The 2023-2024 Major Projects Report (MPR), released by the Australian National Audit Office (ANAO) on 18 December, is the most secretive example of the report yet.
“Reporting related to capability delivery, especially reports that provide a holistic view of capability acquisition and sustainment, must take into account the risk to national security of inadvertent or unauthorised disclosure. Therefore, based on security considerations, some information for certain projects will not be published,” the Secretary of the Department of Defence, Greg Moriarty, stated in his foreword to the report.
What that means in practice is that out of the 21 Major Project Project Data Summary Sheets (PDSS), 20 have had information altered or removed from the public version of the MPR, though it was provided to the ANAO MPR team. The scope of those alterations ranges from omitting the forecasted Final Operational Capability (FOC) and Final Material Release (FMR) dates - as is the case for 16 projects including Project Land 19 Phase 7B and Project Air 7000 - through to declining to disclose any capability milestone dates for Project Air 555 Phase 1 and Project Sea 9100 Phase 1.
Notably, information about how long FOC has been delayed for all but three Major Projects has been removed from the report. The average combined schedule slippage across all 21 projects, however, was included as it could be aggregated together and is 25 months.
“Delivering Major Projects on schedule continues to present challenges for Defence. Schedule slippage can affect when the capability is made available for operational release and deployment by the ADF, as well as the cost of delivery,” states the MPR.
Despite those challenges, the Auditor-General concluded that Defence had largely met its requirements for the preparation of documents for the MPR set out in the 2023-24 Major Projects Report Guidelines with the exception of Defence's lessons learned process.
“The Guidelines require disclosure of a description of the project lessons (at the strategic level) that have been learned. Projects are to state whether ‘Systemic Lessons’ have been identified. Due to deficiencies in Defence’s processes over identifying and reporting lessons learned, I was unable to obtain sufficient appropriate audit evidence to conclude whether the disclosure of the lessons learned in Section 6 of each PDSS is in accordance with the requirements of the Guidelines,” stated the Auditor-General, Dr Caralee McLiesh.
The percentage of capability being delivered through MPR projects classed as ‘Green’ - where Defence assesses with high confidence that the desired capability will be delivered - has increased from 87 per cent in 2021-2022 to 94.5 per cent in 2023-2024. The percentage of capabilities rated as ‘Amber’ - meaning they are at risk but are manageable - has also shrunk from 10 per cent in 2021-2022 to 1.4 per cent in 2023-2024. Only ‘Red” capabilities - which are considered likely to be removed from the scope - have experienced a negative trend, with the percentage increasing from 3 per cent in 2021-2022 to 3.6 per cent in 2023-2024.
MPR Project Changes
The 2023-2024 MPR is also the first to include information about two significant rotary wing aircraft acquisition programs; Project Sea 9100 Phase 1 which is acquiring 13 additional MH-60 Romeo helicopters and Project Land 4503 Phase 1 which covers the introduction into service of Army’s AH-64E Apache capability.
It is also the first MPR not to include several significant programs that have now achieved capability milestones. Three Air Force acquisition programs exited the MPR including Project Air 7000 Phase 2, which covers the P-8A, Project Air 8000 Phase 2 which includes the C-27J, and Project Air 5349 Phase 3 which acquired 13 E/A-18G Growlers. One Army program - Project Land 53 Phase 1BR Night Fighting Equipment - and one Navy program - Project Sea 1654 Phase 3 which covers the Supply class Auxiliary Oiler Replenishment also exited the MPR despite the issues encountered by that fleet.
“The final system required under the Auxiliary Oiler Replenishment (AOR) ship acquisition contract was accepted by the Commonwealth; however, ongoing Latent Defects which resulted in neither ship being available at the end of the reporting period have delayed project closure. Final Operating Capability has been deferred, pending successful return of both vessels to operational service, which is now expected in 2025,” Secretary Moriarty stated in his section of the report.