|
| Last
Updated: Sun Aug 29 16:43:38 UTC 2010
|
The
Decline in the Management of Defence and Defence Capability
Development,
Acquisition, Preparedness, and Sustainment
|
|
|
|
|
Executive Summary
The
structural failures seen currently within Australia’s Defence
bureaucracy, including
those evident in the capability acquisition organisation, go back to
the Tange
days and the unfettered power given the civilian Defence Department
bureaucracy
to ‘reform’ the Services and the higher defence machinery as it wished. The penultimate outcome of that reorganisation
has simply been to maximise bureaucratic power and then to ‘keep the
Services
in their place’.
Since
then, Governments of both persuasions as well as Parliaments have stood
aside
and willingly ignored the continued abuse of bureaucratic power,
seemingly uncertain
as to how to respond, or afraid to make a move.
A
review of the various submissions made to Defence Reform Reviews,
Parliamentary
Committees and successive Defence Ministers, covering the full gamut of
Defence
Matters, shows this to be the case.
The
result has been to erode the professional development and management of
Australia’s Military Services, to place Australia’s Defence Industry,
particularly the Aerospace Industry, in jeopardy, and to impact
adversely the
National security.
The
problems that Defence/DMO have been allowed to create and perpetuate
over time will
now make Australia largely irrelevant, both on the regional and
international
stages, for the next three or more decades, since it will be:
- unable to
muster or project any significant and demonstrable deterrent military
power;
- unable to
contribute as a leading nation to regional security arrangements;
- unable to pull
its full weight in concert with international forces or in support of
bi-lateral security treaties and arrangements;
- made wholly
dependent upon foreign companies for the availability and
sustainability of its
major military capabilities; and
- lack any real measure of self-reliance.
If this situation is to be
brought under control and reversed, then:
- the higher Defence
machinery has to be reviewed and modified so that military matters come
again under
skilled and professional military officers;
- the Services
have to be reorganised to enable them to exercise command and control
over
those functions critical to their responsibilities for the
specification, acquisition,
operation and support of their force capabilities.
- the Services
must also be retrained to regain the skills and competencies they need
to
achieve professional mastery of the capabilities they operate and
support; and
- capability development, sustainment and
acquisition must
become the primary drivers for all defence planning.
The focus on financial management and
outsourcing,
invariably to the detriment of these primary drivers, has to be changed.
In
particular, DMO must be reorganised to replace the current
‘generalist’, pseudo-business-like
management processes that are at the centre of all current, past, and
potential
capability analysis, selection, acquisition, and support failures. This
should
be done by drawing upon the skills and competencies of carefully-selected
Service officers (serving and retired), Defence Industry, and DMO. This
task is
not one that will respond to outsourcing to perceived civilian
management
‘experts’ who have no background of experience in military matters,
military system
technologies, or Service requirements.
There
is also an urgent need to stop the current practice of simply adding
more
layers of review and bureaucratic process whenever ‘reform’ is
attempted. There must be a return to first
principles to get the organisational structure and accountabilities
correct, and then re-introduce sound policies, systems and procedures
before
any improvement in the management of Australia’s defence capabilities
can be
expected.
Above
all (and most importantly), the vitality of this ‘first principles’
approach and
the resulting reform processes must, as control theory dictates,
include a ‘negative
feed back loop’ to keep things in check and on track.
This
‘feed back loop’ should be integrated into this approach, as well as
the resulting
processes and the activities of those who are to implement them, but,
from a
governance perspective, must be independent of them.
As
with all such ‘feed back loops’, both those providing the function and
the
function itself should not have or be seen to have an executive role or
power
over the Executive Level of Governance that undertakes and implements
this
approach and the resulting reform processes, in this case the
Department. Their role should be a
reporting one,
under the authority of and to the Directing Level of Governance, which
in this
case is the Minister of Defence, as well as to the Oversight Level of
Governance, in this case the Parliament.
The
core objective is to embed a self-sustaining and effective system of
management
and good governance.
Valuable
lessons may be learned from our cousins across the Tasman who have
re-organised
their Defence Organisation along the lines proposed, and are now
reaping the
benefits. Any criticism of New Zealand’s overarching strategic policies
as an
estoppel to studying how they have re-organised to re-skill and
re-master their
military would simply be a direct reflection of the very things that
ail
Australia’s Department of Defence today.
A
similar reflection may be seen in the manner in which senior Defence
officials,
in 2005, treated Australia’s then most senior General Officer, with
current
field command experience, upon his return from the highly successful
execution
of his international command duties in Iraq.
Finally,
it is important to recognise that the reasons behind the continued
decline in
the management of Australia’s military capabilities may also be seen in
most,
if not all, Western nations, especially in the UK and USA; the latter
now
facing a breakdown in the management of its defence capabilities that
is
driving a wedge between Congress and the Executive.
What is happening in the US is of critical
importance to
Australia for two main reasons:
- Firstly, it
highlights the inevitability of what will happen when a Defense
Department
considers that it is no longer subject to legislative (Congressional)
control
and direction. That is, it has been allowed to become a law unto
itself, due to
a lack of good governance oversight.
- Secondly, it
warns of the emergence of a US which, if it
accepts decisions
taken by its Department of Defense without it having followed proper
process,
will in essence be pursuing a strategy of unilateral disarmament. The
US will,
in effect, be surrendering its traditional air dominance capability. As
a
result, it will be unable to exercise the independence of military and
diplomatic action that it has enjoyed in the past.
Its Army, Navy, Marine, and Air Forces will have
to operate
under the continual threat of a potentially hostile air environment.
The
protection of its own forces, as well as those of its friends and
allies,
especially Japan and Australia, can no longer be guaranteed.
The
future faced by Australia will carry many challenges, both diplomatic
and
military; challenges that can be met with confidence only if government
and
parliament combine to restructure Australia’s Defence organisation,
re-value
the Services, and reimpose proper governance within and over defence
matters.
|
|
|
|
Core Problems with Defence Management in
Australia
The
crisis confronting Western defence organisations is well exemplified by
developments in the US over the past two decades.
“Since 1990, the
GAO (US Government Accountability
Office) has designated DoD’s (Department of Defense’s) management of
major
weapon system acquisitions as a high risk area. Congress
and DoD have continuously explored ways to improve
acquisition outcomes without much to show for their efforts.” (Highlights
of GAO Report – 07 – 310).
Unfortunately,
a very similar situation has been allowed to develop within Australia’s
Department of Defence and its Prescribed Agency, the Defence Materiel
Organisation
(DMO), and for very much the same reasons. More unfortunately, the
situation is
common to most, if not all, Western nations, again for much the same
reasons.
The
cumulative effects of these common failures now impacts directly on the
maintenance of Western, particularly US, military deterrence for the
maintenance of peace, but this dramatic appears to have been be
ignored
in all afflicted nations.
At
the highest level, there has been a deep intrusion of bureaucratic
behaviour into
all areas of military preparedness, operations, and support under the
guise of
promised better responsiveness, efficiency, effectiveness or economy.
In
Australia, control and support of the Services have been vested in a
bureaucracy adopting a ‘pseudo business
process based organisational construct more applicable to large,
complex
civilian organisations, using a shared service provider model’. The
highly
skilled and efficient, effective, responsive and economic Service
policies and
systems that had evolved over many decades have been replaced by this
model,
without any recognition of their inappropriateness for military
purposes, the
different needs of the three Services, or the impacts upon Australia’s
Defence
Industry, its military capabilities, or even national sovereignty.
These
factors are still largely ignored by Defence, Government, and by the
Parliamentary oversight process.
Furthermore,
an overwhelming focus upon ‘Jointery’, and the formation of a Joint HQs
to
manage all Australian military initiatives, has reduced the three
Services to
being simply service (force element) providers for both military and
civil operations.
The fundamental tenets (and core capabilities) of land, sea and air
power have
been downgraded dangerously. The resulting distortion, confusion and
conflict are
now seen clearly in the poor quality of the higher level policy and
decisions
coming from both Defence and the Services over the past decade or more.
In
Australia, the adverse impact of these changes on the professional
military
competencies of the three Services, particularly the two high
technology
Services, as well as the ethos that once characterised them, has been
deep and pervasive[1].
The Services have been
downsized and de-skilled to the extent that Australia’s strategic
planning,
force structure, and capability development, procurement and
sustainment
functions are ill-advised, disjointed and in disarray. This will leave
Australia in an extremely vulnerable position which, if not corrected,
will lead
to sustained military mediocrity and strategic irrelevance over the
next three or
more decades.
|
The Two Prime Causes
The Organisation and Decision Process
Australia’s
current defence organisation can hardly be said to provide more
efficient,
effective, responsive, or economic capabilities than the organisation
that
preceded it. Reviews, reports and inquiries into a wide range of
problem areas
have flowed at regular intervals, but without detectable improvement. Most have resulted only in additional
layers of bureaucracy and added processes, not better management.
The
principle reason why this is so, and will remain so, is that all
reviews,
reports and investigations have been constrained to accept the current
organisation and its reason for being as a fixed and unquestionable
baseline,
whereas the problems arise primarily from the inherent unsuitability of
a
top-heavy, politicised bureaucratic organisation to manage military
matters in
detail and in a competent manner.
Since
Tange[2], Defence, and later DAO/DMO, have been
characterised by a
lack of disclosure, an unhealthy reaction to criticism (real or
perceived), an
inability to accept facts and adapt to changing circumstances, and an
unwillingness to recognise and accept the root cause for its failed
decisions
and their impacts on Australia’s defence capabilities. This is due
primarily to
the inherent and irreconcilable conflict of interest that must
inevitably exist
between vague and changing political/bureaucratic decisions and
pragmatic
military management imperatives.
Many
of the attitudes and behaviours that have been allowed to develop
within
Defence are more characteristic of an oligarchy rather than a
government department
devoted to supporting the Services, Government, and the security of the
Australian people.
Robert Michaels[3],
a
political
sociologist and economist, noted the trend for bureaucracies to evolve
to
become oligarchies. His observation describes well the path that
Defence has
trodden since Tange. This trend, as described by Michaels, if
unchecked, must
inevitably erode good governance; the very same general concern voiced
by Prime
Minister Rudd before his election victory.
