Technical analysis and test and evaluation
Proponents of OTS acquisition have highlighted that the selection of
developmental products is a source of added complexity and greater uncertainty
to an acquisition project, thereby increasing the risk of problems emerging
during the procurement process. The committee observes that not only has this
view led to the current preference for OTS acquisition expressed by many in government,
Defence and the media, it may well have given rise to the increasing practice
of manufacturers claiming that products are OTS when in fact they turn out to
be developmental. Witnesses have presented numerous cases whereby the
expectation that a procurement activity is OTS has led Defence to believe that
a product is more mature or an outcome more predictable than experience (or an
experienced review) would indicate. The conspiracy of optimism, referred to by
a number of witnesses, appears to have led Defence to undervalue the role that
developmental test and evaluation can play in the early stages of the
acquisition cycle to identify and analyse risk in a quantifiable and defensible
The committee also notes observations made by the Helmsman Institute
suggesting that the complexity of some Defence projects was so high that they
were 'placed at risk of never delivering the required capability, and failing
This has proven to be true even for some projects that were presented to be OTS,
such as the MU90 where integration across a number of platforms was compounded
even further by a decision to constrain phasing to line up with other projects
(for example JASSM on AP3). It has also proven to be the case where other
purchasers withdrew, leaving Australia holding more of the risk. There is a
moral hazard faced by industry and CDG in that both parties have an incentive
to support the view that a particular technological reach or level of
integration with other weapons systems is achievable.
The committee notes that this conspiracy of optimism may have tended to
crowd out or ignore dissenting voices that could alert Defence to the true
extent of capability, technology, integration and certification (hence cost and
schedule) risk represented by a proposed project.
In the previous chapter, the committee referred to the importance of Defence
being a knowledge-based organisation: of having a deep understanding of the
products it intends to purchase; and of the critical importance of having the
right people able to ask the right questions. It is particularly important to
note that the problems experienced by some projects were due to an underestimation
of the amount of developmental work required. This lack of knowledge about the
technical maturity of a capability raises the question about the analysis undertaken
of the proposed project, and highlights to the committee the absence of early
test and evaluation conducted by qualified ADF T&E practitioners as part of
a structured risk identification process. In this chapter, the committee uses
test and evaluation as a means of assessing the quality of analysis
underpinning Defence's capability development process.
According to Pappas, technical risk accounts for more than 50 per cent
of post approval slippage in projects approved after the Kinnaird review.
Many analysts, advisers and Defence and industry personnel familiar with defence
procurement recognise that purchasing off-the-shelf can reduce the risk of
things going wrong. Usually, the costs are known and the performance is proven.
The government endorses these views. The 2009 White Paper and Defence's
procurement manual make clear that off-the-shelf solutions to Defence's
capability requirements 'will be the benchmark against which a rigorous
cost-benefit analysis of the military effects and schedule aspects of all
proposals will be undertaken'.
As noted, in the previous chapter, this discipline while necessary to limit the
developmental risks of service wish lists, restricts the need for industry
locally to grow engineers through developmental activities. It has also
unfortunately been used as a rationale to limit the same development of skills
with Defence, both at the high tech end of capability assessment, and for
operational and sustainment activities. The longer term effect is that Defence
has fewer qualified people able to test and evaluate thoroughly information
provided by industry early in the procurement process, especially where it is
not all that it is marketed to be (i.e. the system is still really
developmental or that the level of integration sought with other platforms may
in fact be difficult to achieve).
It does not automatically follow that MOTS requires sustainment to be
outsourced either domestically or overseas. Such decisions should depend on the
normal costs and benefits, local industry capacity, and any strategic needs for
self-reliance. Regardless, there must be in place within Defence a cadre of
technical skill to manage properly both procurement and sustainment with
assured continuity, integrated organisationally under single line
accountability, drawing on a superior skill base supported with career paths,
and without the risk of complete dependency on suppliers.
Possible secondary risks
Although recognised as an effective way to reduce risk, purchasing OTS may
introduce secondary risks that need to be assessed, treated, monitored and
reviewed. Miller Costello and Co noted that a MOTS procurement can be 'either a
model for risk management or it can disguise risk and lead government into
painfully bad decisions'.
