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Program 1.1 Management of Capability Acquisition


Program 1.1 Management of Capability Acquisition


Through Program 1.1, the DMO acquires and delivers to Defence, in a transparent and accountable manner, specialist military equipment to enable the delivery of military capability to the Government. Equipment is purchased by DMO acquisition projects in accordance with materiel acquisition agreements between Defence and the DMO. The agreements define what is to be delivered, how much it is to cost and when it is to be delivered. The DMO currently has 222 active major and minor projects.

Program 1.1 accounted for around 42 per cent of the DMO’s expenses in 2013–14. This generated around $3.8 billion of military assets for Defence; non-capitalised project expenses were about $0.4 billion.

Table 6.3: Program 1.1 deliverables for top 30 major projects

Former projects of concern

Table W6.8 Former projects of concern as at 30 June 2014

Expenditure by projects

Table W6.9: Top 30 major projects by expenditure

Table W6.10: Top 30 major projects by variation

Table W6.11: Current status of previously reported Top 30 major projects (projects reported in the last five financial years)

Closed major materiel acquisition agreements

In 2013–14, 19 major projects were successfully closed. All materiel acquisition agreements’ deliverables were delivered and accepted with no outstanding issues and consequently closed. The DMO continues to work closely with Capability Development Group and other stakeholders to ensure that all closures comply with and maintain the integrity of Government approvals.

Table W6.12: Closed major projects in 2013–14[1]

New major projects

During 2013–14, 15 major projects were transferred to the DMO following Government approval. The DMO classifies a project as having been transferred on the signing of materiel acquisition agreement between DMO and Defence.

Table W6.13: New major projects transferred to the DMO in 2013–14[1]

Top 10 minor projects

Minor projects are undertaken to address emerging requirements – often to enhance or replace existing capability. They are funded from outside the Defence Capability Plan and are usually of relatively low value. There are currently about 87 such projects.

Table W6.14: Top 10 minor projects

Closed minor materiel acquisition agreements

In 2013–14, 36 minor projects were successfully closed. The total reduction of project approval at closure represented 31 per cent of the project approval value for the projects.

Table W6.15: Closed minor acquisition agreements

New minor projects

During 2013–14, 7 minor projects were transferred to the DMO following Government approval. The DMO classifies a project as having been transferred on the signing of major acquisition agreements between DMO and Defence.

Table W6.16: New minor projects transferred to the DMO in 2013–14

Program 1.1 key performance indicators

The key performance indicators for Program 1.1 are to deliver major and minor capital equipment within the agreed parameters for schedule, scope and budget. The detail varies with each project and is specified in the materiel acquisition agreements.

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