An independent projects management office offering “laser-like” focus to troubled Defence projects will be established after 28 major projects were revealed to be running a combined $6.5bn over budget and a cumulative 97 years behind schedule.
The federal government will also introduce new monthly reporting requirements for projects deemed Projects of Concern and Projects of Interest, as well as “early warning” criteria aimed at reducing cost blowouts and persistent delays.
Defence minister Richard Marles said the proposed changes would help ensure the government becomes “more responsible” managing major projects, as both geopolitical and economic pressures mount.
“Given the current strategic circumstances we face, we need to be better focused on the quality of spending within defence to ensure we are providing our ADF personnel with the best capability,” he said.
The government has identified a selection of projects with approved budgets totalling more than $69 billion – which exclude the nuclear-power submarines planned under the AUKUS security pact – that are facing “significant schedule delays and budget variations”.
It said at least 28 projects are a combined 97 years behind schedule, including the $44 billion Hunter Class frigates program and the $970 million battlefield command system and several other Defence satellite communications projects worth $906 million.
At least 18 projects are also running over budget, with “at least $6.5 billion of variations from the approved budgets identified,” according to data from the Australian National Audit Office and advice from Defence.
Speaking on Monday, Mr Marles sought to blame the former government for what he described as a “complete mess”, and said a culture of “better management” was needed from the new government.
“We need much better hands-on management from government. This is not the fault of the Department of Defence and Defence industry, this is a failure of the former government to actively manage these projects,” he told ABC Radio National.
Defence Industry minister Pat Conroy said the new independent projects and portfolio management office, which will work closely with portfolio ministers, will “provide a laser-like focus on fixing projects that are running into difficulties”.
Other new processes include Defence providing monthly reports on Projects of Concern and Projects of Interest to Defence ministers, establishing “early warning” criteria to for placing projects on the lists, providing “troubled” projects with extra resources, and ministerial summits.
“What we’re going to do is actively manage these projects. Get back to basics. We’re going to be much more concerned with the delivery, and that means were going to do things like has monthly reports on each of these projects,” Mr Marles said.
The reforms come as the government continues to take a fine tooth comb through Defence’s integrated investment plan as part of the Defence Strategic Review to ensure the project pipeline remains fit-for-purpose.
Mr Marles said the government plans to get the projects “back on track as soon as possible”. Mr Conroy said that while it is “very hard to regain schedule once it’s lost”, the first step is stopping “more schedule drift” and working with the department to maintain current schedules.
Earlier this year, the former government scrapped a $1.3 billion Defence drones program to help pay for a $9.9 billion, 10-year investment into the Australian Signals Directorate through a program called REDSPICE.
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Cobb’s Paradox asks; “We know why projects fail; we know how to prevent their failure—so why do they still fail?”. They fail over 80% of the time to deliver the specified end state on time with approved resources. The answer is staring you in the face. Dump the triple constraints. Use “agile”. Don’t specify the end state – use the Greek alphabet. Don’t specify the time frame – iterate forever. Don’t limit resources – flush some more next budget cycle. Change the project name if needed. Take questions at Senate Estimates on notice (forever). Are you thinking another PMO won’t fix this? “I don’t think, I know.” – with respect to the President of France.