casg cost principles
Dodane 10 maja 20232The MPR Guidelines, which are endorsed by the JCPAA, provide that data of a classified nature is to be prepared in such a way as to allow for unclassified publication (see ANAO Report No.40 201617, 201516 Major Projects Report, paragraph 1.16, p. 463). Figures for 201516 are based on Defence advice with one-third of Capability Acquisition and Sustainment Group staff costs allocated to acquisition and two-thirds to sustainment. 107The Pappas Review examined a sample of equipment fleets and interviewed senior Defence personnel. Improvements are still being seen in Rate of Effort (ROE) generation, since the implementation of the renegotiated ARH Sustainment contract arrangement. Reflecting the First Principles Review theme of better engagement with industry, Defence has engaged a USA-based engineering company, Bechtel, to help with implementing the Reviews recommendations. The Canberra Times reported that its 'senior public service sources' believe she is the highest-ranking Australian Commonwealth public servant to ever have been dismissed for underperformance. Accountability and Transparency in procurement Nevertheless, an internal review conducted by Defence and research conducted for Defence following the 2015 First Principles Review have identified a range of operational problems that detract from the efficient and effective sustainment of Defence capability, including: adherence to procurement principles; staff capabilities; duplication of effort and transparency of internal costs. The report assessed the maturity level of asset management policy and supporting guidance documentation only. Second, the material to be produced for scrutiny of sustainment performance would need to reflect a One Defence (that is, whole of portfolio) view. However, even with higher rates of availability, improved fleet serviceability and Repairable Item (RI) turnaround time, flying hours are still lower than expected. Defence had not established a strong case for value for money for the continual renewals of supplier contracts. 442, Review of the 201213 Defence Materiel Organisation Major Projects Report. Sustainment costs can exceed those of the original procurement and the challenges can be more complex.26. There is no record of whether the intended savings to sustainment costs were achieved from DMOs 2008 initiative to identify efficiencies. 126This mirrors similar changes underway in the counterpart UK organisation, Defence Equipment and Support. 12For example, the Kinnaird and Mortimer reviews recommended an independent entity. The term includes small and large businesses and is used interchangeably with "for-profit organization. a Quarterly Performance Report to the Defence Minister produced during the audit (April June2016) and, in contrast. This was the case with the earlier Smart Sustainment reforms. Establishing the validity of the logistic support framework is a secondary consideration (p. 14). The following paragraphs provide an overview of the contents of the 201516 performance documents. 4.6The Strategic Reform Program comprised 15 separate streams of reform, several of which were intended to reduce costs.106 Overall, Defence expected the program to yield $20.6billion, to be reallocated within Defence over the following decade, with Smart Sustainment contributing $5.5billion of that figure.107 This would make sustainment savings the largest single source of funds under the Strategic Reform Program. 4.18By June2015, Defence was claiming approximately $2billion in savings from the Smart Sustainment Program since its inception in 2009. Current proposals appear to be limited to an independent health check on progress.184 On the face of it, the scope of the health check is narrow, focused on closing recommendations and assessing progress. 15. The 2012 Coles Review, by subsequent reports, has been both successful and insightful.119. 5.34Performance-based contracting rose to prominence in the USA for its military in the late 1990s. ~rEy0Eq2I;+t4NY1. This recommendation was not included in the summary of First Principles Review recommendations at the front of the report of the review, whereas the recommendations set out in the preceding and subsequent paragraphs of the report are included in that summary (recommendations 2.12 and 2.13 respectively). In 2011, a review of the Smart Sustainment program by consultants engaged by Defence identified that there were no records to support how these funds were spent or what benefits had been realised. 