that the quality of our work has improved and will continue to improve and that we are a very reliable, and indeed the major, source of advice on defence capability issues.

ADM: Has the need to engage with DOFA, as a new stakeholder in the capability development process, significantly affected the way your organisation works, or the project timetables it sets itself?

Hurley: What it has meant is that we work very closely with DOFA but we work to Defence's decision time lines, so the involvement of DOFA doesn't mean there's another hurdle to be taken in a sequential way. It means they work in parallel with us, we get their staff in at the appropriate time in the decision-making process and we interact with them in the development of the project proposals, but to our decision time lines.

I would say also that their analysis is helpful in making more robust capability decisions, particularly in relation to the cost estimations and analysis of cost issues, which is obviously why the government wanted them to be involved.

ADM: How do you reconcile the need for stakeholder engagement and consultation with the imperative to implement smart, timely business processes? The perception has been that Defence has always been very slow to work through things and arrive at its milestones and decision.

Hurley: I think there's two aspects to that. In the formative stages of projects when the intellectual work is being done and concepts are being explored and experimentation is being undertaken and so forth, in terms of being thorough (and often determining how thorough you need to be) that is a time-consuming business. At this front end of the process, if you want to have a good, viable range of options to make choices from, it takes time.

Also, within the DCP construct I'd like to be able to make a decision quickly but the funds have got to be available to support the decision, otherwise it's pointless just having projects sitting there well before they can be funded.

There's another aspect to this - with Steve Gumley saying he wants the DMO to become more businesslike, that might involve them reducing the time it takes to do some of their contract negotiations and tendering and so forth. But that's very much a commercial issue. I'm trying to get the right amount of detail to take to the government to help them make a good decision.

ADM: Do you expect to see a revised DCP, or a supplement to the existing DCP, this year?

Hurley: We'll endeavour to put one out this year. As you know the DCP is reviewed from a management perspective each year - what are the implications of decisions that the government has taken, expenditure rates in DMO, that sort of thing. The Minister has asked that we put one out this year, so we will - in the second half of the year.

ADM: Will we see an unclassified Network Centric Warfare (NCW) roadmap soon? At present, everybody talks about it and the effect it has on capability development and force structure planning, but outside the Defence organisation nobody has seen it.

Hurley: We're looking at this and reviewing it right now. I've mentioned previously some of the internal structures we've put in place in terms of the Network Centric Warfare Implementation Team and a program office within the organisation to ensure projects are integrated. I'd like to put one out because obviously there's an interest in the wider community and particularly industry in where we think we're going. I think when we've completed this review I'll see if I can arrange for that to occur.

ADM: You've talked about linking strategic guidance to the DCP with a transparent capability planning process to deliver an achievable, balanced and affordable Defence Capability Plan. Beyond a restructured Capability Development Advisory Forum (CDAF) will industry be brought into this process so that their expertise can be used to help shape requirements and contribute to realistic cost and schedule estimates?

Hurley: Interesting question. Going to your last point first - I think it would be naïve to think that if we get industry involved early in the process we're really going to get greater fidelity, particularly in early cost estimations. Cost estimations obviously firm up the closer you get to signing a contract. Of course, we'd like to be able to achieve better cost estimation earlier in the cycle. We've brought new tools into the office here to help us do that, developed the databases to support those tools, so we're building up our expertise. Industry can help in that but it may not always be in their interests to disclose their hand too early, I would think.

But where they can get involved, and they do I think in the Environmental Working Groups that sit underneath CDAF, is to help us understand what their capacities and capabilities are in the future, what they can offer in terms of capability options for us. There may also be an opportunity in the Rapid Prototyping Development and Evaluation (RPDE) process, where we will be trying to turn around our thinking. That goes back to your last question about whether we can be more smart and businesslike - can we turn round our thinking and develop our thoughts on some issues much more quickly and get the appropriate parts of industry engaged in those activities to bring their insights to the table? I think the RPDE is probably the primary method we've got in place at the present time of achieving that.

ADM: Can you elaborate on your plans for your Defence Capability Strategy and what you mean by capability transformation?