So while OTS may initially be the preferred option, it may also pose
significant risks that involve:
- modifications that may be necessary to meet Australian standards
and operational conditions (yet perversely the emphasis on OTS, and therefore
funding and involvement of agencies, may preclude adequate planning for this to
the integration of an OTS purchase into the ADF's existing and
anticipated future capability;
issues related to the sustainment and upgrading of the asset
throughout its anticipated life and decommissioning and the associated costs;
- medium to long term degradation of ADF's capacity to be a smart
With regard to the last dot point, the committee notes that OTS may be
purchased under terms that preclude any ADF unique modifications which may further
reduce the opportunities where Defence can grow and sustain skill sets such as
engineering, certification, T&E and R&D, and increase dependency on
Other witnesses similarly underscored the caution Defence needs to
exercise when purchasing an OTS product.
Defence also noted the limitations of an OTS purchase. It acknowledged
that while OTS equipment minimises procurement risk, such equipment would 'not
always meet the needed long-term capability requirement'. It stated further an
OTS may not readily integrate with other capabilities in service; may not
always be available; may not suit Australia's geographic and strategic
circumstances; and/or may not be available in a timeframe that allows Australia
to avoid gaps in its defence capability.
Despite this awareness of possible technical complications associated
with OTS, decisions have been taken on such purchases that clearly indicate no
robust consideration was applied to such risks. Indeed, one of the identified
causes of problems in defence procurement has been the underlining assumptions
about products purchased off-the-shelf. The Helmsman Institute noted:
A number of projects started with the assumption that as a
product was being offered as an existing design by a supplier, that the product
was 'Off the Shelf'. The approach that was then applied assumed that the
product could move into mass production immediately. Helmsman believes that
true 'Off the Shelf' approaches can only be used if the products have achieved
a high volume production rate and are in service in significant numbers in
military service, and will only have limited customisation to fit local
All other projects need to assume that high levels of testing
and evaluation will be required for testing and acceptance given the ADF
regulatory environment. Helmsman believes that some of the highest complexity
added to projects was that created by 'First of Type' or 'Early in Type'
products being treated as 'Off the Shelf'. The unplanned need for substantial
certification, systems integration, design and modification created addition
complexity in stakeholder management, cultural clashes and journey complexity.
Accordingly, even an apparently straightforward purchase requires
a deep knowledge of the product.
Thus, with OTS products, Defence needs the capability to exercise a rigorous
test and evaluation regime in order to understand fully the maturity of the capability
it intends to acquire. Clearly then, for customised purchases and developmental
projects the need for sound and comprehensive analysis is even greater. For
example, the committee has referred to the conspiracy of optimism where both
industry and the customer are drawn toward the leading edge technology. The
danger is that 'an ambitious set of specifications' could be locked in before
the associated risks are properly identified and understood.
Mr Bruce Green noted that going beyond the 'leading edge to the bleeding edge
of technology is a recipe for disaster as these types of projects just bleed
Analysis—test and evaluation
Kinnaird fully appreciated the central role of analysis in defence
procurement practices. In his view, there must be:
- detailed analysis of the options to achieve a required military
effect before adopting a platform-based solution;
- a higher proportion of project funds spent on early analysis to
improve project outcomes, which would represent an investment that can return
dividends in terms of greater certainty in regard to costs and a better
understanding of project risks; and
- rigorous analysis of technology, cost and schedule risks, backed
by external verification, which is essential before any project is put to
Mortimer also recommended that 'any decisions to move beyond the
requirements of an off-the-shelf solution must be based on a rigorous
cost-benefit analysis of the additional capability sought against the cost and risk
of doing so'. He stated that this analysis must be clearly communicated to government
so that it is informed for decision-making purposes.
For projects that are not genuine MOTS, Pappas similarly recommended that
'improving technical risk management practices would help reduce schedule and
cost escalation'. Specifically, this would involve:
- greater investment of project expenditure in de-risking projects;
- not progressing projects until they reach the required level of
- separating technology development from product development; and
- greater involvement of technical scrutineers (who need
developmental activities if the ADF is to grow this skill) and better use of a
Many witnesses underscored the importance of good quality and
'systematic independent analysis'.