General
Sir Michael Rose, former Adjutant-General of the British Army, in
appraising
the effects of the structural changes imposed upon Britain’s Services,
reported
that Britain has witnessed the most catastrophic collapse of its
military ethos
in recent history. It was vital, he said, to retrain and recover; in
particular, the Army needs its own jurisdiction, administration,
discipline,
ethos, and all those things have to be different from civilians and
outside
their meddling[4].
Australia’s Services
need similar changes if the adverse consequences of our Defence
reorganisation
are to be corrected.
One
professional UK military officer, who had to remain anonymous for
obvious
reasons, wrote of the UK MOD (in part):
“I am often asked
why the MOD makes
so many strange decisions and seems to care so little about the welfare
of its
personnel. People are surprised to
read about expensive computer systems that fail to pay members their
proper
salaries – or pay them late. Some are
shocked by the apparent dumping of severely
wounded personnel
from Afghanistan and Iraq into civilian hospital wards, remote from
their
regiments and families, or the massive contracts for systems that are
delivered
late and don’t work properly, or the strange failure to publicise
genuine
successes and minor victories achieved ‘against the odds’ in
Afghanistan and
Iraq.
Most people still
believe that the
MOD is a military organisation. It
is not. It is an organisation
dominated numerically, culturally and structurally by civil servants
and
consultants, many of whom are unsympathetic to its underlying purpose
or even
hostile to the military and its ethos. You
just have to spend a few days at the MOD before you
realise that the
culture is not just non-military, but anti-military.”
More
recently, we have the RAF Chief, Air Chief Marshal Sir Glenn Torpy,
predicting
a controversial takeover of Royal Navy Air Power, which will include
the STOVL
version of the Joint Strike Fighter planned to operate from the Navy’s
two
proposed new aircraft carriers. Increasing
friction has also arisen between the Service
Chiefs as a
result of Army criticising Navy’s planned two new aircraft carriers,
and the
possibility of Army losing its air power to Air Force[5].
The RAF Chief sees the
reason for this takeover of naval air as being:
“Resources and
finance drive you to
rationalisation. The general public demand and deserve value for money
and if
that means that we have to rationalise, that
is what
we have to do. We’ll see further
consolidation; it is an inevitability as we try to make ourselves as
efficient
as possible.” That is, the driving force for the
changes suggested are solely a saving in cost supposedly perceived by
the
general public, not driven by capability requirements or military
effectiveness.
There are at least two
potential disasters lurking in this type of thinking:
- Firstly, the
assumption that consolidation equates to greater efficiency in
providing required
military capabilities is false. Consolidation
should be considered only on a
case-by-case basis and be accepted
only following proper analysis against established capability
requirements and
planning.
- Secondly,
there is a clear conflict between force planning and maintaining
required
capabilities, and the pervasive impacts of a change in force structure
to
achieve unspecified perceived ‘efficiencies’ by ‘consolidation’ purely
through
economic objectives. It is a case
of money alone driving force structure, even if it distorts force both
structure
and service competencies, whereas money should be considered and
managed as only
one of the many resources required to develop and maintain the force
structure
and military capabilities required to meet well-defined current and
future
threats. Nothing has been put forward as to how these changes will be
made,
what their effects will be upon the capabilities and morale of the
Services
involved, or what the direct and indirect costs of the exercise will be.
As
with so many departmental changes, this seems to be another case of
taking a
decision along vague bureaucratic lines, while leaving the Services to
fix or
just live with the multitude of adverse effects.
There
are two main areas where Defence bureaucracies fail consistently to
recognise
critical dependencies of military organisations:
- Firstly, in
not comprehending the need for, or the role and importance of command
and
control.
- Secondly, in
not understanding the importance of high morale built on strong ethics
and
ethos. Morale in all three
Services has been eroded in almost countless ways, but the
cumulative impacts of these wounds have been studiously ignored by both
Government and Defence. The importance of integrity, which
became an
early victim of Defence reforms throughout Western nations, including
Australia, was well expressed by US Marine Corps General Charles C.
Krulak in
2000. His address to the US Joint
Conference on Professional Ethics is included at Annex A.
In summary, the primary cause
for the
decline in
Defence management in Australia lies in the entirely inappropriate
departmental
and service organisations introduced by and since Tange, coupled with
the
adoption of improper and ineffective administrative processes rather
than sound
management structures.
|
The Lack of Critical Skills
The
second major cause underlying Defence management failures is the loss
of
critical specialist military skills and competencies, especially in the
fields
of operational analysis and professional technical expertise, both
within
Defence and each of the three Services, but particularly within the
Navy and
RAAF.
The
loss of skills and competencies across the Services has been aggravated
severely by a consistent failure throughout Defence/DMO to adopt and
follow
proper management process throughout all phases of capability planning,
acquisition, preparedness and support.
As
an example of the extent to which the RAAF has been de-skilled, it
should be
recalled that, before ‘reform’, the Service possessed the following
critical support
skills:
- Managed, and
manned its operational squadrons such that they were able to focus
wholly upon
their operational capabilities and readiness whether at home or deploye
- Managed and
manned four major Maintenance Squadrons that provided direct support
for the
major operating elements – Bomber, Strike/Fighter, Transport, Rotary
Wing
and Maritime.
- Manned and
managed three major Aircraft Depots which focussed on the major
maintenance of
front line aircraft and the diverse technologies inherent in their
systems.
- Manned and
managed No 1 Central Ammunition Depot which controlled all explosives
ordnance,
including guided weapons.
- Carried out
comprehensive Engineering and Maintenance regulatory functions,
particularly in
airworthiness and maintenance efficiency.
- Planned and
managed all major repair and overhaul arisings for aircraft, engines,
repairable items and other technical equipment, at RAAF facilities and
at
contractor facilities, both in Australia and overseas.
- Assessed and,
in conjunction with the Supply Branch, procured and managed the
technical
spares and other equipment needed to support RAAF operational and
maintenance
programmes.
- Planned and
managed the capability enhancement and life extension programmes for
all
aircraft and other systems.
- Planned and
managed the introduction of new capabilities, ensuring that they were
properly
specified and supported fully from the time of their introduction into
service.
- Monitored the
performance of all technical support elements through feed-back loops,
ensuring
that timely corrective management action was taken when needed.
- Manned and
managed the Engineering and Field Training Schools through which
personnel were
trained on the systems that they would support.
The
maintenance squadrons safeguarded the independence of RAAF operations
by providing
the span and depth of skills and capabilities needed to support their
dependent
squadrons, whether operating from home or when deployed.
The aircraft depots, in turn, developed
and maintained the deeper level engineering and maintenance skills
needed to
support both operational units and maintenance squadrons, as well as
build the
knowledge base necessary for planning and managing capability
enhancements and
the selection, specification, and introduction of new capabilities. This system also provided a steady
input of skilled engineers and technicians into Australia’s Defence
Industry.
Though
spent quite differently today, in real dollar terms the Defence Budget
of the
1980s, as a proportion of the Commonwealth Government Budget, is little
different from the dollars spent on Defence today.
|
The Operational Impact
While
this analysis has tended to emphasise general management and
acquisition
aspects, the defence reform and other programs have also resulted in a
marked
decline in the professional mastery of the RAAF’s Air Staff.
Pre-reform, Air
Staff officers gained sound and practical management experience through
a wide
range of command appointments. They also worked with the specialist
supporting
branches, and so understood the critical interdependencies involved in
maintaining
a common, Service-wide aim, whether at Air Force Office, Command, Base,
or Unit
levels.
However,
the ‘gutting’ of the RAAF’s capabilities, together with the current Air
Force
Office and Force Element Group structures, have reduced dramatically
the span
and depth of Air Staff officer professional and managerial expertise. This decay has been evidenced in most,
if not all, air power capability plans and decisions taken over the
past decade
or more.
As
a result of this lack of operational experience, other than in support
of small
Army tasks, lofty dissertations by senior Air Staff officers on air
combat are
painfully limited, both operationally and technically; buoyed by highly
optimistic, asymmetric assessments of operational advantage coupled
with
unrealistic and inflated kill probabilities for their weapons. Far too
much
seems to stem from manufacturer / project office Powerpoint
marketing presentations rather than robust, independent,
professional analyses.
While
the impacts of Defence Reform on the professional mastery of the RAAF’s
Air
Staff are beyond the scope of this paper, they beg a robust and honest
retrospective analysis.
In
the final analysis, the RAAF’s skills base and system of management,
pre-reform,
maintained a very high level of operational preparedness, robustness
and
flexibility, as well as an equally high level of national self-reliance.
Today,
the RAAF’s skills and competency base starts and stops at the lowest
level
– simple force element operation and flight line maintenance. Generalists, both service and civilian,
now take control of all Service and Defence matters, and provide input
to
Defence plans at all levels, from that very low base of skills and
experience.
|
The Causes and
Impacts of Skills Deficiencies
Within the Bureaucracy
At
the highest level, that is, at the Ministerial/Departmental (Secretary)
level,
there has been no recognition of the need for professional military
skills and
competencies; indeed there is an adversity to having any such skills
within the
Department. This is a characteristic common to most government
bureaucracies,
both in Australia and overseas. Subject matter experts are not welcome
at this
level as they complicate bureaucratic/political decisions, and are
often seen
to lack the required vagueness, flexibility and compliance needed to
politically
protect the Department, the Minister, and Government.
As
a result, an unbridgeable gap has developed between policy decisions
and their
implementation, with the first victim being good governance. Within
Defence,
civilian staffs at this level are seen (as opposed to their military
colleagues) as being ‘generally more
readily able to tolerate, and even be comfortable with unclear lines of
command, divided authority, and open-ended guidance or ambiguous
instructions.
They also tend to be willing to offer judgements and opinions on the
basis of
less hard data than their uniformed colleagues, and to accept that
outcomes
can’t always be readily predicted or easily influenced.’ [1].
