DMO to go as government accepts first principles reveiw

The federal government has endorsed the First Principles Review's recommendation to abolish the Defence Materiel Organisation as a standalone agency under the review headed by former Rio Tinto Australia managing director David Peever. The review is the most thorough in four decades and calls for a restructure of the department to cut waste and simplify processes.

The Defence Materiel Organisation, which oversees $12 billion of spending a year, will be absorbed into the department and become the capability acquisition and sustainment group, although the recommendation that DSTO follow the same path appears to have been the only one of the report's 76 recommendations not agreed to at this point in time by government.

The Review found that, although Defence has a proven record of delivering in the field, it suffers from a proliferation of structures, processes and systems with unclear accountabilities that cause waste, delayed decisions, duplication and flawed execution

Apart from Mr Peever, the high-powered review team, comprised of former Defence Minister Professor Robert Hill, Professor Peter Lay, Lindsay Tanner and former BAE Systems head Jim McDowell. The government and department will spend the next three months planning how to make the changes and the reforms would be finished within two years.