In this regard, the ANAO noted that 'International experience shows that
adopting a systems engineering approach in concert with program management of a
high order offers the greatest likelihood of success for the delivery of
complex and large scale projects, including Defence major capital acquisitions.
Systems engineering involves the orderly process of bringing
complicated systems into being through an integrated set of phased processes
covering user requirements definition, system design, development and
production, and operational system support.
People familiar with the complexity of defence acquisitions appreciate
the critical role of test and evaluation (T&E) activities in providing information
about risk and empirical data to validate models and simulations.
Defence similarly recognises T&E as an integral part of the systems engineering
process for identifying and reducing technical risk in the acquisition of
defence equipment, though this recognition is on paper and not necessarily in
practice. The focus on OTS however has led many to believe
that Defence only requires a T&E capability at the end of the process: i.e.
operational T&E as part of introduction into service. What numerous Defence
projects have shown however is that Defence must sustain, develop and employ
personnel with experience in developmental T&E in order to conduct
pre-contract analysis with rigour.
T&E is a process that can be applied at the initial feasibility
stage of a project and continues through to its delivery into service. Clearly,
T&E at the feasibility stage helps ensure that a capability will operate as
intended and can be produced in line with cost, schedule, and quality targets.
This observation about the importance of early analysis is based on wide
For example, with regard to technology risk, the GAO noted:
When technology risks are not managed early, an acquisition
program can run into difficulties in later phases. Having a feasible, stable
preliminary design for a weapons program early in the acquisition process is
also important in lessening risk...by demonstrating that a product's design can
meet customer requirements, as well as cost, schedule, and reliability targets.
Supporting this contention that the customer cannot leave all design
activities to the manufacturer, the GAO found that in recent years programs
that have held critical design reviews reported higher levels of design
knowledge. The committee notes the Haddon-Cave Review (UK) which found that a critical
design review is only of value if the stakeholders involved (including the
customer) have the necessary qualifications and design/certification experience
to understand and challenge the information presented to them.
Witnesses similarly referred to the value of early research and
The Australian Business Defence Industry Unit noted that in order to avoid
problems, a project must be set on the right course from the start. It
suggested that 80 per cent of problems occur in the first 20 per cent of a
Air Marshal Harvey agreed with the proposition that there is a case for conducting
detailed technical risk analysis of a proposed capability at an earlier stage. He
indicated that Defence do so, though not initially, in a formal technical risk
analysis sense. According to Air Marshal Harvey technical risk analysis
supports both first pass and second pass and forms part of the capability gate
He made clear that DSTO follows 'a very rigorous process' for its technical
assessments for first and second pass.
The committee notes that the Air Marshal was referring to the process
and not the capacity to analyse relevant risks (technology, integration,
capability and certification). The committee has already noted the difference
between process and application: i.e. what the manuals prescribe and what
actually happens, as noted on many occasions by ANAO. Also, Air Marshal Harvey referred
only to DSTO advice. The visit to the
Aerospace Operational Support Group at RAAF Edinburgh highlighted to the committee
that Defence has other centres of expertise that should be more effectively
utilized early in the procurement process to identity the full range of risks
presented by a particular solution.
The committee notes that a capacity to conduct developmental T&E is
the same skill set as that needed to conduct effective risk identification and
analysis. Proponents of OTS acquisition rightly point out that the original
equipment manufacturer does not require ADF to have a developmental T&E
capability—that it is industry's job to provide people to run that part of the
process. But without a developmental T&E capability, Defence cannot assess
the veracity of what they are being told or shown, either in absolute terms or
within the certification and training frameworks required by Australia. The
number of products accepted as OTS when they were in fact developmental has a
strong correlation to situations where T&E expertise was not available, not
engaged or not listened to.
Ultimately, under the current process, the Chief Defence Scientist is
responsible for the provision of technical risk assessments, technical risk
certifications, the development of project S&T plans and for providing
other S&T support as required.
As one of the fundamental documents that support the first pass approval, the
TRA forms part of the Capability Proposal First Pass and needs to be in place.