5.23As discussed in paragraph 3.47 of this report, Systems Program Offices have had between three thousand and four thousand staff over the last decade. Box 3: Systemic issues identified by Defence in the reform of Systems Program Officesa. Army refer to the reviews as Sustainment Financial Screens, and Air Force call their reviews Sustainment Assessment Reviews. The Committee considers sustainment expenditure to be an area requiring further parliamentary scrutiny on the adequacy and performance of Defence involving billions of dollars in the future.10. Although this largely represents the absorption and re-badging of the former DMO, other subsidiary recommendations are directed at substantial restructuring and reformulating the business practices in this part of Defence. ], P3 Orion, P8 Poseidon, Herron UAV, and Aeronautical Life Support Equipment, Ground support equipment, aircraft common spares, aerospace support and test equipment, and technical data and publications, Air Mobility & Tanker Program Office (AMTPO), Directorate Aerospace Simulators & Special Aircraft (DASSPA), Tiger (ARH), Taipan (MRH-90), Blackhawk and Kiowa helicopters, Cargo Helicopter & Unmanned Surveillance Project Office, Chinook and Unmanned Aerial Vehicle aircraft, Squirrel and Seahawk helicopters and aerial targets, Helicopter Aircrew Training System Project Office, Multirole Helicopter [MRH-90] Project Office, Joint domain (16 Systems Program Offices), Wide area and space surveillance capability, Maritime strategic communications capability, Joint C4I [communications, command, control, computers and intelligence], Joint communications, command, control, computers and intelligence capability, Land C3 [communications, command and control], Land communications, command and control capability, Maritime command, control, and communications capability, Joint & Air Intelligence, Surveillance, Reconnaissance and Electronic Warfare, Joint & air intelligence surveillance reconnaissance and electronic warfare capability, Land Intelligence Surveillance, Reconnaissance and Electronic Warfare, Land intelligence surveillance reconnaissance and electronic warfare capability, Maritime Intelligence, Surveillance, Reconnaissance & Electronic Warfare, Maritime intelligence surveillance reconnaissance and electronic warfare capability. The availability of appropriately skilled, qualified and authorised staff (Navy and Civilian) to fill positions in the Systems Program Office and Capability Manager Representative organisations is a key contributor to all three of the Materiel Sustainment Agreement outcomes and a key constraint to long term Materiel Confidence. Defence has also been developing its approach to asset management over many years, having obtained substantial advice from internal and external sources to adopt a Defence-wide asset management strategy to underpin a sustainment business mode for specialist military equipment. 3.7A joint review of Navys performance framework, completed in March2016 by Navy and Capability Acquisition and Sustainment Group, concluded that there was universal acceptance that the framework provides a sound basis for the assessment of sustainment outcomes.38 However, the review decided to remove one of Navys core key performance indicators (cost per materiel-ready day achieved) on the basis that the measure required the Systems Program Office to enter four separate data elements and stakeholder compliance was reportedly low. Defence has achieved key outcomes expected from the Smart Sustainment reforms and has progressed its implementation of the reforms to sustainment flowing from the First Principles Review. 47Defence, First Principles Review, p. 17. 29. [12] Gumley had headed an executive team of around 20 senior managers. 29Defence, Operational Concept Document for DMO Sustainment Reporting System (Version A, December 2004, Sponsored by Director General Standardisation). Smart Sustainment had a ten-year savings target of $5.5billion. The Systems Program Office Director reviews the data and comments for each measure and provides comments for a set of key performance indicators and an additional set of key health indicators.35 Further comments can be added up the hierarchy to the relevant Capability Acquisition and Sustainment Group division head. Define and endorse an Asset Management Plan. 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. This risks encouraging insourcing in preference to outsourcing even where the total real cost to the Commonwealth of the former is greater.82 Defence has noted this internally (February2017): Any reduction of SPO [full-time equivalent staff], without a commensurate reduction of activity, will result in work being outsourced to industry and therefore increase the cost to the [Capability Manager]. 4.20In October2015, Defences First Principles Review Implementation Team decided that work on Smart Sustainment, along with other reform activities underway within Capability Acquisition and Sustainment Group at that time, would cease and the relevant elements were to be incorporated into work on the new Capability Life Cycle. 1.1Defence materiel sustainment is about the maintenance and support of Defences fleets of specialist military equipment. Deployment of the PPR was, at that point (September2016), on pause pending further review of the prototype arrangements. 