Defence Materiel Organisation
|Type||Australian Government Prescribed Agency|
Prescribed Agency in 2005
|Key people||Warren King, CEO
Harry Dunstall, Deputy CEO & GM Commercial
Shireane McKinnie, GM Joint Systems & Air, David Gould, GM Submarines, (acting) GM Land &Maritime
|Products||Military Equipment Acquisition and Sustainment|
|Operating income||A$9 billion(2012-13)|
|Parent||Australian Department of Defence|
The Defence Materiel Organisation ('DMO') is the Australian Government agency responsible for the acquisition, through-life support and disposal of equipment for the Australian Defence Organisation. The DMO is part of the Australian Department of Defence, and manages the acquisition and support of a diverse range of materiel (equipment), including aircraft, ships, vehicles, electronic systems, uniforms and rations. The DMO budget (2012–13) was A$9 billion, shared between purchasing new equipment and sustainment and through-life support (maintenance, upgrades, fuels, explosive ordnance and spares). The DMO manages some 180 major projects (each with a budget over $20m) and more than 75 minor projects. It employs more than 7,000 military, civilian and contracted staff in more than 70 locations around Australia and internationally.
DMO was formed in 2000 when the then Defence Acquisition Organisation merged with Support Command Australia, bringing together the Department of Defence's capital acquisition and logistics organisations into a single entity. The DMO was given responsibility for purchasing, through-life support and disposal of military equipment assets, other than facilities and administrative assets.
In July 2005, DMO became a Prescribed Agency under Australian Financial Management and Accountability legislation, meaning that although it remains a part of the Department of Defence, it is separately accountable to the Minister of Defence for its budget and performance.
DMO's stated vision is to become the leading program management and engineering services organisation in Australia. Its goal is to deliver projects and sustainment on time, on budget and to the required capability, safety and quality.
In May 2008, the Australian Government commissioned a review of Defence procurement, which included in its terms of reference a report on the progress of implementing reforms from the last such review - the 2003 Kinnaird Review.
The review was conducted by David Mortimer, who presented his findings in September 2008. Mortimer identified five principal areas of concern. There was/were:
- inadequate project management resources in the Capability Development Group,
- inefficiencies in the processes leading to government approvals for new projects,
- personnel and skill shortages in the DMO,
- delays due to industry capacity and capability, and
- difficulties in the introduction of equipment into full service.
In all, Mortimer made 46 recommendations, with 42 accepted in full by the Government and three accepted in part. One recommendation was not accepted - that the DMO should be separated from the Department of Defence and become an executive agency. This recommendation, which was also made in the 2003 Kinnaird Review, was not implemented by the Howard government. As an executive agency, the DMO would receive its own acquisition funding stream as a government appropriation, and would be headed by a chief executive with "significant private sector and commercial experience". Mortimer also recommended that a General Manager Commercial position be created to implement a business-like focus throughout the organisation.
Ministerial statements in 2010 and 2011 suggested that the Government believed new procurement reforms were needed. On 26 November 2010, the Minister for Defence, Stephen Smith, in adding project AIR 5418 Joint Air to Surface Stand-off Missile (JASSM) to the 'Projects of Concern' list, stated that the listing was because of "our poor management, our failure to keep government properly and fully informed about the project and its difficulties." Minister Smith also said that he had asked Defence to review the effectiveness of its management of major projects. On 6 May 2011 Minister Smith announced further Defence procurement reforms aimed at improving project management, minimising risk at project start and identifying problems early and on 29 June 2011, Minister Smith announced reforms to the management of 'Projects of Concern' including the development of formal remediation plans for designated projects.
Dr Stephen Gumley was the DMO's Chief Executive Officer from February 2004 until his retirement was announced by the Minister for Defence, Stephen Smith, on 7 July 2011. Gumley had headed an executive team of around 20 senior managers. According to the DMO website, the executive team has considerable private and public sector experience, as well as extensive military domain knowledge.
