Table A.3:Navy Materiel Sustainment Agreement Performance Framework - Core Key Health Indicators. 5.57A briefing to DMO Division Heads in September2011 summarised the shortcomings of Defences approach to sustainment in the absence of an asset management approach: 5.58In 2011, DMO set about developing a Sustainment Business Model drawing on generically applicable asset management principles.179 There is then little evidence of substantial progress of the project for some years. The audit found that Defence had established and continued to refine a generally sound Materiel Sustainment Agreement (MSA) framework to facilitate the management of sustainment activity for specialist military equipment. They are mandatory for all procurements valued at greater than two million Australian dollars (AUD$2m), and guidance for all others, unless exemptions apply. This method produces a rough order-of-magnitude estimate, and is generally used early in the life cycle of a new asset/system when technical definition is immature and insufficient cost data is available. In this light, the cost of those staff is a substantial omission from the apparent price of services facing the capability manager. Contracts with the principal provider are not performance-based. This issue could be managed provided the scope of any sustainment review is appropriately selected. These tests also apply regardless of treatment as a direct cost Costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. 12For example, the Kinnaird and Mortimer reviews recommended an independent entity. Maintenance is still a large cost component for sustainment of these systems but regular replacement is more significant in comparison with platforms. Commonwealth Procurement Rules | Department of Finance The following paragraphs provide an overview of the contents of the 201516 performance documents. collaborating with a university recipient would be subject to the cost principles The government-wide principles, issued by OMB (or, in the case of commercial organizations, the Federal Acquisition Regulation [48 CFR 21], or, in the case of hospitals, 45 CFR 75, Appendix IX, "Principles For Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals"), on allowability and unallowability of costs under federally sponsored agreements. These are known within Defence as Fleet Screenings.23 While Fleet Screening procedures vary among the Services, the intent is broadly similar: that is, to review the funding allocated to sustainment through the MSAs, and make decisions about changes to funding levels, equipment operation, or performance indicators.24 For example, additional funding may be required for equipment that has recently returned from operations. It provides only a partial account of materiel sustainment within Defence and is potentially at odds with the One Defence model promoted by the First Principles Review. That review found shortcomings in the application of procurement principles, which exposed Defence to risks. External Maintenance Period Activity Cost Growth. A primary example is the detailed, technical paper produced by Navy in 2006, A Quantitative Approach to Navy Performance Measurement. A Smart Buyer collaborates with Industry and engages early and throughout the Capability Life Cycle. Following the change in government in 2013, it terminated work on the Strategic Reform Program. the experience, skills and competencies of Systems Program Office staff; [Systems Program Offices (SPOs)] not being able to manage to an effective asset management plan; Disrupted maintenance schedules, affecting availability and increasing costs; Shortened life of type, and increased whole-of-life cost; and. Setting the Direction 3. CASG was also managing 109 sustainment products with a total annual budget of A$7.7 billion; for a total annual budget of A$17.0 billion.[2]. However, they are not conducted according to any auditing standard. The Review found, in terms similar to those of Coles: In fact, the general comment is that sustainment is the poor cousin to acquisition.28 In June2017 Defence advised the ANAO that it was attempting to address this perception through the current round of reforms, such as the new Capability Life Cycle and the December2016 release of Support Procurement Strategies. A Smart Buyer will also enable appropriate financial return for its Suppliers. 5.65The audit found limited evidence that Defence was preparing to evaluate the reforms to Capability Acquisition and Sustainment Group, its execution of the reforms or their outcome in terms of improvements to either acquisition or sustainment. The instruction was cancelled in March 2014 and replaced by the Defence Logistics Manual, DEFLOGMAN Part 2, Volume 10, Chapter 16, Life Cycle Costing Analysis. The success of the contract will be measured by Defences ability to operate without Bechtel support at the end of the contract, rather than by any specific product delivered by Bechtel. The Department of Defence welcomes the Australian National Audit Office (ANAO) performance audit on Defences management of materiel sustainment. However, they are in a different order, which may reflect changes in organisation following the delisting of DMO. In February2016, the Deputy Secretary, Capability Acquisition and Sustainment Group, informed the First Principles Review Implementation Committee that the business framework project has commenced and been resourced to deliver a fundamental rebuild of all Group processes.159 The completion date was extended to 1July2016 and the objective was to have a High-level business framework approved. 34. Defence informed the ANAO that both measures are based on direct product costs incurred by the Capability Acquisition and Sustainment Group and do not include sustainment costs incurred by other parts of Defence. For example, those sources state: The 2016 Houston Review also found that the full potential of the Australian Tiger program, when reached, will not be adequate to provide the robust, reliable and sustainable aviation reconnaissance and attack capability that Army requires. a sustainment gate review of Air Forces Airborne Early Warning and Control fleet, which observed that all Systems Program Offices staff needed to be fully capable to deal with a complex platform and small fleet of aircraft. Progress in implementing the quoted recommendation has not been explicitly tracked with the other recommendations such as 2.12 and 2.13 in regular reporting on progress of the First Principles Review. 130, Overview of the enhanced Commonwealth performance framework, July 2016. Capability Acquisition and Sustainment Group officers have stated that, because of the lack of internal capacity and expertise, the group has depended heavily on consultants/contractors with its reforms. 3.12In a recent submission to the JCPAA, Defence stated that The Defence Ministers are provided with a Quarterly Performance Report, which includes Projects of Concern, Projects and Products of Interest and Performance Summaries for the Top 30 Sustainment Products.44 The stated intent of the Quarterly Performance Report is to provide ministers and senior Defence personnel with: a clear and timely understanding of emerging risks and issues in the delivery of capability to our Australian Defence Force end-users. 