In what is arguably the biggest reform of the Defence Department in the last 50 years, Defence Minister Richard Marles announced the creation of a new procurement agency to replace the current Capability Acquisition and Sustainment Group (CASG), Guided Weapons and Explosives Ordnance (GWEO) Group and the Naval Shipbuilding and Sustainment Group (NSSG).
Marles said that the Albanese Government will establish a new and independent Defence Delivery Agency, which will come into being as the Defence Delivery Group (DDG) on 1 July next year with the merger of the existing three acquisition divisions. It will report directly to the Minister of Defence and Minister of Defence Industry.
The DDG workforce will be supplied by the current Groups and Marles said that there would be no reduction in numbers.
A new position, the National Armaments Director, will head up the organisation, which will undergo further reform to become the Defence Delivery Agency (DDA) from 1 July 2027.
“In that, the agency will be autonomous, it will work in partnership with the Department of Defence and the Australian Defence Force, but it will be autonomous in the way in which it does its work and the way it reports to Government through the Minister for Defence and the Minister for Defence Industry,” Marles said.
“We have increased Defence spending by $70 billion over the decade. What comes with that very significant increase in Defence spending – the largest in Australia’s peacetime history – is an obligation to ensure that this money is spent well.
“The establishment of the DDA will mean that advice comes to Government much more early in the process about the challenges that are facing any particular program, so that we can ensure those projects are delivered on time and on budget.”
The new enterprise represents the largest rethink of the defence procurement process since CASG was formed from the previous Defence Materiel Organisation (DMO) in June 2015.
Marles said that the capability acquisition identified in the Defence Integrated Investment Plan (IIP), will now be consolidated under the Vice Chief of the Defence Force (VCDF).
“Having then determined that a particular capability is required, that project will be then given to the Defence Delivery Agency, with a budget, to make sure that project is delivered on time and on budget,” he explained.
“This is one of the most significant reforms to Defence that we have seen. It will greatly change the way that Defence operates; it will greatly improve the quality of the Defence spend and it will make sure that as we spend more money in the Defence budget, we are doing so in a way that sees projects delivered on time and on budget.”
Also speaking at today’s announcement, Minister for Defence Industry Pat Conroy told reporters that he is seeing a rise in the numbers of complex Defence projects, from 27 per cent 15 years ago, to almost 60 per cent today. He said that when he took on his current role, 28 major projects were running a combined total of 97 years late.
“We’re establishing the independent project management agency, the DDA; it will report directly to ministers and it will have control of the budget for all of these major acquisitions once Government has approved them,” he said.
“It will have strong industrial and commercial skills, pulling the best and brightest from the private sector to complement the strong public sector expertise that already resides in these (existing) three groups.”
Defence Minister Marles also revealed that the much-anticipated audit of the Defence Estate will be released in coming months.