Such
civilian staffs now take decisions critical to Australia’s defence
capabilities, and recommend to government specific courses of action,
but see
no need or place for any specialist professional military skills or
competencies
in their thinking. They do not understand military matters and are not
interested
in learning them; nor are they willing to account for the consequences
of their
decisions. Decisions, once taken,
are immutable and must be defended to the end so that a charge of
having made a
mistake can not be levied.
In
doing so, decisions soon become obsolete and detached from reality.
The
professional operational and technical expertise necessary to drive
sound force
structure analysis and decisions, as well as support the operational
and technical
analyses central to ensuring sound weapon system specification,
evaluation,
comparative analysis, selection and procurement, is nowhere to be seen,
yet all
critical capability decisions continue to be taken at that level.
While
Defence may state that advice is provided by ‘subject matter experts’
(such as
the Services, CDF, DSTO, and Contractors), the fact remains that these
entities
have also been de-skilled, and made ‘generalists’. As a result, the
bureaucracy
does not have even the minimum knowledge base to understand what is
going on,
be able to formulate the questions they should be asking, especially of
contractors, or comprehend and evaluate the information that they are
given.
With
such a lack of professional military skills and competencies within the
Department/DMO, it is hardly surprising that the advice that has been
given to government
and parliament should prove to be deficient, or that governance of the
Department should be equally difficult and deficient.
The
failure of governance was evidenced recently by Defence Procurement
Secretary
Combet taking upon himself the role of Departmental apologist for a
series of
failed projects at a Defence Industry Conference held in June.
Similarly,
Defence Science and Personnel Minister Snowdon, standing in for the
Minister
for Defence at the same conference, in his keynote address, defended
lax acquisition
performance allegations. Surely their job is to ensure good governance,
not to become
apologists for Departmental failures.
|
Within the Services
The
second area where critical skills and competency sets are now deficient
lies
within the three Services, especially Navy and RAAF, the two Services
most
heavily dependent upon the professional operation and management of
high
technology weapon systems. All
three Services had evolved effective, efficient and economic systems
for the
planning, procurement, operation and support of their weapon systems,
particularly the RAAF which was acknowledged widely as having world
class
operators and world class engineering, maintenance and supply support
managers
and processes.
It
is important here to note the span and depth of the professional skills
and
competencies that the RAAF had developed. Anders
Ericsson, in his studies into the characteristics common to those
who achieve superior performance, identified starting young,
‘deliberate
practice’ (a term he adopted to describe the focussed application of
the mind
to learning) and critical feedback (which relates to having
constructive
feedback that enables a person to develop his capabilities), as central
to
success. In effect, he reinforced
the old-fashioned values of faith in hard work, taking responsibility,
and
stretching oneself. Importantly,
he noted that it takes about ten years of deliberate practice to become
truly
proficient [6]. The role
and importance of focussed learning is confirmed by Norman Doidge,
M.D., in his
studies of the plasticity of the human brain[7].
Against
Ericsson’s research findings, the RAAF of the pre-reform era scored
highly in
all respects. It started people young, some at 15 years of age, it
developed
them well through thorough training and education, and it provided
continuous
feedback, both formal and informal, so that members knew where they
stood and
what was required of them for their further development. It also
acknowledged,
perhaps unconsciously, the ten year
proficiency ‘rule’
seen by Ericsson. In project management, for example, those doing the
logistics
support detail (such as spares assessment, and repairable item and
inventory
management) had about ten years experience. Those involved with
management of
the major elements of a project had about twenty years experience in
management
as well as a sound understanding of the technology involved, while
those at the
higher planning and management level had about thirty years of
wide-ranging
management experience, as well as operational or technological
expertise.
However, these skills and
the systems that supported them were simply swept aside as a result of:
- the imposition
of the DER/DRP/CSP Programs, which down-sized and de-skilled the
Services at
all levels, with little thought for the adverse effects that must
follow;
- the introduction of a General List, against
which
officers of and above the rank of Group Captain were promoted, thus
cutting off
Service specialist skills at that level;
- the erosion of
professional military ethos as a consequence of the Defence
organisation
preferring the promotion of military bureaucrats to the higher levels
of
Defence management rather than military professionals;
- the loss of
the Services’ Support Commands and the creation of a Defence
Acquisition
Organisation (DAO), replaced later by the Defence Materiel Organisation
(DMO),
to manage all new capabilities, and later in-service support on the
grounds
that the Minister of the day did not want ‘two separate acquisition
organisations’; and
- the deterioration in professional military
thinking
and writing.
The
single-minded, bureaucratic imposition of the CSP was particularly
destructive.
The program failed to recognise the critical dependencies of the
Services
– those functions that, if not under direct command and control of the
Service Chief, have the ability to impact directly Australia’s military
readiness, responsiveness, sustainment, and operational flexibility.
The loss
of control of these critical dependencies has led directly to the
dramatic
reduction seen in operational, technical, and management skills and
competencies
within all three Services and within Defence/DMO.
The
result has been a widespread and pervasive loss of the operational,
technological, and management expertise necessary to drive both Service
and
Defence policies, plans, and programmes. In general terms, the lack of
robust
operational requirements analyses, as well as the technical skills,
competencies and processes central to new capability acquisition, is
seen
across all three Services. In the RAAF, for example, their loss has
been
reflected in poor decisions and advice on, for example:
- the unnecessarily early retirement of the
F-111 force,
based upon a range of unsupportable claims by the Defence organisation;
- the ‘bailing out’ of the then Minister’s
improper and
faulty Super Hornet aircraft purchase, coupled with a blind acceptance
of all
manufacturer’s claims, even where they were not supported by the facts,
or even
by simple, professional common sense;
- the unquestioning acceptance of the Joint
Strike
Fighter decision and the subsequent unqualified acceptance of all
manufacturer
and project office claims and statements made in the face of highly
critical
analyses and reports emanating from local analysts and US governance
oversight bodies;
- the biased and unsupportable statements
made in
respect of even well demonstrated capabilities of the F-22 Raptor
fighter;
- the continued
poor and unprofessional management of Australia’s new air power
capabilities; all
- aggravated by a lack of professional military
thinking and
writing that now pervades the Service[8].
These
examples and others are covered well in the evidence given before the
JSCFADT
Inquiry into ADF Air Superiority in our Region [9].
In
short, the adverse effects of downsizing, deskilling, outsourcing and
the
dependence upon ‘generalists’ to manage specialist functions, all
degrade force
readiness, availability, and sustainability, as well as the quality of
the
professional military input to Defence/DMO plans and programmes.
While
this analysis focuses principally upon the ‘how we got to where we
are’, there
is a need for complementary, detailed studies in order to identify the
manner
in which the current situation may be reversed. That
is, how best to expand and deepen the numbers and professional
expertise of those Service personnel involved with the intermediate
support (sustainability)
of combat units, as well as those involved with new capability
specification,
development, acquisition, and support. However,
these two areas of study must await a firm
political commitment
to meaningful change – change based upon what is best for our fighting
services, rather than what is best for the Defence bureaucracy.
|
The Management of Capability Acquisition
Background
Prior
to the DER/DRP/CSP, the RAAF, for example, was able to introduce new
capabilities and supporting systems to time, cost, and capability, and
supported fully at all lines of maintenance (both in-Service and within
contractors) from the date of introduction. Project teams were drawn
from
across the Service with the appropriate span and depth of operational
and
technical/supply skills, and disbanded when the project was finished.
The RAAF
thus had in place at all times a constantly evolving skills and
competency base
that kept pace with operational and technology changes, it was thus
able to
support capability acquisitions without great stress [1].
While
these skills and competencies were gutted by the reform process, some
had
filtered into the Defence and DAO/DMO organisations during the 1990s
where they
helped to develop sound project management systems and processes.
However,
these processes started to unravel about 1995 under inappropriate,
destructive
and arbitrary Ministerial edicts. The deconstruction of due process,
with the
loss of its underlying integrity and openness, followed quickly. In
particular,
the Common (Project) Management Method (CMM) designed and introduced in
response to a recommendation from the ANAO in 1997 was abandoned
abruptly, with
‘Project Directors’ being nominated who reported directly to USDM
(under
Secretary Defence Materiel) for all direction and guidance, thus
bypassing due
process.
The
system of due process, built up by dedicated and skilled staff, was
abandoned.
However, having dispensed with due process, Defence/DMO were flying
blind, as
it is only through due process, backed by appropriate skills and
competencies,
that visibility and control of the factors that go to make up risk, as
well as
those technology factors that impact upon schedule, cost, and
capability, can
be obtained. The Defence/DMO reaction was to focus wholly upon process
while
trying to control that element of project management to which they were
most
politically sensitive – schedule. Cost and capability thus came a poor
second and schedule became unmanageable. However, as sound process was
replaced
by flawed process, the only recourse available to Defence/DMO was to
throw
money at problems in an attempt to meet unrealistic schedules. The
results of
this may be seen clearly in the ANAO’s DMO Major Projects Report
2007-08.
As
a result of these changes, there was now no viable process for
competitive
tendering and tender evaluation. This impacted all projects, leading to
the JSF
decision where Australia was committed without a contract and with no fall-back negotiating option. The lack of due
process was
soon exploited by a clever JSF marketing strategy, which was followed
by a
similar strategy that resulted in the Minister’s unilateral decision to
purchase the wholly inadequate Super Hornet against no credible
requirement.
Throughout
this period of replacing due process with flawed process, those who
questioned
Ministerial or Under Secretary edicts were ostracised, many of these
critics remain
in the wilderness to this day, while those who complied with the edicts
prospered.
Caught between a Defence leadership lacking any understanding of the
Services
and their needs, or the technologies involved, and characterised by
intimidation and an abhorrence of
bad news, and a department lacking any culture of
public accountability, critical specialist skills and competencies were
by-passed, swept aside, or allowed to wither. From 1999-2000, all
projects fell
into the management vacuum that was created. Elizabeth
Proust, in her review of Defence management,
reported upon the avoidance of accountability entrenched within the
Defence
organisation.
