Warren King hits back at Ai Group Defence Council

CEO DMO, Mr Warren King, has stated that the Defence Materiel Organisation (DMO) has made significant progress on budget and project performance since its formation in 2000 and in particular since the Kinnaird Review and transition to a prescribed agency in 2005.

Mr King’s comments come in response to a recent media article which outlined parts of the Ai Group Defence Council submission to the commission of audit.

Mr King said a project benchmarking study by Independent Project Analysis Inc. in 2012 found the following:

o     The DMO’s Schedule performance is now comparable with international commercial industry and better than Australian industry.
o    Few DMO projects overrun budget whereas cost overruns of more than 25% are common in equivalent commercial projects.
o    Even the DMO's off-the-shelf projects were found to be more difficult than the average industrial project.
o    The DMO's formation as a centralised project agency is consistent with international best practice.

Mr King acknowledges that there is still a lot of work to do and is very supportive of the Government’s foreshadowed review of Defence and the DMO.

Mr King said the assertion made by the Ai Group  that ”there are more than 7000 people employed in the DMO, up from around 2500 over a decade ago” is completely false.

In fact, following staff reductions over the past 18 months, the DMO’s current workforce of approximately 6,500 is equivalent to when the organisation became a prescribed agency almost a decade ago.

Furthermore, the Ai Group Defence council says “the scale and number of acquisitions has not changed significantly during that period”.

Mr King again refuted this point saying it was simply not true.

The DMO’s budget has increased by 17% in real terms since 2003-04 to accommodate a larger workload.

Military equipment also increases in complexity year on year.  Increased integration between weapon systems over the last decade has increasing acquisition complexity.  

Other studies also suggest that this increasing complexity requires higher staff levels and/or higher levels of training as well.
 
In conclusion, Mr King said the DMO has improved cost and capability delivery performance in this increasingly complex environment, but there is still room for improvement and the DMO will support and contribute to Government’s initiated review.

DMO Comms