3.50To assess Defences public reporting for the sustainment of specialist military equipment, the ANAO considered: 3.51The Public Governance, Performance and Accountability Act 2013 (PGPA Act) aims to improve the line of sight between what was intended and what is delivered. This chapter examines Defences performance framework to support the management and external scrutiny of materiel sustainment for specialist military equipment. However, based on the ANAOs review of a Quarterly Performance Report produced during the audit, its contents are neither complete nor reliable, it takes two months to produce and its contents are sometimes difficult to understand. 179At the time, the British Standards Institutions Publicly Available Specification for the optimal management of physical assets (PAS 55) was the benchmark international standard. The Rizzo Review into naval sustainment raised this problem in the following terms: To avoid being seen to fail personally, there is a danger (especially in the can do, make do environment) that staff will choose to not raise bad news. Develop an Asset Management Strategy for sustainment. 3.32The First Principles Review found no direct measures of productivity in the existing management information systems, though some cost and schedule information is included in MRS and SPMS. Improvements are still being seen in Rate of Effort (ROE) generation, since the implementation of the renegotiated ARH Sustainment contract arrangement. It is now not clear whether Defence will continue with this work. Systems Program Office staff are involved in both acquisition and sustainment. 23Fleet Screenings is a term originally used by Navy. There are four basic financial . For example, the Systems Program Office reviews are not yet complete and Defence has provided no evidence that decisions have been taken on changes to their structure and functioning. With benchmark availability on the verge of being achieved, the focus should now be on efficiency improvements and cost reductions across the sustainment program. Table6: Capability Sustainment Program lists estimates for nine elements of Defences Capability Sustainment Program (Navy Sustainment, Army Sustainment and so on) over the four financial years of the forward estimates period. Defence has engaged industry expertise to guide and help it with the First Principles reforms relating to acquisition and sustainment, including $107million with a single company where the contract for services is not performance-based. %%EOF
The absence of an asset management approach within Defence makes it difficult to piece together a holistic asset management view across the myriad individual policies which focused on discrete processes. From the perspective of the field review, there is some indication that the sustainment models continue to drift apart.202. Decision-makers are empowered and held responsible for delivering on strategies and plans within agreed resourcing. 99Some of those attempts are examined later (paragraph 5.54 forward). In light of the Parliamentary interest in Defence sustainment (see paragraph 1.4 forward) the ANAO has considered, on the basis of the current audits findings, the issue of enhanced scrutiny of sustainment through a process similar to the existing Major Projects Report (MPR).1 The MPR has been prepared annually over the last decade to provide independent assurance of the status of selected Defence major acquisition projects. processes for documenting capability managers requirements around sustainment. Chemical, Biological, Radiological, Nuclear and Explosive Equipment, Personal Field Equipment, Aerial Delivery and Adventurous Training Equipment and Combat Protective Equipment, and Special Forces equipment and needs. Deficiencies in the configuration record indicates potential Configuration variance and will impact the availability of necessary inventory for planned and corrective maintenance tasks resulting in increased risk to achieving Materiel Ready Days (Materiel Availability outcome). Sustainment costs were increasing because of the inappropriate application of DMO policies and procedures, and a lack of business acumen in contracting and engagement with industry. SeeCost Considerations-The Cost Principlesfor additional details. 88Previously, the relevant expenses would have been allocated across several categories, including repair and overhaul, and inventory supplies. Monitor and controls project cost, schedule and scope; Performs analyses and prepares reports in orders to ensure that contracts are within the negotiated and agreed-upon parameters and CASG cost principles guidelines; Timely and accurate project and corporate reporting; Incorporate contractual changes, ensure adequate funding on projects 14For the great majority of Defences military assets, Capability Acquisition and Sustainment Group (CASG) is responsible for sustainment. CASG Cost Principles | Business & Industry | Defence Failure to achieve planning milestones has been identified as a key constraint and has a direct impact upon the ability of Capability Acquisition and Sustainment Group to deliver platforms out of maintenance periods on time. The Future PGCS 2019 Chloe Kempster www.pgcs.org.au/library/2019 2 Defence should also clarify whether the Quarterly Performance Report system reports on sustainment activities across Defence or is limited to the activities of the Capability Acquisition and Sustainment Group. The ANAO found that, 18months after implementation commenced, there had been limited progress. Table10: Capability Sustainment Program corresponds to Table6 in the PBS (see above). The fact that a proposed cost is awarded as requested by an applicant does not indicate a determination of allowability. Defences view is that, once implemented, this initiative will improve Defences cost estimates for major capital equipment projects and will bring Defence practice into line with the approach adopted by capital intensive industries and Defence partner nations. That modelling indicated cost of ownership of between $240million and $360million per year (October2012 prices), or $5.1million to $7.7million per aircraft per year. LAND 121 PH 3B Project Office [Project OverlanderMedium Heavy Capability, Field Vehicles, Modules and Trailers], LAND 121 PH 4 Project Office [Protected Mobility Vehicles (Light)Hawkei], LAND 400 [Combat Reconnaissance Vehicles, Infantry Fighting Vehicles, Manoeuvre Support Vehicles, and an Integrated Training System. 171Defence, Airborne Early Warning and Control Sustainment Performance Gate Review, 30 July 2015. Reporting: SPOs report to multiple bodies for performance management and technical assurance, and all require different information, formats, and timings; Policy: implementing changes to policy and process from multiple sources with limited guidance or support; and. 187Defence Portfolio Budget Statements 201516, Table 94: Top 30 Sustainment Products by End of Financial Year Outcome 201516, p. 190, available from
Who Is The Man Behind Rocky The Nuggets Mascot,
Nz Herald Death Notices Last 3 Days,
San Jose Del Monte Bulacan Barangays,
Fdot District 6 Staff Directory,
Alexandra Cooper Sister Kathryn,
Articles C