Herein
lie the reasons behind the continued mismanagement of Australia’s
Defence
procurement, as reflected in the ANAO’s Major Projects Report, and
there will
be no relief until the required skills and processes are restored to
ensure
visibility, control and accountability. The Services have to be
re-capitalised
so as to regain the professional expertise and competencies that they
have lost,
and due process re-imposed.
|
New Capability
Management
Overview
On
27th November 2008, the Australian National Audit Office
(ANAO)
released its Defence Materiel Office Major Projects Report 2007-08. The report, covering nine major
projects, was the first of a continuing series of reviews into the
status of
Defence acquisition projects, and was aimed at ‘improving transparency
and
public accountability in major defence procurement’.
From
about 1999/2000, the Defence acquisition organisation has been mired in
ongoing
public controversy over its mismanagement of major capability projects.
Failed
projects have cost Australia billions of dollars, while others have
either not
been delivered on time or have not provided the capabilities needed by
the
Services. Visibility of what was happening and why has been hidden
behind a
Defence Media smokescreen, supported by overly-optimistic and often
ill-informed,
untested, and misleading statements by Defence bureaucrats and senior
Service
officers.
A
review of the ANAO Report gives rise to concerns that the acquisition
methodology now employed is wholly inadequate and its continuance will
only
ensure that current deficiencies will not only persist, but deepen. As
discussed earlier, the primary causes for this were sown around 1995
and
matured in 1999-2000 when long-established and successful project
management
policies, systems and procedures were discarded in favour of a project
management approach that focussed upon faulty process and schedule to
the detriment
of cost and capability.
The
analysis that follows summarises the root cause behind the deficiencies
revealed in the ANAO Report. The findings
see an urgent need to reform the higher defence machinery to reduce
political/bureaucratic intrusion into areas where the Service Chiefs
carry sole
accountability and, in particular, to reorganise and re-develop the
operational, technical and management skills and competencies that once
resided
in the Services.
Without
these changes, Australia can look forward only to a further de-skilling
of its
Services and its Defence Industry, a continued withering of service
capabilities and morale, a surrender of control of Australia’s military
capabilities to foreign companies reporting to foreign boards of
management,
and decades of much reduced military capability and independence of
operation. In the extreme, this
situation carries a risk to Australia’s sovereignty.
The New Zealand Experience
Of
all the Western nations to encounter problems with the management of
their
defence departments, only New Zealand has reorganised its defence
organisation
staring from first principles, and is now reaping significant
returns. New Zealand’s services have been
reorganised and re-skilled so as to re-establish their professional
mastery,
and an effective system of governance oversight established.
The
New Zealand experience has much to teach Australia in how a department
can be
rescued and an effective system of management and good governance can
be
designed, implemented, and entrenched. No doubt Defence will try to
argue that
New Zealand’s strategic policies are different from Australia’s and so
their
solutions are not appropriate. However, any such response should be
seen simply
as confirming the departmental fault lines identified in this analysis.
|
| Likelihood |
Consequence |
Insignificant
1 |
Minor
2 |
Moderate
3 |
Major
4 |
Catastrophic
5 |
| Almost certain |
H |
H |
E |
E |
E |
| Likely |
M |
H |
H |
E |
E |
| Moderate |
L |
M |
H |
E |
E |
| Unlikely |
L |
L |
M |
H |
E |
| Rare |
L |
L |
M |
H |
H |
| Legend: |
| E– |
Extreme
level of risk (Immediate
action required by Executive and Directing Governance levels, i.e. do
not proceed with activity until this level of risk is reduced) |
| H– |
High
level of risk (Executive Management
attention required) |
| M– |
Moderate
level of risk (Able to
delegate to Implementation Management Level with ongoing Executive
Management oversight) |
| L– |
Low
level of risk (Able to be
managed through routine procedures) |
Table
1: Risk assessment
process and associated template of AS/NZS 4360:2004 (P.A. Goon).
|
|
On Risk Management
With
protestations of ‘very confusing’ and
‘enormous complexity’, avoidance of risk
is a common thread woven through DMO’s responses in the Project Data
Summary
Sheets that form part of the ANAO Major Projects Report 2007-2008.[12]
The
causes and impacts of this ubiquitous view of risk, risk management and
the
risks themselves, however, are nowhere qualitatively, let alone
quantitatively,
addressed. There is little evidence of any informed and professional
understanding of risk in projects, the risk management processes
required to
address them, or the difference between risks and technical problems.
The
term ‘risk’ does not, as feared by Defence/DMO, mean negative things. Risks, properly managed, are
opportunities to excel. When not properly managed, risks will migrate
to and
materialise under a contract by reason of a preceding failure to
identify,
analyse, and manage operational or technical risks in the manner
prescribed by
modern day Risk Management technique to prevent them from becoming
problems. Such
risks, and the problems that arise when / if risks do materialise, have
to be
controlled tightly throughout all phases of a project – from need to
satisfaction – but this requires skills and competencies not seen in
Defence/DMO.
The key to being a
risk-savvy,
smart buyer and a risk-savvy, smart maintainer is a sound understanding
of the
technologies involved. In the
absence of such expertise, the less than scrupulous contractor /
supplier will
always have the advantage.
The Australian Standard on Risk
Management (AS/NZS 4360:2004) is recognised
internationally as one of the best, that is, ‘world’s best practice’.
It has
been adopted as the basis for the over-arching International Standard on Risk
Management (ISO 31000 Risk management -- Principles and guidelines). Given this, Defence/DMO should have in
place very sound risk management processes.
However,
Defence/DMO, being first and foremost bureaucratic organisations, seem
uncomfortable with their performance being measured, and especially
being
measured on a continuing basis. They have thus avoided effective risk
management, which depends upon continuous performance measurement.
However, not
having the necessary processes in place, or the skills and competencies
required for the management of those processes, the achievement of
outcomes has
been shown to be inadequate, leading to consistently poor capability,
cost, and
schedule results.
Risks
that are not treated early in a project will only increase, as will the
cost of
rectifying underlying problems (i.e. defects), as the project advances
through
each of its phases. For this reason, the project design, development,
test and
evaluation (T&E) phase, and the production phase should always be
discrete,
separated by ‘go--no-go’ decision points (such as milestones). This is
not to
say there cannot be some overlap or conjointness between the activities
within
each phase, but in any such approach there are additional risks that
also need
to be managed.
The
management of the Joint Strike Fighter Project in Australia presents
the best
case study of a complete failure of risk management by the Department.
In the
Joint Strike Fighter (JSF) Project, Australia has been advised that
these
phases do and will continue to overlap to an unprecedented degree, with
only
17% of test and evaluation tasks being actually subjected to flight
testing.
This has driven risk to the project much higher. The recent decision by
Secretary of Defense Gates to ‘ramp up’ the JSF Program will merely bring
inevitable
catastrophe forward in time and, taken with his concurrent decision to
cease further F-22
production, he has also upgraded the risk to US global air dominance.
As
a direct consequence of the gross overlapping of the JSF
design/development, T&E
and production phases, some 500 aircraft are planned to be built and
sold to
customers, including Australia, before ground and flight testing have
been
completed. That is, the aircraft allocated to Australia, coming from an
early
production run, will be at the extreme high end of the capability risk
scale,
as well as the high end of the cost curve.
Both
DMO and the US DoD have been warned continually of materialising risks
with the
JSF Project, both by independent analysts and through a series of US
Government
Accountability Office and other governance reports. These warnings have
all
been ignored, with the result that these risks have snowballed to the
point
where the project itself is at risk of complete failure.
Criticism
in both countries has been ignored, muzzled, or subjected to coercion. Rather than ask core capability, cost
and schedule questions and demand clear and supportable answers, DMO
has merely
accepted the high pressure and more than often misleading media
announcements
orchestrated by the JSF Project Office and the manufacturer, with DMO
expressing only ‘satisfaction with the
answers provided’. In addition to not warning Government or the
Australian
people of the rapidly escalating levels of risks associated with the
JSF
Project, DMO has not even heeded the risk hazards protocols contained
in its
own Verification and Validation Manual
(ENG) 12-0-0001.
Some of the serious risks
inherent in the JSF
Program, made inevitable by the overlapping of the Design/Development,
T&E
and Production Phases, are now materialising.
US
civil action is currently being taken under the Federal False Claims Act, in
that the Lockheed-Martin software development process, its quality
control and
its compliance evaluations for the F-35 and other programs are alleged
to have
not complied with specified requirements[10].
A similar action is also in train under the same act in regard to the
stealth
coating applied to the F-22. This action arises from alleged false
claims,
false statements and false records made by Lockheed-Martin to the
United States Air
Force (USAF) during production of the “F-22 Raptor” (F-22)[11].
Both cases raise two major
areas of concern for Defence/DMO:
- Firstly, they
raise the dangers inherent in accepting at face value statements made
by
manufacturers in respect of the status of critical requirements. All critical requirements must be validated
independently by the
customer’s Project Office. Unfortunately, this demands an
operational
and technological expertise that is not evident in the Services or
Defence/DMO.
- Secondly, both
F-35 and F-22 Project Offices seem to have failed to identify that
critical
requirements were not being managed and recorded as specified. While it
is
important to determine how and why this happened, the question must be
asked as
to what other critical areas may not comply with specified requirements.
Finally,
Defence/DMO’s concept of risk management was re-interpreted around
2005-06 to
an ethos of ‘de-risking projects’, seemingly in an attempt at a
wholesale
avoidance of all risks associated with in-service support. This
required the
capability manufacturer to provide all in-service support, except for
the very
lowest level of flight line servicing. Critical engineering,
maintenance and
supply support management has also been passed off to the Prime
Contractor.
Under
this concept, Australia’s front line military capabilities will be
plugged into
overseas-controlled facilities over which Australia will not have
adequate
visibility or control. Such contracts will only further entrench
de-skilling of
the Services, degrade Australian control of its military capabilities,
and
spell the end of the remnants of Australia’s Aerospace Defence
Industry.
Government policy in relation to the need for a robust local Defence
Industry
to assure self-sufficiency is not being considered, and the potential
for
eventual compromise of Australia’s sovereignty is real.