Under Gumley, the executive team consisted of:
- the CEO and Deputy CEO,
- four general managers, (SES band 3)
- Systems; Programs; Corporate; Commercial.
- ten division heads, (SES Band 2 or Military two-star rank)
- Systems Divisions: Maritime Systems, Land Systems, Aerospace Systems; Electronic and Weapon Systems; Helicopter Systems; Explosive Ordnance.
- Programs, Corporate and Commercial Divisions: Future Submarine Program; Industry; Smart Sustainment; Human Resources and Corporate Services.
- three program managers, (SES Band 2 or Military two-star rank)
- Airborne Early Warning and Control (AEW&C); New Air Combat Capability (NACC); Air Warfare Destroyer (AWD).
- a CFO, and a Special Counsel. (SES Band 2)
In addition, several major capital acquisition programs were led by senior military or civilian managers. In January 2009 the DSTO (Deputy Chief Defence Scientist level) position of Chief Systems Integration Officer was added to the management team.
In March 2009, the Corporate General Manager of the DMO, Jane Wolfe, was dismissed for unsatisfactory performance. 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. Wolfe was reinstated in April 2010 following a legal challenge against procedural aspects of her dismissal in the Federal Court of Australia. The case is said to have "significant implications" for the Senior Executive Service of the Australian Public Service, where legal challenges to performance decisions have been rare.
On 13 February 2012, Warren King (former Deputy CEO) was appointed CEO.
The executive team now consists of:
- the CEO and Deputy CEO (also General Manager Commercial),
- a further three general managers, (SES band 3)
- Joint Systems and Air; Land and Maritime; Submarines
- eleven division heads, (SES Band 2 or Military two-star rank)
- Maritime Systems, Land Systems, Aerospace Systems; Electronic Systems; Helicopter Systems; Explosive Ordnance, DMO Reform, Business Operations, Special Counsel; Commercial Industry Programs; Commercial Enabling Services.
- program managers, (SES Band 2 or Military two-star rank)
- Programs: Collins and Wedgetail; New Air Combat Capability (NACC); Future Submarines, Air Warfare Destroyer (AWD).
- a CFO. (SES Band 2) and a Chief Audit Executive (SES Band 1)
In addition, several major capital acquisition programs are led by senior military or civilian managers.
- "Inside DMO". Defence Materiel Organisation. Retrieved 10 April 2010.
- "About DMO". Defence Materiel Organisation. Retrieved 10 April 2010.
- "DMO appoints industry supremo to drive reform". Australian Financial Review. 5 March 2010. Retrieved 8 November 2010.
- "Going to the Next Level - The Report of the Defence Procurement and Sustainment Review". On Target. October 2008.
- "Address to the Department of Defence Senior Leadership Group" (Press release). Australian Government, Department of Defence. 26 November 2010. Retrieved 10 July 2011.
- "Strategic Reform Program" (Press release). Australian Government, Department of Defence. 6 May 2011. Retrieved 10 July 2011.
- "Speech" (Press release). Australian Government, Department of Defence. 29 June 2011. Retrieved 10 July 2011.
- CEO of DMO retires, Press release, 7 July 2011
- "Leaders in DMO". Defence Materiel Organisation. Retrieved 10 April 2010.
- DMO Leadership Chart, December 2009. Retrieved on 25 January 2010.[dead link]
- Mannheim, Markus (8 April 2009). "Top Woman in Defence Sacked". The Canberra Times. Retrieved 9 April 2009.
- Davis, Mark (25 February 2010). "Defence executive challenges sacking". The Sydney Morning Herald. Retrieved 9 April 2010.
- Towell, Noel (9 April 2010). "Defence exec wins her job back". The Canberra Times. Retrieved 9 April 2010.
- Davis, Mark (9 April 2010). "Public servant's sacking reversed". The Sydney Morning Herald. Retrieved 9 April 2010.
- DMO Leadership Chart Retrieved March 2013
- Ergas, Henry. 'Some Economic Aspects of the Weapons Systems Acquisition Process' (2003); available from CRA International