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Thursday, 26 March 1987
Page: 1612

Ms MAYER —On behalf of the Joint Committee of Public Accounts, I present the 267th report of the Committee entitled `Response to Review of Defence Project Management'.

Ordered that the report be printed.

Ms MAYER —by leave-This report presents the Government's response to the Committee's 243rd report on the management of major capital equipment acquisitions by the Department of Defence. Last year the Committee examined and reported in detail on 16 current or recent major defence equipment projects. Eleven of these projects failed or were not expected to be completed on time, completed to budget or completed to technical requirements. The Committee found that, in large part, this poor record was the result of ineffective project management and inefficient decision making procedures and resource management within the Department of Defence.

Against this background the Committee made 68 recommendations for action to improve the effectiveness and efficiency of defence project management and related departmental systems. The Committee report I have just tabled details the Government's response to these recommendations. In general the Committee welcomes this response. Fifty of the Committee's 68 recommendations have been accepted. These recommendations relate to a broad range of project management issues, including: Improvements to the operation of the Defence Department's capital procurement organisation; enhancement of the role, authority and operation of project directors; the development of professional project management skills in the Department; and the strengthening of contract administration and improvement of general relations with Australian suppliers of defence equipment.

However, the Committee is concerned that a number of important recommendations have not been accepted, or only partially accepted. These relate to the scrutiny of major defence equipment proposals; contracting matters; the selection of senior project management personnel; and reporting to Parliament on the defence capital equipment program. The Committee believes that the reasons advanced for the rejection or qualified acceptance of the recommendations are unsatisfactory. It strongly urges that the recommendations be reconsidered.

The Committee is still seeking progress reports on two measures taken by the Department: Firstly, on action taken to reduce the unacceptably long recruitment lead times for civilian project managers and staff in the Department and, secondly, on the result of the Department's proposed investigation of the feasibility of introducing a comprehensive resource costing system. A comprehensive costing system, the Committee believes, should allow the costs of departmental management resources to be allocated to individual projects and help minimise time-consuming management procedures. The Committee awaits the Defence response to these important recommendations. Because of the importance of the issues raised in this inquiry, the Committee intends to maintain its interest in defence project management. I commend the report to honourable members.