The
concept and use of ‘de-risking’ of contracts in DMO are both wholly
inappropriate for the management of risk in any military operational,
engineering, or logistics activities where requirements must be driven
by fully
and carefully specified objectives.
The final
risk with all of DMO’s ‘de-risked’
projects, when they fail, will always rest with the customers –
Australia’s defence forces who have to fight with the equipment, or
fight without
it, and the Australian people who have to pay for it.
|
The Two Faces of Risk
While
Defence/DMO both exhibit an unhealthy lack of appreciation of risk, its
importance and how it should be managed, contractors also have to
assess and
manage risk in dealing with their customers.
If
a customer has demonstrated a high level of skill and competence in
managing
the operational, technical, and project aspects of his contracts, as
demonstrated by a history of having projects come in on time, cost, and
schedule, without resort to contractual or legal redress, the total
project risk
to the contractor will be low and this will be reflected in his price.
On
the other hand, if a customer shows little competence in operational,
technical, or project management activities, or has a record of costly
delays
to which he contributed, then a contractor is bound to add a
significant
component into his price to treat this ‘customer risk’.
Some
contractors, long-experienced with such customers, see ‘customer risk’
as an
opportunity to financially gouge Defence and, thus the Commonwealth,
using
bidding, contractual and legal techniques born from such experience. Far too often, the inflated price
Australia is paying reflects predatory contractors taking advantage of
an inept
procurement bureaucracy.
Australia’s
Military Services were once recognised as highly informed and competent
customers because of their professional skills, competency and
knowledge base,
but with the de-skilling of the Services and the introduction of less
than
successful project management methodologies, this reputation has
largely been
lost.
|
On Project Management
Similarly,
instead of adopting proven, internationally-accepted
project management standards, DMO has evolved its own Standard of
Complex
Project Management - well titled in that it promotes a strange mixture
of chaos
theory and elitist ethos and attitudes. As
a result, the simplest project management processes
have become
unnecessarily complex. The adoption of Australian and International
Standards
on Project Management would have avoided this unnecessary complexity
and its
consequential cost.
The
reasons behind DMO’s adoption of an inappropriate Standard of Complex
Project
Management may be traced, as follows:
- DMO, as well
as the Department of Defence as a whole, is focussed upon process
rather than
outcomes – capabilities that satisfy fully-specified, unambiguous
requirements. However, the
processes being used have been ‘dumbed down’ or simply ignored following a
series of inappropriate ‘reforms’, the de-skilling within the Services
as well
as DMO, and the appointment of people to management positions who lack
the
required knowledge, skills and competencies. Within this environment,
what may
have started out as being sound and appropriate process has been
replaced by flawed
and inappropriate process developed by, or on the advice of,
non-experts
lacking a focus upon capability outcomes.
- The result has
been the evolution of a web of processes that are unsuited to the task
of
achieving capability outcomes in an efficient, cost-effective, and
rigorous
manner; outcomes that satisfy the original, specified requirement, or
that
which has evolved over time in keeping with the strategic directives of
government.
The
adoption of the flawed Standard of Complex Project Management may thus
be
traced to the flawed approach to project management that has been
allowed to
become entrenched within both DMO and the Department.
|
On
Defence Industry Teamwork
Teamwork
is defined generally as working cooperatively to achieve a common aim,
usually
by pooling skills, competencies and experience. Defence
makes much of its Team Australia concept, which is
largely given lip service only. DMO’s supply and
support contracts will lead eventually to the loss of
important Small and Medium Enterprises (SMEs), not the creation of
local capabilities
able to provide self-reliance.
However,
there will always be an underlying conflict of interest between Defence
and its
contractors that must be managed skilfully and intelligently,
particularly when
the contractor is a major foreign prime answering to a foreign Board of
Management and its shareholders. In such cases, any contractor conflict
of
interest will be resolved in favour of the Company Board and its wider
business
interests. Caveat emptor becomes critical. Team Australia has much
potential to
develop Australia’s small and medium enterprises, but realisation of
that
potential requires sound operational, technical and management skills,
and a depth
of commitment not seen within Defence, so the potential of Australia’s
SMEs
remains undeveloped and untapped.
As one long-experienced
Defence contractor observed:
“DMO’s talk about
teaming
arrangements with industry is illogical. The basic concept of a team is
a group
striving to achieve the same objective (goal). The
primary task of any company is to maximise its long-term
profits for the benefits of its shareholders; the CEO is judged and
paid on the
basis of how well he does that. The DMO’s responsibility is to provide
Defence
with the required capabilities, while ensuring that the taxpayer gets
best
value for money. These objectives are fundamentally different, so how
can there
be effective ‘teaming’?”
Though
the details of the full answer are beyond the scope of this paper,
these words
provide some insight as to what the answer is.
Where
the development of the answer starts, in part, is that ‘form over
substance’ and
hollow words are no substitute for the substance of a pragmatic and
well
managed contract.
All
Defence contracts must proceed from a common customer/contractor
detailed and agreed
understanding of the operational requirements and the technical
standards that
have to be met.
They
cannot be simply the ill informed wants of one party to the contract,
expressed
in draconian fashion and based upon a culture of risk avoidance, over
those of
the other.
That
is, there must be a meeting of the minds of fairly equal skills and
competencies capable of managing professionally specified operational
and
technical requirements over the life of the project.
|
Spreading
the Problem
At
Page 49 of the ANAO Report, Para 1.7, DMO discusses the challenges it
faces in
meeting its contribution to the five percent efficiency dividend
demanded by
government, and states that a significant portion of this will come “through
a determined effort to achieve ‘cost of ownership’ savings
across its sustainment programs. These savings will be delivered in
consultation with Capability Managers by reviewing servicing schedules
for
equipment, examining platform usage patterns and rates of effort,
reviewing how
they do business and the subsequent demands placed on the supply chain.
As well
as introducing performance based contracts for in-service support work
undertaken by industry.”
The
potential for severe damage to Service capabilities, including the
areas of battleworthiness,
airworthiness and seaworthiness, are many and varied and are not within
the
competence of DMO to either qualify or quantify. We will see only a
further
bleeding of DMO’s management deficiencies into the in-service support
area. In effect, the proposal makes DMO,
which
has no accountability, a driver of engineering, maintenance, and supply
standards throughout the Services. DMO’s proposal also highlights the
importance of keeping project management and in-service support
management at
arm’s length.
|
The
Next Major Failure?
The Air Warfare Destroyer
(AWD) Project
The
planned AWD Project is seen as critical to Australia being able to
control the
sea lanes in our region, while providing security for the movement of
personnel
and materiel through our region and beyond.
Regrettably,
operational analysis of the rapidly evolving regional and global air
power and
missile threats that will arise over the next few decades indicates
that these
expectations are overly optimistic. Managing the project in the face of
this
in the threat baseline will present challenges that Defence/DMO
are ill-equipped professionally to handle.
The project will also
face the same range and type of unresolved management problems that
have been
identified in the ANAO Major Projects Report.
Not
surprisingly, the only solution seen by Defence/DMO has been to
establish yet
another layer of review and process; the establishment by the then
Minister of
an Air Warfare Destroyer Alliance
Principals’ Council to:
“Provide
strategic oversight,
governance and issue resolution for the Air Warfare Destroyer Alliance
and the
Alliance Project Board.”
The
Board will comprise five members under the chairmanship of Mr Mick
Roche, formerly
USDM, with three members from Defence/DMO and two from industry. It is
not seen
what special skills and competencies this group possesses that will
redress the
inherent lack of operational, technical and management skills within
Defence/DMO, or what it can actually contribute meaningfully to a
successful
project.
|
Skills
in Science and
Technology Support
Before
the Defence reform process, the Defence Science and Technology
Organisation
(DSTO) provided a spread of high quality, professional support to the
Services.
For the RAAF, these ranged from the close, joint management of the
structural and
fatigue problems unique to the military aircraft operated by the RAAF,
and
expert advice on fuels and lubricant technology, current and future
operational
analysis and research, cockpit ergonomics and human factors analysis,
and advice
across a wide range of scientific and technological disciplines related
to both
current and future needs of Australia’s air power. DSTO’s
reputation worldwide was high.
With
the imposition of the reform process, DSTO also suffered down-sizing
and
de-skilling much along the lines of the Services. Functions that drew
upon, and
depended upon, the scientific and technology base built up within DSTO
over
decades were outsourced. As with the RAAF, staff left the organisation,
often
the brightest professionals, to work for a contractor, while others,
disillusioned, simply left to work in other fields, especially
academia. This
immediately cut the pipeline that had traditionally topped-up the
knowledge and
skills base that resided within DSTO, while continuing to drain the
pool of
skills that remained.
The
loss of DSTO’s skills base, and the impact of its becoming merely another
function to be ‘managed’ along commercial lines by a Defence Department
having
no science or technology awareness, was displayed in the quality of the
evidence given before the JSCFADT Inquiry into Australian Defence Force
Regional Air Superiority (2007), and earlier hearings on air power
matters. Statements on the F-111’s fatigue
status, the costs to retain in service, the cost and availability of
critical
spares, and so on, were simply unsupportable, lacking entirely in any
scientific or technological basis of fact[9].
As one long-experienced
DSTO member put it:
“The move to
outsourcing has been
happening for some time. When this was confined to routine
workshop/manufacturing support it made some sense, although I can
remember wind
tunnel models that took twice as long to make and cost at least 150% of
what
they would have, had they been built ‘in house’. When outsourcing moved
to the
engineering and scientific level it gradually reduced the pool of
expertise
available to DSTO.
In the
aerodynamics area the writing
was on the wall some time ago when we were told that in future the RAAF
would
by relying on the aircraft manufacturer for all stores clearance work.
This of
course will limit the RAAF in the source of the weaponry available to
it. I
believe that the outsourcing of structural and fatigue management to
the
aircraft companies is a dangerous path to be taking….the RAAF will be
at the
mercy of these companies, putting it in the same position as any
third-world
country.”