The Project Science and Technology Advisor, a DSTO officer, prepares
the TRA for second pass approval. It is intended to allow Defence to advise government
on the areas and levels of technical risk of the options being proposed for
acquisition. The Chief Defence Scientist signs off on the Technical Risk
Certification which is included in the ministerial or cabinet submission.
There is no doubt that the procurement system should be sufficiently
robust to ensure that information on the readiness of a platform for
operational service is known. But as noted in chapter 5, one of the problems
with risk management is the lack of awareness or the unresponsiveness of some
personnel to emerging risk. Evidence suggested that despite Defence's
recognition of the importance of test and evaluation, Defence does not pay
sufficient attention to this most important aspect of risk management.
For example, notwithstanding Kinnaird's recommendation for small amounts
of early up-front investment to quantify and minimise risk in complex projects,
some witnesses were concerned that that was not happening.
In his review of the latest Major Projects Review, Air Commodore (retired)
...the primary cause of project risk lies in the operational
and technical areas of the project, and that these (largely potential and
manageable) risks demand a very different approach, an approach requiring
skills and competencies different from commercial (contract terms and
conditions) management. Effective capability management requires that all
capability functions—operational, systems and equipment engineering, test and
acceptance functions and support requirements, including their associated
risks, must come under tight Project and Systems Engineering management, and
that commercial management must be constrained to contract management that
supports project management objectives.
In his view, the difficulties that are endemic throughout Defence's
major projects indicate that 'the DSTO's capability development, test and
acceptance and technical risk assessment and management input have not been
adequate'. According to Air Commodore Bushell, such tasks 'were historically,
and still are, a natural extension of the fundamental responsibility of the
Capability Managers for raising, training and sustaining force'. He argued that
DSTO has a role to play, but 'it is one that supports the Capability Managers,
not replacing or double-guessing them'.
In the previous chapter, the committee highlighted the overall shortage
of skilled engineers in the area of defence procurement, especially in the Services,
and most notably the hollowing out of such skills in the Navy. This shortage
has serious implications for test and evaluation.
Air Marshal Brown gave the AEW&C as 'a classic example' of where
there was inadequate T&E. He named two core things that were not done correctly
on that project. The first was the contractor's decision to use emulators
instead of real equipment on the systems integration lab. He explained
that this decision meant that 'a lot of the integrations problems, instead of
occurring inside the lab, occurred when we built the aeroplane'. According to
Air Marshal Brown:
That decision was objected to by the Commonwealth quite
strenuously at the time, but it was taken on a cost basis by the contractor. He
decided that that was one way to save money, and they were confident in their
He then referred to the AEW&C program's six-month development, test
and evaluation program. He informed the committee that:
If you benchmark that against any other similar sort of
highly developmental program, you will find that most people allow about three
years. Guess what? That is about the time that it has taken us to do...My view of
that program is that we have lost time but we are going to end up with the
capability we contracted for.
During its visit to South Australia, the committee learnt of another
example of inadequate T&E. The committee was told that Defence believed the
MRTT to be effectively an OTS purchase, with all indications in the tender
process pointing to a purchase with a proven performance record for each of the
major systems involved. Late in the program, however, the Australian test team
needed to be boosted in numbers in order to get the data it needed to have the
aircraft accepted into service. The committee also heard that Defence did not
articulate clearly enough the Air Force's certification requirements in the contract.
Finally, Defence did not manage its observation of the overseas tests at all
well, resulting in a gap in its understanding of the tests. Defence did not
make early investment in developmental T&E qualified staff on the resident
project team a sufficient priority.
The committee's findings on T&E in defence acquisition projects are
consistent with those of the broader issue of risk management in Defence's
procurement of major capital equipment. Defence believes that its procedures are
appropriate and should ensure that up front analysis followed by systematic
test and evaluation activities would prevent unexpected major technical
difficulties surfacing later in a product's build. The type of problems that
emerged with the Super Seasprite, Landing Watercraft, Wedgetail, Tiger, the
MRTT and the MRH-90 Helicopter suggest otherwise.
