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Defence projects - 'very high' risk of failure.

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Senator Chris Evans Labor Senator for Western Australia Shadow Minister for Defence

3 September 2002


An internal Defence Audit report, not previously released, warns of a very high risk of major capital projects failing over the next two years.

This internal report directly contradicts the Minister for Defence, who has claimed the problems have all been fixed and will not be repeated.

The report is an alarming warning that Defence procurement is failing and that taxpayers face further massive losses.

The Minister’s own Department has assessed that under the current arrangements there is a very high risk of major capital projects failing over the next two years.

This follows the admission that sixteen major projects are $5.1 billion over budget and up to five years behind schedule.

The Management Audit Branch in Defence has issued its own assessment of the risks facing the Department in 2002-03 and 2003-04. Major Capital Projects were identified to be at ‘very high risk’ and the impact of their failure would be ‘very high’ in terms of Defence capability and cost to the taxpayer.

The internal Defence report was written almost a year after the Government implemented the latest of its so-called reforms in Defence acquisition. Those reforms have clearly failed and the problems appear to be getting worse.

The Department of Defence has even indicated that the Government’s changes to Defence acquisition, implemented in July 2000, are contributing to the risk of projects failing.

In establishing the new Defence Materiel Organisation (DMO) the Government has caused a significant loss of experienced project officers.

The internal Defence report highlights the comments by the recently retired Vice Chief of the Defence Force, Lieutenant General Des Mueller, that the current acquisition arrangements need to be replaced.

For comment: Chris Evans 0419 983 593 Tim Friedrich 0408 577 617