Hurley: What I'm trying to achieve with the Defence Capability Strategy is to give us a long term, more enduring view of where we're trying to take the ADF over time. It will particularly address the goals we see for capability areas, whether by environment or function. It should express within it the balance of investment decisions we've made in the department about what capabilities we think we need and how the balance of combat power needs to evolve over time. It will look at all aspects of capability, not just platforms, so will take into account force structure planning and so forth. I believe it will become the cap stone document for where the ADF is going.

And in that capability transformation the question is not necessarily what we'll fight with in the future, but how will we fight? So underpinning that capability strategy must be the concepts and doctrine that is needed, particularly if we are to embrace NCW in any meaningful way.

ADM: What do you hope to achieve by an Australian version of the US Defence Industrial Base Capabilities Studies (DIBCS)? Are we looking at a sort of harmonised list of US/Australian capabilities?

Hurley: What we saw in the process was a very good methodology that underpinned the development of the industry capability from the US perspective. The US is looking at key military technologies, how they can be supported either domestically or overseas and what policies they would put in place both to protect their technologies and exploit overseas technologies. That's not our thrust because we're not necessarily in that game.

We're looking at adapting the US methodology - it has a lot of similarities with the development of the Defence Capability Strategy - and looking at how we generate and sustain forces in Australia, and what are the industry capabilities we want to enable us to do that. It's not as focused on technology as the US, but we think that it is a great methodology to help us do some more meaningful work on looking at our industry capability requirements. We're having our first running our own version of the DIBCS very soon. It'll be interesting to see how that works.

ADM: Could this result in a harmonization of US and Australian capabilities and capability requirements down the track?

Hurley: Well, there are other ways of doing that. Under the AUSMIN Defence Acquisition Committee (ADAC) talks we have each year, (as part of the bilateral Australia-US AUSMIN talks), we have a requirements harmonization working group which I chair. Through that working group we have contact with most of the major conceptual work that's being done, certainly at the joint staff level. That enables us to look at the future implications of US transformation activities. This helps us take that information, apply it to an area like sustained logistics or decisive manoeuvre, and determine whether we can go down a similar path.

ADM: Do you expect you'll be able to achieve the 5-10 per cent up-front investment in project risk mitigation advocated by Kinnaird?

Hurley: I think we will but I'll just reinforce the point I've made a number of times - this is not a blanket application of 5-10 per cent every year across the DCP. It is on a project by project basis, as required. Most of our projects now, in their pre-second pass development stage are looking at anywhere from five to ten per cent invested up front and that's reflected in the increase in our project development fund in the last budget from $20 to $50 million per year.

ADM: The UK has taken a similar approach over the past few years in their Smart Procurement model. Do you see any lessons you could learn from that?

Hurley: Because they started a few years earlier than us we're watching their progress to see what benefits come out of it in terms of the impact on cost, schedule and the capability they deliver.

ADM: You've advocated more, and better focused, R&D by industry and the public sector; Dr Steve Gumley has done the same - how do you see industry enhancing its contributing to the capability development process as a result of increasing its R&D?

Hurley: I think it goes back to some of those questions about earlier involvement of industry, the publication of the DCP, and so on. The intent of that is to give industry early warning of what our capability directions and requirements will be. I think what we would seek, and the government would be very supportive of this, is the ability to buy more in Australia and more Australian-developed products. So if they can provide us alternate solutions that are cost effective or better value for money compared to going offshore we would welcome that. If their R&D leads to that from an up-front investment, that's what I'd be looking for, some good Australian alternatives.

ADM: At risk of sounding cynical, and I'm sure you've heard this before, there's a sense among industry that the "Not Invented Here Syndrome" operates in reverse in Australia. Do you have any words of comfort for industry on that?

Hurley: I'm very aware of this. There are obviously certain technologies which, if we want to be interoperable with the US, we will go to them for - most of them are self-evident. Once you move away from those we are going to be looking for who can give us the value for money solutions for our problems over the life of the capability, and if there were a greater Australian input or involvement then we would welcome that.