If in fact DSTO is solely responsible for technical risk analysis as has
been asserted, then the committee suggests that Defence fails to understand the
full gamut of technical risk analysis and management from project inception to
completion. If in fact CDG is no longer required to fund a preview evaluation
by a qualified developmental test team, the committee's concern is amplified. The
difference in quality of risk analysis from a CDG officer without relevant
experience who is following a 'more thorough checklist of questions' as
compared to that provided by a subject matter expert drawing on experience
seems to be lost on Defence.
The committee has considered the underlying causes for the discrepancy
between written guidelines and procedures and the implementation of sound risk
management practices. The same causes are evident with Defence's T&E regime—non-compliance
with policy and guidelines and unawareness or unresponsiveness to risk. As an
example, the ANAO found that in a number of cases, the description of technical
risk for project proposals did not provide sufficient guidance for
decision-makers, or provide confidence that an adequate risk assessment had
The committee has already referred to the observation made by Pappas that
DSTO's technical risk assessments were not always paid the respect they warranted.
As the examples in chapter 2 clearly attest, the same observation can be
applied to risk assessed by other Defence T&E personnel.
The lessons to be learned from recent projects underscore the need for
improvement in test and evaluation. Such observations have particular relevance
for defence projects still in the early stages of their capability development
especially the need for up-front investment in research and analysis.
Resourcing test and evaluation
The committee notes that Kinnaird found that greater resources needed to
be allocated to conduct comprehensive and rigorous T&E programs as part of
In this regard, the committee highlights a stark message that came out of the
committee's site visits to South Australia:
An organisation cannot support high technical capability
without the ability to test it. If it does complex things, it should set
requirements but importantly it must understand the skills set it needs to
Dr Davies stressed a recurring theme throughout this inquiry that improving
the quality of analysis is needed rather than improving the quantity of process
and of information.
He also acknowledged that it takes a long time to grow that analytical
capability. In his view, Defence, in the first instance, might have to rely on
external contractors with expertise such as the RAND Corporation and Access
Economics and use this expertise at least until in-house analytic capability
can be built up.
In this regard, the committee notes the challenges facing the capability
managers in developing this level of expertise which to date, only exists in a
formal sense for the aerospace domain. For example, Service chiefs are
responsible for the initial officer training and specialist training (engineer,
pilot etc) and for the 2–3 years of operational experience. Each individual
T&E practitioner requires a further year of masters level full time
training at a cost of around $1 million. After training, there is normally a
period of 1–2 years of supervised T&E conduct and involvement in the ADF
airworthiness and certification systems before an individual would be deemed
competent to support DMO in a project role away from the test centre. Thus
T&E personnel would need to enter the training pipeline several years well
in advance of a project's need. This capacity therefore has to exist ahead of
the project but given the high cost of training, should be an integral part of
a consolidation capability procurement and sustainment team under the direct
control of the capability manager, in line with the committee's preferred
In its report on materiel acquisition and management in Defence, tabled
in March 2003, the committee expressed a lack of confidence in Defence's
'capacity or will to address T&E concerns seriously'. At that time, Defence
was preparing a revised T&E policy. The committee was particularly keen to
ensure that the policy would be fully integrated (planned and funded) with the
capability development process; provide for T&E to be carried out in an
independent fashion; and embed a 'cradle to grave' philosophy.