The
new Chief Defence Scientist seems to have been selected well in regard
to his
professional competency, but he may find his pressures coming from
other than
scientific/technology challenges. Firstly, DSTO now forms part of a
Defence
bureaucracy that possesses no scientific or technology awareness, and
does not
wish to develop any. DSTO is merely another ‘business activity’ that
must be managed
along ‘business lines’, especially in the outsourcing of its functions.
In
keeping with the Department’s pseudo-commercial management practices,
the DSTO
will now come under a DSTO Advisory
Board. As advised by the Minister’s Media
Release:
“This is a highly
qualified and
experienced group of experts who will provide advice on the DSTO
research
program in line with policy and relevance to Defence capability.”
However,
the ability of the ‘experts’ recommended by Defence, and approved by
Parliament
on Defence’s recommendation, to provide guidance and direction to DSTO
gives
cause for concern when measured against what would be expected in the
way of
qualifications and previous experience. Of the Chairman and the six
Members, three
have no science or technology qualifications and no experience in
Defence or
military matters. The remaining three have held past or hold current
positions
within the Defence bureaucracy, but have no science or technology
qualifications.
It
is thus difficult to see just how ‘this
highly qualified and experienced group of experts’ will be of any
useful assistance
to the Chief Defence Scientist in the management of his scientific and
technology duties. The Board is only ‘dressing’ and merely adds another
eight
people into the overheads of the bureaucracy. It will not redress the
loss of
skills and competencies within the Services, Defence Industry, or the
Defence/DSTO
organisation.
|
Review
of ANAO DMO
Major Projects Report 2007-08[12]
The
nine major projects covered by the ANAO Pilot Report have been analysed
in an
effort to establish the root cause for the problems being encountered
in the
management of major projects, rather than the mainly symptoms offered
by DMO in
the Project Data Summary Sheets that form the core of the Report.
The
factors identified, which are common to the majority of the projects,
are
summarised as follows:
- Firstly, the
great majority of the projects started out and proceeded without an
appropriate
skills and competency base, and without the systems and processes
required for
sound project (including risk) management. Without
these, the projects failed continually to identify
risks and operational and technical problems, and so it was impossible
to
manage risks and problems in a timely manner.
- Secondly, a
wholly inappropriate acquisition methodology was adopted, one which
called for
the unquestioning acceptance of contractor statements in a bid to
offset the
absence of organic skills, competencies and proper management
processes. The
primary focus of this methodology was on process that became
increasingly
flawed, an approach guaranteed to lose visibility and control of all three core project management objectives –
capability,
schedule and cost.
- Thirdly, the
failures were compounded by the adoption of an inadequate and
misleading
concept of risk and its management, and the use of a unique ‘Complex
Project
Management’ philosophy rather than established international standards
with
their integrated performance measurement requirements.
- Fourthly, the
move towards total contractor support for major weapon systems will
reduce
further the skills base of the Services and of our Defence Industry
capabilities. This policy
makes Australia dependent for its critical military capabilities upon
foreign companies operating as monopoly suppliers, answering to foreign
boards
of management and their shareholders, a parlous situation that has
never been
permitted to happen before.
|
Future
Prospects for DMO?
Despite critical Australian National
Audit Office
reports and strong criticism from the Joint Committee of Public
Accounts and
Audit, Defence/DMO remain in denial and totally resistant to needed
change. The
organisation can only voice the excuse of its projects “being
large, complex systems integrations…They
are very complex. I would hope
that over the next five or 10 years of this report (the ANAO Major
Projects
Report) you see a transition where things
do not happen anymore, or we mitigate some of those risks”.[19]
So,
in about a decade, DMO may be able to show some improvement in the
management
of its major projects. With its history of failures, and with no
current
prospect of change for the better, DMO is a key Defence organisation
demanding
fundamental and pervasive change that must go back to first principles.
The
functions of DMO are far too critical to be left to drift on as they
are.
|
The Management of Defense
in the United States
The
many lessons to be drawn from the management of Defense and capability
acquisitionin the US demand deeper analysis.
During
the mid-1980s, the US Congress decided that its Department of Defense
and its
Defense Procurement Organisation were broken and so a range of reforms
were
undertaken under the Goldwater-Nichols Act of 1986.
However,
Defense, political, lobbyist, and contractor intransigence combined to
block
real change, so the problems persisted and inevitably became worse. The problems seen with major capability
acquisition in the US today have become entrenched by a failure of good
governance, a product of a too-cosy relationship between major
capability
manufacturers and the Pentagon, the Department of Defense, and the
polity.
Today, the accumulated mess of poor governance has been left to a new
President
to clean up. Regrettably, repeated statements and numerous decisions
produced
by Defense Secretary Gates do not give any confidence that the need for
real change
has been acknowledged, let alone started.
At
one US House Committee hearing into Defense and Defense procurement,
frustrated
Committee Members charged contractors with outright deception, their
sole
objective being to make money. Underperforming
weapons they said were being hawked that
were
overcharged and not delivered on time.
There
is a now a marked tendency, both here and in the US, for Defence
Departments to
blame the contractor for problems that they encounter with their
projects. However, it is important to
recognise
that critical management deficiencies also exist on the part of
customers,
particularly customers working from within government bureaucracies
that
contribute significantly to, and indeed aggravate, problems with
projects
through their lack of expertise, lack of openness, and failure to
follow due
process.
On
30th January 2009, John Young, acquisition chief at the
Pentagon,
wrote to the Secretary for Defense giving his Office’s assessment of
the
reasons behind the failures reported frequently by the Government
Accountability Office, as well as other government oversight bodies. The principle reasons behind the
perceived project failures, as seen by Young, together with the real
reasons, may
be summarised as follows:
|
Problem (Cause) |
Comments |
1.Artificially low cost estimates at the
start of the program to get it accepted (the ‘bait’).
|
The
project office must have the skills, competencies and processes to
enable it to analyse the system configuration, identify operational and
technological areas for problems and risk, evaluate these, and use its
experience to generate a ‘best cost’ estimate. These
skills and competencies are also invaluable in testing all contractor
claims regarding cost, schedule and capability. If
a project starts poorly, then it is likely to continue that way.
|
| 2.Excessive performance requirements.
|
The
project office must have a firm Statement of Operational Requirements
and a supporting Technical Requirements Specification before
proceeding, and must establish a tightly disciplined requirements
change process.
|
| 3.
Too
little understanding of the design. |
The
project office must have a skills and competency base appropriate to
the operational and technological (including integration)
characteristics of the project, supported by the relevant risk and
project management processes. It is folly
to proceed without these.
|
| 4.
Immature
technology. |
The
project office must have even higher skills and competencies in those
areas where the technology is immature so that it can ask the difficult
questions and be able to evaluate the answers professionally.
|
| 5.Complexity in development and
integration. |
Complexity
is not a bar or an insurmountable challenge. Complexity
simply requires skills in the process of technical and functional
deconstruction of the whole into elements that can be managed with low
risk along standard lines up to the point of integration where system
integration skills come to the fore. Having
the appropriate skills, competencies and processes makes complexity
quite manageable.
|
| 6.
Optimistic
schedule. |
Optimism
will always be a characteristic of bureaucracies and project offices
that do not have the skills and competencies to construct and quantify
the Project Work Breakdown Structure, and so construct realistic
schedules.
|
| 7.
Fluid
program strategy. |
This
is a product of inadequate skills and competencies, aggravated by a
lack of process and/or inappropriate bureaucratic/political decisions.
|
| 8.Poor
status at the point where
development and production start. |
This
usually occurs from a combination of inadequate skills and
competencies, often driven by arbitrary political/bureaucratic
decisions aimed at hiding unpleasant facts and avoiding accountability.
Shifting developmental work into the
production phase, assisted by the creative accounting identified by the
GAO, has been developed into a fine art by the JSF manufacturer. This project should be used as a case study of
how not to manage a project.
|
| 9.Runaway requirements changes. |
See
Item 2 above.
|
| 10.Reductions
in the number of systems
required. |
This
more often occurs in response to budgetary decisions.
The Services have to reduce the number of weapon
systems they can afford to keep within budget restraints.
However, this merely increases the unit cost and
further reduces the affordable number, and so the cycle continues. A project that has reached this point is in
dire trouble.
|
Table 2: PRINCIPAL
REASONS FOR PROJECT
FAILURES
Young did not propose any changes to the US Defense
acquisition process, concluding that there is reason for confidence in
the
Department’s procurement process, and that somehow the widespread
difficulties
listed all lie outside the Department and its control.
This
is the type of response characteristic of bureaucracies which, by
nature, are
extremely self-serving, highly sensitive to any criticism, and careless
with
the facts when they are unwelcome. The situation seen in the US is
fundamentally the same as that now seen in Australia, and other Western
nations, for much the same reasons.
Importantly,
Mr Young’s ‘reasons’ are only symptoms of deeper problems, identical to
those
put forward by Australia’s DMO. He
fails to recognise the core problems of:
- a lack of the
required skills and competency base within the Services and in Defense
and its
procurement organisation;
- a failure to
analyse the evolving threat capabilities that must be met;
- a failure to
specify capability requirements fully and accurately;
- the failure of
Defense and its procurement organisation to follow what are well
defined and
well established project management processes;
- a lack of
visibility and failure to comply with the findings of governance
audits,
particularly by the GAO; and
- the presence
of too many contractors and advisors working within the Defense
Department and
its procurement organisation who came from major Defense Industry
Contractors;
contractors and advisors who carry far too much baggage that influences
their
decisions and advice.
In
both the US and Australia, the skills and competency base that existed
within
the Services, and enabled them to manage efficiently the procurement of
their
capability requirements over many decades, have been eroded and
sidelined to
the extent of sacking those military and civilian professionals who
voiced
concern over the way that their country’s capability development and
force
structure were being mismanaged. Until
that skills and competency base is rebuilt, and
takes a central
role in defence planning and procurement, the problems that are now
endemic to
most Western Defence Departments will continue to degrade both National
and
Western capabilities and impose an unnecessarily high security risk and
cost.
