The road is long
The December/January edition of ADM is a logical time to look at the year that was and the year ahead. 2018 saw a number of big announcements. As Minister for Defence Christopher Pyne reflects in his From the Source interview this month, the government has certainly lived up to its promise to increase the approval rate of programs at every level.
To recap: Land 400 Phase 2 to Rheinmetall Defence Australia’s Boxer, the Future Frigate program to BAE Systems’ Hunter class, cutting steel for the first Arafura class OPV from Luerssen/Civmec/ASC, and the JORN upgrade to BAE Systems. Plus there has been a host of other announcements under the $1 billion mark. It’s easy to forget the scale of the numbers that Defence works with when they are your everyday version of normal.
The other numbers that never cease to amaze me are the timeframes that Defence deals with. Programs that I began writing about when I started with ADM in 2006, I’m still writing about! And I’m pretty sure I’m going to be writing about the major programs that were decided this year until I retire in the very distant future.
Project management comes down to the golden triangle of schedule, capability and cost; you can always have two of the three performing well but rarely do all three come together in the right place at the right time. One senior Commonwealth leader once remarked to me that he could be held criminally responsible for his performance on capability and cost but not schedule; the side of the triangle that consistently lets down major complex programs.
The adage that time is money is not a priority as far as the Financial Management Act is concerned. The interpretation of value for money has also evolved over the years, with an increased emphasis on Australian Industry Capability (AIC) now a driving factor for programs large and small. Cheapest is not always the best value for money - a principle that is now being acted on rather than just spoken about.
Modelling from within Defence has shown time and time again that the majority of their projects do come in on time and on budget (if not under budget). The issue of re-baselining schedules is also an issue in this context. I know of many cases where unrealistic timelines have gone through the system, on both sides, in order to gain approval from higher powers; be it from government or from a parent company. Saying the schedule has been met because you changed the rules after contract signature is disingenuous.
Schedule updates are a necessary evil of course, particularly when it comes to developmental technology programs or those that require high levels of integration, but they should be an exception rather than an assumption.
Complex programs have a time scale that is out of step with both the posting cycle and the election cycle. There are uniformed staff that remember writing requirements for a program early in their career as a user that come back a decade later to act as the program manager for the same program, either in uniform or on the industry side of the ledger.
Vince di Pietro brought the time scale of these large complex programs home to me in a very human way, both during his time in uniform and now heading up Lockheed Martin Australia. To paraphrase, the parents of the crew of the Future Submarine haven’t met yet. Think about that for a moment. The echoes of decisions made now have huge downstream consequences.
This is why large complex programs need to have a continuous disclosure mindset as they progress (and not just through the Senate Estimates process, I might add). In 2019 I would love to see Defence on the front foot when it comes to explaining what they do and how they’re doing it when it comes to large complex programs. There are parts of the organisation that do this well and others not so much. The project story matters as much as the numbers.
With this in mind, I would commend you, dear reader, to have a good hard look at the Top 40 Defence Contractors and Top 20 SMEs this year. There are some spectacular numbers and stories in there.
This article first appeared in the December/January 2018-19 edition of ADM.