Five years later, in its 2008 T&E Roadmap, Defence highlighted a
raft of shortcomings in Defence's T&E pointing to a need for greater
funding, improved training and attracting and retaining skilled and experienced
personnel. They included:
- many existing Defence T&E facilities were approaching (or had
reached) the end of their useful live and without significant upgrade and
investment, they would be unable to adequately meet future weapon system or
joint capability T&E requirements;
- there was no coordinated approach at a Defence level to identify
T&E facilities necessary to support the DCP;
spending needed to be prioritised to ensure that the appropriate
T&E facilities exist or are accessible...;
- Defence would need to develop a T&E approach that enables the
application and coordination of T&E across platforms and environments;
- inadequate funding—there are constant pressures on projects to
under-resource T&E activities and funding for reworking and regression
testing, which appears to be inadequate in many current projects;
- significant gaps in competency recognition, which potentially
made T&E less attractive than other career paths;
- no formalised career management of personnel with T&E
expertise and experience;
- most training was 'on the job' and there was high staff turnover
as well as difficulty recruiting and retaining technical officers and engineers;
- limited, and in some instances, a complete lack of T&E
expertise in some specialist capabilities within Defence or Australian
- while Maritime and Aerospace T&E was generally well
conducted, the Land environment did not have an organisation responsible for
undertaking OT&E and acceptance into service;
- at the combat environment and Joint Force Operating levels,
Defence lacked both organisations and resources to manage, coordinate and
undertake T&E to ensure the integration of capabilities through a common
methodology that was based on, and aligned with, relevant standards and
- information to assist in the development and conduct of T&E
activities was often difficult to obtain; this was often the case when the
equipment was procured from foreign organisations;
- current approach to the T&E during the acquisition phase
often appeared to have industry performing T&E activities in isolation from
the Commonwealth. (The committee understands that sometimes because of cost
pressures and limits on overseas led projects choosing not to fund the posting
of T&E practitioners to the resident team location (often overseas)
contract negotiations do not provide for Defence T&E staff participation);
- project schedules were tight, placing pressure on all aspects of
the project including the conduct of effective T&E, particularly the
critical elements such as testing of key FIC related elements pertaining to the
measures of suitability; and
- it would be more efficient if Defence adopted a model where
T&E subject matter experts were engaged during the concept and requirements
development stage for each project to assist with the specification of project
T&E requirements (for example, Air 87).
The Roadmap indicated that steps would be taken to address these findings.
Vice Admiral Jones, the sponsor for T&E, recognised that the Roadmap
was 'quite a significant document' though he noted that there were 'a lot of
utopian views in it and a bit of nirvana'.
This observation appears to be at odds with the clear articulation of the need
for a robust T&E capability in Defence from previous reviews, reports and
witness statements which lend weight to the recommendations of the 2008 T&E
Roadmap. Vice Admiral Jones referred to work done since the publication of the Roadmap
which has resulted in:
- a much more coordinated approach to T&E within Defence and
the creation of an Australian Defence Test and Evaluation Office (ADTEO) within
the Capability Development Stakeholder Group (CDSG);
- issuing unifying policies on T&E, acceptance into operational
service amongst the Services and the conduct of trials;
- the formation of a T&E community within Defence with annual
meetings of T&E principals; and
- a 'big increase' in pre first and pre second pass trials.
In particular, he referred to the early test planning directorate, a
group of six individuals, who specialise in writing test concept documents
which they write in conjunction with the relevant T&E organisations. Group
Captain Keith Joiner, Director General Test and Evaluation, explained further:
We are tightening that journey of discovery process there, so
we have introduced a large number of additional questions into the test concept
document writing guide as a result of some of the experiences we have had
bringing into service military off-the-shelf and commercial off-the-shelf. That
is delivered annually to the T&E principals, so it gets input from all
domains, not just land and joint.
The committee notes with concern that there appears to be a significant
investment in form and process but not necessarily in the professional
qualifications and work opportunities to gain relevant experience that
will—over time—lead to real capacity to identify and analyse risk prior to
Mr King accepted that at one time Defence 'did too much trusting and not
enough verification' but was also of the view that Defence had 'moved on quite
a distance from there'. Even so, he thought there was a role 'for improved
analysis and testing of clams of maturity'.
Based on the committee's 2003 report, the 2008 Roadmap and more recent evidence,
the committee is not convinced that Defence is moving quickly or decisively
enough to address the matters raised in 2003 and 2008.
For example, the committee understands that ADTEO largely coordinates or
conducts operational T&E for the land domain and coordinates some joint
OT&E activities. However, the committee is also advised that its staff have
no capacity for developmental T&E and the organisation plays no role in the
management of the ADF's only developmental T&E agencies— Aircraft Research
and Development Unit and Aircraft Maintenance and Flight Trials Unit. Their regulations
are contained in ADF airworthiness regulations maintained by Air Force. If this
is the case then the committee believes that significant rationalisation of
both T&E policy and practice is required.
Moreover, looking ahead to where Defence needed to go, Vice Admiral
Jones indicated that there would be a defence manual 'which all the services
and DMO and DSTO and CDG have to sign up to'. He explained that in the manual 'we
actually have to start to chart where we are going to go with the workforce and
how we are actually going to grow and sustain the workforce'.