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. In examining why contracting out work to the private sector had not worked well during the Reagan administration, these studies find that government has often not proved to be an intelligent consumer of the goods and services it has purchased. 97The Pappas Review (2008, p. 30), in discussing the long-run cost of Defence, estimated the real growth rate of maintaining todays capability for military equipment (capital and sustainment) at 3.5 per cent. 167Deputy Secretary, Capability Acquisition and Sustainment Group, Defence, CASG Bulletin, Issue 4, 2015. SPOs prevented from engaging industry using optimised outcome-based performance contracts. According to that consultancy, most savings were expected to come from sustainment and support functions. 3.62In summary, the ANAOs review of public reporting on sustainment activity indicates that: 3.63Defence has not published program level estimate data on a consistent basis over time, and no time series analysis is published by Defence to assist with external scrutiny of sustainment expenditure. SPO overhead has increased through a number of avenues: i. 3.26Moreover, there is an opportunity for Defence to extend the use of its Sustainment Gate Review program to have those reviews consider the quality of the information provided in the most recent Quarterly Performance Report for the asset under review, to help quality assure the accuracy, clarity and completeness of that information. These cost principles provide a framework within which items of direct and indirect cost can be incorporated in a cost-reimbursement contract or subcontract. Some terms are used in an unusual way, for example, expenditure of more funds than had been budgeted is referred to as an overachievement. 211Dr Andrew Davies, Director of Research, Australian Strategic Policy Institute. Foreword Introduction 2. Such visibility would enhance Defences ability to benchmark its sustainment performance against allied countries with similar equipment. 159Defence, First Principles Review Implementation Committee, Outcomes, 11 February 2016. An output measure, which directly contributes to the Material Availability and Materiel Confidence outcome. Decision-makers are empowered and held responsible for delivering on strategies and plans within agreed resourcing. A performance measure under this Purpose is Military capability is sustained consistent with Government requirements. MRS and, to an increasing extent, SPMS, are now used to populate a Quarterly Performance Report on both acquisition and sustainment (see paragraph 3.11 forward). Defence is not easily able to identify the effort, in terms of staff numbers, expended on each. consolidation and review of Systems Program Offices; any further development of Defences approach to asset management. REVISED DECEMBER2022. Defence doing only for itself what no one else can do more effectively and efficiently. Reviews of Defence over the last two decades have identified many opportunities for improvement in Defence sustainment practice. The review recommended that the Defence Materiel Organisation should be disbanded and the transfer of its core responsibilities in relation to capability delivery to a new Capability Acquisition and Sustainment Group,[1] which took effect from 1 July 2015.[10]. Defence was able to provide the ANAO with copies of a suite of standard letters of assurance from managers throughout DMO, each stating that, to the best of their knowledge, cost reductions of various values had been implemented for the respective financial year. 0000002145 00000 n
In early 2018, CASG, the Defence group that acquires and sustains military capability, established a panel through which the overwhelming majority of contracted and consulting services to Defence are delivered. It is now planning to implement a new model, which seeks to capture the full cost of ownership throughout the life of an asset, with implementation planned for completion in July2018. <<964faa8c6ebb704a921f34cb193ed03f>]>>
Parliamentary committees have frequently stated an interest in Defences reporting of its sustainment performance and, in particular, obtaining greater insight into that performance. They are mandatory for all procurements valued at greater than two million Australian dollars (AUD$2m), and guidance for all others, unless exemptions apply. Defence comprises the Department of Defence and the Australian Defence Force. Miss Chloe Kempster A/Director of Project Controls - Program Management Function Capability Acquisition and Sustainment Group (CASG) PGCS August 2019 Introduction What we will cover today: 1. Rizzos Recommendation 1 was that Navy and DMO should jointly establish practical methodologies for integrated through life asset and sustainment management (p. 38). That review found shortcomings in the application of procurement principles, which exposed Defence to risks. External Maintenance Period Demand Fill Rate. 130139, available from
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