In
reviewing progress with Goldwater-Nichols Act reforms, the Centre for
Strategic
and International Studies saw a need to strengthen Congressional
oversight and
to transfer acquisition programs back to the Service Chiefs who are
legally
responsible for supplying capabilities[13].
The
same recommendations apply to Australia – better governance is needed
as
well as the return of capability acquisition to the Services where
fundamental
accountability for establishing and maintaining military capabilities
resides.
Unfortunately,
the US DoD has now demonstrated that it is far more broken than first
thought.
This was evidenced by the strange and indefensible positions on the
future of
US air power taken jointly by Michael Donley, Secretary of the Air
Force, and
General Norton Schwartz, Chief of the Air Force, on 13th
April 2009.
That both parties were subject to coercion must be considered a strong
probability
in view of the dramatic away from long-held, analytically-based,
calculations of USAF capability requirements that their new position
reflects. In addition, it must be
remembered that both their predecessors were sacked by Secretary Gates,
seemingly
for holding and voicing opinions that were contrary to those held by
the
Secretary and his advisors.
The
hurried ‘re-writing’ of the US strategic basis of its air power by Secretary
Gates and his
advisors, in an attempt to make his decisions on budgetary cuts to air
power a
little more plausible, reflects only a dangerous detachment from
reality. This ‘cooking of the books’ is
seen
often in Western defence bureaucracies when they are faced with
inexplicable
conflicts between capability requirements and flawed arbitary
policy/procurement
decisions.
The
dogged and unsubstantiated stand taken by Secretary Gates and his
departmental
advisors has ignited a bitter division between Congress and the Defense
Department executive, and now drawn the President into the mess. One senior House representative put it
as follows:
“It is not a
Democrat or Republican thing at
all, but rather a Congress versus the Executive in terms of who is in
charge. The Defense Department is
there to execute. We cannot allow
the executive to run roughshod over congressional responsibility. They
need to
learn who is in charge. The Congress is.” [14]
The
Gates proposal for the future defence of the US, if bulldozed through,
will be implementing
unilateral disarmament on the world stage in that the US will be
abandoning its
traditional, world-wide, air dominance capability and will concentrate
upon
small Global War on Terror roles. As a
result, the US will be unable to balance or contain
the military
capabilities of emerging nations or give substance to its numerous
treaties
that provide for the protection of its friends and allies.
It remains to be seen whether
the Department of
Defense will control America’s defence strategy, policy and direction
or
Congress. Much depends upon the answer, so Australia should follow this
evolving situation most carefully.
More
detailed discussion on the situation that has developed in the US is
covered
well in ‘Gate’s Epiphany’, an article
authored by retired Air Force Lieutenant General McInerny and retired
Army Major General
Vallely, both highly-experienced and respected professional military
officers.[15]
|
The
Underlying Reasons
for Management Failures
Over
the past two decades or more, the efficiency, effectiveness, and cost
effectiveness of the defence departments and the procurement arms of
most, if
not all, Western countries have been found wanting.
As a result, the deterrence and military capabilities of
those countries have now been eroded, singly and jointly, to the point
where
the balance of military power is shifting away from them. This has been
particularly so in the US.
The
continuing decay in the management of US military capabilities has been
the
subject of a long line of reports which have resulted in little, if
any,
improvement. During the mid-1980s,
the US Congress determined finally that the Department of Defense was
broken
and that the situation could not be allowed to continue.
Despite
bitter resistance from the Department, and more than four years of
congressional hearings, studies, and analyses, the Goldwater-Nichols
Department
of Defense Reorganisation Act of 1986 was finally passed. That the
situation
has only continued to deteriorate since then, points to failures
entrenched deeply
within the Department of Defense and its procurement arm, as well as
within the
US system of governance.
The
US Centre for Strategic and
International Studies (CSIS) began reviewing
progress with the changes required by the Goldwater-Nichols Act from
2004. Since then, CSIS has provided a
steady
flow of reports which have identified the factors that have singly or
in
combination continually hindered real progress.
The
reports compiled by CSIS thus provide a valuable insight into a
governance and
management environment that has been unable to reform the Department of
Defense, unable to introduce the core changes needed to ensure proper
visibility, control, and governance of the nation’s military
capabilities. Importantly, the reports
draw upon data
developed by the Department of Defense, the Department of State, the
Office of
Management and Budget, the Congressional Budget Office, the
Congressional
Research Office, and the General Accountability Office, all part of the
US
system of governance.
This
analysis will review three recent CSIS reports which bring together
well the
key fault lines that run through the US Defense and interfacing
military,
commercial, and government organisations. Apart
from scale, most of these faults can be identified
in the great
majority of Western defence organisations, including Australia, and
carry the
same consequences.
|
Report 1: A
Poisoned Chalice? The Crisis
in National Security Planning, Programming,
and
Budgeting, 23 April 2008.[16]
This report highlighted:
“The crisis in US
national security planning,
programming, and budgeting is not the fault of any one Administration,
and has
often been shaped by the mistakes of the US Congress and key military
commanders. It has accelerated
sharply over the past eight years. There
is no clear or coherent plan, program, or budget
that reflects the
fact the nation is at war and no credible mix of force plans,
modernisation
plans, and procurement plans for the future” (Synopsis).
“…the
planning, programming, and budgeting for the combination of the Afghan
War,
Iraq War, and the Global War on Terrorism have been badly mismanaged
since
2002, and there is no plan for the future .” (Uncosted, Unplanned Set of Wars, pp
42-65)
“The broader
problems in planning,
programming, and budgeting have been shaped by many factors, but one is
decoupling the efforts to define US strategy and goals from the
creation of
specific force, modernisation, and readiness plans to implement them.” (The
QDR and Strategy Implosion. No
Real Force Plans, Budgets, and Path for Modernisation, pp 66-81).
“The US has also
made cut backs in
force size and military manpower, as well as career civilians, that
current
efforts to increase Army and Marine Corp end-strength only begin to
address. The strains of
over-deployment on a relatively small total volunteer force already
threaten
the ability to recruit the proper mix of force quality and quantity.” (The
Defense Manpower Affordability Issue, pp 86-99.)
“The Department’s
current baseline
budget projections for operations and maintenance costs make no
allowance for
ongoing wars and are little more than absurd. There
is also no clear plan, program, and budget for dealing
with the growing ‘reset’ problem of coping with wartime losses and
wear.”
(The Operations, Maintenance, and ‘Reset’ Crisis, pp
105-109.)
“These problems
are so permeating in
every service, and affect so many critical programs, that it is
brutally
apparent that the Department has no real-world spending plans, and is
indulging
in a liar’s contest in terms of costs, the timelines for major
programs, their
probable effectiveness, the numbers it can actually procure, and the
force
trade-offs between modernisation and force cuts. It
certainly means a need to establish far more realistic
standards for estimating program costs, schedules and deployment times,
and
effectiveness, far tighter standards of program management, and far
tighter
control over the kind of changes in specifications and design that do
so much
to raise cost and increase program delays.” (The
Modernisation and
Procurement Crisis, pp 110-135.)
Report 2: America’s
Self-Destroying Airpower, 23 February 2009.[17]
This
report “examines the impact of a crisis
in aircraft procurement on tactical, strategic, and enabling
capabilities of US
air power.”
“Almost every
major aircraft
development program is in sufficient trouble to raise serious questions
about
the ability to maintain and modernise the overall fleet of US Air
Force, Navy,
and Marine Corps aircraft. Replacements
are stuck in a morass of procurement and
development
problems, cost explosions, and rifts within the Department of Defense.”
“These problems
are compounded by the
fact that there are now fewer program alternatives if any key aircraft
program
runs into trouble. They are also
compounded by the systematic underestimation of technology risk, growth
in
performance requirements, the use of failed methods of cost analysis,
and the
pressure to ‘sell’ programs by underestimating cost and risk. All have combined to push air
modernisation to the crisis point.”
The report summary stated:
“No military
service currently
demonstrates that it has leaders that can create affordable procurement
programs. Every service has, to
some extent, mortgaged its future by failing to contain equipment
costs, and by
trading existing equipment and force elements for developing new
systems that
it may never be able to procure in the numbers planned.”
“Instead of
rigorous leadership at
the level of Secretary and Chief of Staff, there is an ill-concealed
struggle
to solve the problems in a failed procurement system by either raising
the
defence budget or somehow getting more funding at the expense of other
services
and programs. The US defence
procurement system has effectively become a liar’s contest in terms of
projected costs, risk, performance, and delivery schedules. Effective leadership is lacking in any
of these areas. In both ship
building and military aircraft manufacturing, the services have become
their
own peer threats.”
Report 3: Reforming
Defense Decision Making-Taking Responsibility and Making Meaningful
Plans, 11
March
2009.[18]
This report starts by
making the following two important observations:
‘The formal
challenge to this
conference is to transform the way the Department of Defense does its
business. The danger is that it
implies that what is needed is yet another approach to organisation or
process,
and not a return to first principles.”
“In the last half
century I have seen
one attempt after another to solve the Department’s problems by
reorganising or
changing the way it does business, and by layering yet another new
process or
level of review over the existing ones. At
the end of it all, I believe we now have the worst run
department in
our history.’
As
this report contains the most succinct evaluation of what ails the US
defense
organisation, and as the points made are, in most respects, applicable
to
Australia and other Western nations, a synopsis of the report has been
included
at ANNEX B.
As
discussed in the body of this analysis, the problems seen over the
years with
defence management and equipment procurement in most, if not all,
Western
countries largely follow those identified by Professor Anthony
Cordesman.
Important Lessons
from Report 3
The
presentation to the US National Defense University cited in Annex B
includes a number
of subjects that should be of serious concern to Australia and other
Western
nations. These have been highlighted. In
particular, the presentation starts by warning of the
danger inherent
in current approaches to transforming the way the US DoD does business
in that
they imply that what is needed is yet another approach to organisation
and
process, not a return to first principles. Attempts over the past
decades have
only layered yet another new process or level of review over the
existing ones.