According to the Vice Admiral, standardisation and professionalisation remains an
area where 'there is a lot of work that we have to do'. He stated:
At the moment we are in this situation where we have started
to really get a much greater appreciation across the board of the importance of
T&E, so that has been a big change probably in the last five years and we
are seeing the value of that objective data for our decision making. But what
we have to...have is a sustainable path for our workforce, and we see this next
iteration and development of a manual as an opportunity whereby we can tease
some of those issues out and then actually have some goals to set for ourselves
to get to where we need to be.
The committee notes that Defence was reviewing and developing a T&E
concept paper and policy in 2003 and that its T&E Roadmap was produced in
2008. Now, Defence is still talking about producing a manual—that is about
process. In this regard, the Haddon-Cave Review into the loss of the RAF Nimrod
aircraft has some salutary advice for Defence:
The instinctive reaction of many governmental organisations
to problems is the creation of more complexity, not less, and the 'bolting on'
of more process, procedures, boards, committees, working parties, etc rather
than stripping away the excess and getting down to the essential elements. The
net result for the MOD was, unfortunately, an increasingly complicated safety
and airworthiness system which was accompanied by a significant weakening of
airworthiness oversight and culture during the period leading up to the loss of
XV230 in September 2006. Over the past decade, responsibility for risk and risk
management has been divided, dissipated and dispersed. Risk has effectively
been 'orphaned' by being made part of an extended family, with everyone
involved but no-one responsible.
In the committee's view, while the people who own the process are
talking about manuals, those with the responsibility and competence are not being heard.
Defence would have the committee believe that the organisation has an
integrated and effective T&E regime operating throughout the capability
life cycle to minimise the chance of unexpected technical difficulties arising.
The T&E activities are meant to ensure the delivery of a fully functioning
platform with safety-critical systems meeting all requirements. In practice, however, the failings indentified in
some major projects stem from poor quality or inadequate analysis. The
committee reinforces the message that early investment in analysis is an
indispensable component of an acquisition. The Service Chiefs, in particular,
as the ultimate users of an acquisition, must have the personnel with the
skills and experience to stipulate from the early stages of a capability
development cycle the test and evaluation activities required before they will
accept an asset into service. Hence the committee's concern in principle about
the real responsibility of the capability manager.
The committee recommends that the government make a long-term commitment
to building technical competence in the ADF by requiring Defence to create the
opportunities for the development of relevant experience.
The committee recommends that capability managers should require their
developmental T&E practitioners to be an equal stakeholder with DSTO in the
pre-first pass risk analysis and specifically to conduct the pre-contract
evaluation so they are aware of risks before committing to the project.
Given that the capability to conduct this T&E and analysis needs to
be extant prior to the commencement of any given project, the committee is
concerned that cost pressures will lead individual services and projects to
degrade this capability over time.
The committee recommends:
- the immediate finalisation of central defence policy on
T&E to be implemented by capability managers in line with the committee’s
recommended shift of full accountability for capability managers for all
technical assessment of capability procurement and sustainment (independently
assessed in conjunction with DSTO);
- full responsibility for the implementation of prescribed
T&E processes be assigned to capability managers for all procurement
activity from inception through to acquisition and sustainment; and
- each capability manager should ensure adequate skilled
resources to oversee all T&E activity in line with central policy, as part
of all acquisitions, including MOTS, as part of the capability managers’ total
responsibility for procurement, but prior to as well as after second pass.
The committee recommends that Defence build on the capability already
extant in aerospace to identify training and experience requirements for
operators and engineers in the land and maritime domains and apply these to ADTEO.
Capability managers will need to invest in a comparable level of training to
enable their personnel to conduct (or at least participate in) developmental
testing. The intention is to provide a base of expertise from which Defence can
draw on as a smart customer during the first pass stage and to assist in the
acceptance testing of capability.
The committee recommends that Defence mandate a default position of
engaging specialist T&E personnel pre-first pass during the project and on
acceptance in order to stay abreast of potential or realised risk and
subsequent management. This requirement to apply also to MOTS/COTS acquisition.
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