1.1
The 2016-17 Major Projects Report (MPR) is a consolidated review of 27 selected major defence acquisition projects (Major Projects) being managed by the Department of Defence (Defence). The total approved budget for this year’s MPR is approximately $62 billion, covering nearly 59 per cent of the budget within the Approved Major Capital Investment Program of $105.9 billion.
1.2
The MPR reviews overall issues, risks, challenges and complexities affecting Major Projects and also reviews the status of each of the 27 selected Major Projects, in terms of cost, schedule and forecast capability.
1.3
The MPR comprises a series of Project Data Summary Sheets (PDSSs) for each of the 27 selected projects and an overarching analysis by the Australian National Audit Office (ANAO) and Defence. Defence’s Capability Acquisition and Sustainment Group (CASG) manages the acquisition and sustainment of equipment and supplies for Defence.
1.4
The Major Projects Report is developed by Defence in conjunction with the ANAO. The objective of the report is to improve the accountability and transparency of Defence acquisitions for the benefit of Parliament and other stakeholders. It is prepared in accordance with Guidelines approved by the Joint Committee of Public Accounts and Audit (JCPAA). The MPR is automatically referred to the JCPAA in accordance with its statutory obligation to examine all reports of the Auditor-General that are tabled in the Parliament.
1.5
A historic focus of the Committee when investigating the MPR and the PDSSs has been on the transparency of the PDSSs and the business management of Defence.
1.6
The focus on transparency of the PDSSs facilitates third parties to analyse and use the information contained in the MPR. In recent years discussions between the Committee, ANAO and Defence regarding possible improvements to the PDSSs have focused on: “Materiel Capability Delivery Performance” and “Project Maturity” indicators.
1.7
The focus on Defence’s business management goes to the core of the Committee’s work on effective public administration. Possible improvements in this area have focused on risk management approaches and the sometimes optimistic assessment of delivery of capability estimates.
1.8
As discussed in detail in Chapters 2 and 3, the Committee noted the following issues:
The ARH Tiger Helicopters program was again the reason for a qualified audit finding
While Defence had performed well in implementing most of the Committee’s previous recommendations, it remained behind expectations in working to update Project Maturity Scores
Materiel Capability Delivery Performance charts continue to be ambiguous in displaying actual current capability levels
Schedule slippage continues to reduce over time, however, Defence will need to continue to monitor the issue
Projects continue to use spreadsheets as risk registers, a practice which poses some risks due to a lack of version controls
Work to improve the way risk is discussed in Defence continues
Liquidated damages has reduced year on year over the last five years
ARH Tiger helicopters continues to require remediation
The LHD Landing Craft project is expected to commence sea trials in the second quarter of 2018