FED: Govt moves to make DMO more 'business-like': Combet

AAP General News (Australia)
02-17-2009
FED: Govt moves to make DMO more 'business-like': Combet

By Julian Drape

CANBERRA, Feb 17 AAP - The federal government will appoint a commercial director to
the organisation that purchases the nation's military hardware.

The government wants the Defence Materiel Organisation (DMO) to be run more like a
business and less like a bureaucracy.

Parliamentary secretary for defence procurement, Greg Combet, made the announcement
in Canberra during the 6th annual Australian Defence Magazine conference.

The move follows the release of the Mortimer review into the DMO last September, which
recommended the organisation be run more like a private business with a commercial director
to "manage strategic commercial issues and acquisition strategy".

"The DMO is one of the most significant contracting organisations in this country,
and it must, given its command of such a significant amount of taxpayers' money, function
in a manner more consistent with modern financial and commercial discipline," Mr Combet
said on Tuesday.

"There's no ifs or buts about it."

Some 80 per cent of Australia's war fighting equipment will need to be replaced over
the next decade, at a cost of around $110 billion.

Mr Combet told industry heads attending the conference there wouldn't be a shortage
of work over the next 10 years.

"You should be salivating," he joked.

The government's draft response to the Mortimer review will be released publicly in
late March or early April, Mr Combet said.

He also said concerns raised by industry about projects being delayed while the government's
defence white paper was completed were unfounded.

The DMO had investigated the matter, Mr Combet said.

"As I suspected only a very small number of projects - three first-pass approvals and
one second-pass decision - have in fact been delayed due to white paper considerations.

"It is not a significant impact."

The parliamentary secretary also revealed a unit established within the DMO to investigate
certain projects would become a permanent fixture of the organisation.

"It's given government a far greater capacity to ensure that with some of these difficult
projects there's a greater potential for oversight of the executive of government," Mr
Combet said.

And as for the most concerning of those projects - the $3.45 billion Wedgetail project
- the government stressed recent media reports were "incorrect".

The RAAF's new early-warning aircraft is behind schedule and further delays are expected.

"(But) Boeing has not sought, nor the commonwealth agreed to, any change in the contracts
terms in advance of the operational evaluation program and independent review," Mr Combet
said.

AAP jcd/kms/tnf

KEYWORD: DEFENCE

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