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Thursday, 29 October 2009
Page: 7735


Senator Cash asked the Minister for Defence, upon notice, on 15 September 2009:

With reference to the Australian National Audit Office audit report no. 48 of 2008-09, Planning and approval of Defence major capital equipment projects: (a) what action has been taken to comply with recommendations nos 1 to 4; (b) what additional costs will be involved in implementing each recommendation; and (c) was any additional funding sought in subsequent budgets for any additional costs to be incurred in implementing each recommendation.


Senator Faulkner (Minister for Defence) —The answer to the honourable senator’s question is as follows:

Defence agreed with all four recommendations, noting that these were mirrored in the information Defence had gathered during the White Paper process. While the ongoing implementation of these recommendations has been embedded in the Strategic Reform Program, specific responses to the three questions are as follows:

(a)   The actions taken to comply with each of the four recommendations are as follows: Recommendation 1. Defence will engage with Department of Finance and Deregulation, Department of Prime Minister and Cabinet, and the Treasury to develop a revised process for early and ongoing involvement in the evaluation of capability proposals. Defence aims to finalise this process by the end of 2009. Recommendation 2. Capability Development Group (CDG) has developed internal group policies, along with the compliance and training requirements, to improve CDG’s records management. Recommendation 3. Defence has developed processes that ensure all Cabinet submissions for future acquisitions do include a statement of the technical risks as stated by the Chief Defence Scientist. Furthermore, the Defence Science and Technology Organisation will refine its methodology for assessing and describing the technical risks for future acquisitions and plans to develop a Technical Risk Assessment Manual which will set out the methodology for assessing and describing technical risks in acquisition projects. This manual will be developed in consultation with CDG and the Defence Materiel Organisation staff to ensure consistency with capability development and acquisition processes. Recommendation 4. Defence now ensures that capability submissions contain a calculation of the future personnel and operating costs, in the context of explaining the derivation of Net Personnel and Operating Costs, with this requirement now mandated for all capability Cabinet submissions.

(b)   There are no additional costs involved in implementing Recommendations 1, 2 and 4. The actions taken to address Recommendation 3 are cost neutral. While some effort is required to prepare the proposed Technical Risk Assessment Manual, this effort will be offset by improved technical risk assessment quality.

(c)   No.