This
mirrors precisely what has happened under the bureaucratic control of
Australia’s military services imposed since 1974. Almost invariably,
the
recommendations of the interminable reviews and inquiries that have
been
conducted under tight control of the Department, have added only
further layers
of review within the bureaucracy, accompanied by additional processes. Any suggestion of a return to basic
principles, or the adoption of sound management practices, has been
rejected.
If
an organisation is to be effective, it must be structured so that it
achieves
its aims in the most efficient manner, with each organisational unit
having
clear accountabilities. Given a
sound organisational structure, policies, systems, and procedures (ie,
processes) must be put in place to ensure that the functions and
objectives of
the organisation are clear, concise, focussed, integrated, and have a
complete
unity of direction. These activities form the directive function of
sound
management.
The
organisation’s management system is then closed by means of a control
function
which, through various feedback loops, monitors continuously the
performance of
all functions, taking timely corrective action when required. Procedures/process are thus important,
but are not a means in themselves, and they
cannot
achieve organisational aims in isolation. They must exist only within a
sound
organisational and management structure, appropriate to the functions
of the
organisation, and be subject to continual monitoring and control to
ensure good
governance.
It
is quite clear that, as in the US, neither Australia’s military
services nor
its Department of Defence is now organised or managed along sound lines. Hence the need to return to basic
principles to get the organisational structure and accountabilities
correct and
then introduce sound management practices before any improvements can
be
expected.
The
Australian Department of Defence is currently involved in further
wide-ranging
change, which is described in the Defence publication ‘The
Strategic Reform Program, Delivering Force 2030’.
This programme (at page 4) has as its
major driver for reform: ‘Government
is seeking greater
accountability and transparency in the way Defence manages its budget,
and
expects the best possible advice on which to base its capability
investment
decisions’.
This
neatly shifts the focus for what will eventuate to government and its
need to
‘save’ money, avoiding the fact that all the reform reviews were
conducted within
Defence, and are thus based upon Defence’s demonstrated inability to
manage
properly any of its functions. The document then goes on to identify a
number
of areas of activity where change (perceived cost savings) is proposed,
all of
which have a far greater potential to further debilitate the Services
and hence
Australia’s security than do any good.
Savings
in costs in each area of activity have already been calculated; it is
now up to
each area to live within the reduced financial means allocated to it. The main question that arises is: Who
is measuring the impacts of all that must
flow from these cuts on Service capabilities, especially upon Service
capabilities,
morale and ethos, and how? The document consists largely of those
sweeping
assumptions, wishful thinking, and impossible objectives that are
characteristic of Defence documents. They read more like a marketing
exercise rather
than a sound management review.
These characteristics also
flow into DMO’s recent
document ‘Invest in Defence Capability
– Defence + Industry Conference 2009’. This states DMO’s two goals as being delivering
projects and sustainment on time,
on budget, to the required capability, quality, and safety; and make DMO more business like, accountable, and
outcome-driven.
The
current structure of DMO, its focus upon ‘business methods’ rather than
professional military analysis and robust project management
methodologies, and
its focus upon process rather than capabilities and cost, together with
its
lack of critical operational and technological expertise and failure to
follow
due process, have, since its formation, dictated against it achieving
any of
its stated grand goals.
Returning
to the Strategic Reform Program, this will be headed by a Defence
bureaucrat
having no background in military matters, with the rank of Deputy
Secretary. On
top of the Departmental Reform Team, the Government (note government
holding
responsibility again) will establish a Defence Strategic Reform
Advisory Board
to be chaired by an independent professional. The membership will
include the
secretaries of the Departments of PM and Cabinet, Treasury, Finance,
and
Defence, as well as the CDF and the CEO, DMO.
Again,
we see yet another layer of review and process by a group that can
contribute
little, if anything, to ensuring that Australia’s military capabilities
are
being managed properly and our Services have the capabilities, skills,
and
competencies needed to ensure Australia’s security in accordance with
government requirements and the expectations of the Australian people.
The
Strategic Reform Program thus starts primarily from a cost saving
objective,
not from what the Services need to do their job. After
some 30 years of continual ‘reform’ by the Defence
bureaucracy, we are left with a thin, de-skilled, non-professional,
poorly
managed, part time, military that is becoming more a disparate
collection of
mercenaries than the highly cohesive, well-trained, professional and
competent,
high-morale Services with which the Australian public have identified
and relied
upon with confidence in the past.
This
Strategic Reform Program carries a real danger of further reducing our
current
poor military capabilities to the extent that governments should think
twice
before invoking the ANZAC spirit, for our military has been allowed to
decay
radically since Tange; our professional ANZAC military values have been
largely
stamped out, coerced, or seduced out of existence.
|
Summary
The
current structural failures seen within the Australian Defence
bureaucracy, not
just those evident in the current capability acquisition organisation,
go back
to the Tange days and the unfettered power given the civilian
bureaucracy to
‘reform’ the Services and the higher defence machinery as it wished.
The
results have eroded the professional management of Australia’s Military
Services, impacted National security, and placed Australia’s Defence
Industry,
particularly the Aerospace Industry which
provides a
major part of Australia’s self-reliance, in jeopardy.
The
problems that Defence/DMO have created and perpetuated will now make
Australia
largely irrelevant both regionally and internationally over the next
three or
more decades:
- unable to
muster or project any significant or demonstrable deterrent military
power;
- unable to
contribute as a leading nation to regional security arrangements;
- unable to pull
its weight in concert with international forces or in support of
bi-lateral
security treaties and arrangements;
- made wholly
dependent upon foreign companies for the availability and support of
its major
military capabilities, and
- lacking any real measure of self-reliance.
If this situation is to come under
control and
reversed, then:
- the higher Defence machinery has to be
reviewed and
modified so that military matters come under professional military
officers.
Civilian intrusion into military matters has to cease;
- the Services
have to be reorganised to enable them to exercise proper command and
control over
those factors critical to their responsibilities for the specification,
acquisition,
operation and support of their force capabilities;
- the Services
must also be retrained to regain the skills and competencies they need
to
achieve professional mastery of the capabilities they operate and
support; and
- capability sustainment, development and
acquisition must
become the primary drivers for all defence planning.
The focus on financial management and outsourcing,
almost invariably
to the detriment of these primary drivers, has to be reversed.
In
particular, DMO has to be reorganised to replace its current
‘generalist’,
pseudo-business-like management approach with the professional
operational,
technological, and management skills and procedures that capability
development
and acquisition tasks demand.
There
is also an urgent need to halt the current, common practice of simply
adding
additional layers of review and process as an answer to Defence/DMO
management
problems. There must be a return
to first principles so as to get the organisational structure and
accountabilities properly aligned and then introduce sound management
policies,
systems and processes before any improvement can be expected. Robust management feed-back
loops are critical to ensure that management is effective and good
governance
is embedded.
Great
care, however, will need to be taken to ensure that reform stems from
what the
Services need to discharge their responsibilities, and that the
required
balance of operational, technological, and management skills and
competencies
are nurtured and applied, not what is most comfortable for the
bureaucracy.
Finally,
it is important to recognise that the reasons behind the continued
decline in
the management of Australia’s military capabilities may also be seen in
most,
if not all, Western nations, especially the US. All
involved with defence matters should study closely and
learn from what has happened, and is still happening in those nations,
and take
the steps needed to avoid blindly repeating such mistakes.
|
|
Endnotes
[1] APA Analysis 2008-10,
Rebuilding the Warrior Ethos.
[2] Tange. Sir
Arthur Tange, Secretary, Defence of
Defence, during the Whitlam Government. He
was instrumental in persuading the Minister for
Defence, Lance
Barnard, to disband the Departments of Navy, Army, Air and Supply and
bring
those functions under central control of the Department of Defence.
[3] Robert Michaels, ‘The Iron
Law of Oligarchy’, 1911.
[4] ‘Washington’s War’, Michael Rose.
[5] Sean Rayment, Defence
Correspondent, ‘Takeover of Royal Navy Air Power’, Telegraph Co.UK, 7
June
2009.
[6] Dr K. Anders Ericsson, University of
Stockholm, Sweden, 1976. ‘Cognitive/Development
Faculty and Expert Performance’ and
‘Deliberate
Practice – an Updated Excerpt from Ericsson (2000)’.
[7] Norman Doidge,
M.P., ‘The4 Brain
That Changes Itself”, Scribe Publications, 2007.
[8] APA Analysis
2009-03, The Decay
of Military Thinking and Writing.
[9] APA NOTAM, 5th November 2007,
Analysing The ADF Air Combat Capability – On the Record.
[10] Case:
CV-07-06385 R (CWx), in the United States District Court
for
the Central District of California, Western Division.
[11] Case:
1:06-cv-00013-RLF-GWC. Document
#36. Filed 05/26/2009 in the United
States District Court for
the District of
the Virgin Islands, St Croix.
[12] Australian National
Audit Office
Defence Materiel Office Major Projects Report 2007-2008, 27th
November 2008.
[13] APA Analysis 2008-01, Is This the Future of
Australia’s
Military Capabilities.
[14] Rep. Neil Armitage,
D-Hawaii,
‘F-22 Fight Divides Gates, US Lawmakers’, Defense News, 18 June 2009.
[15] Tom McInerny and
Paul Vallely,
‘Gates Epiphany’, Human
Events.com, (www.humanevents.com),
24th
June 2009.
[16] Anthony
H. Cordesman, ‘A Poisoned
Chalice? The Crisis in
National Security Planning, Programming, and Budgeting’, 23
April 2008, Centre
for Strategic and International Studies (CSIS).
[17] Anthony H.
Cordesman, and Hans
Ulrich Kaeser, ‘America’s
Self-Destroying Air Power: Becoming your own Peer
Threat’, 23 February 2009, CSIS.
[18] Anthony H.
Cordesman, ‘Reforming
Defense Decisionmaking - Taking Responsibility and Making Meaningful
Plans’, 11
March 2009, CSIS.
[19] Evidence given by
DMO before the
Joint Committee of Public Accounts and Audit, Thursday, 19 March 2009,
Page
PA11.
|
Annex A
INTEGRITY
Address
by Marine Corps General Charles C. Krulak at the Joint
Service Conference on Professional Ethics, (JSCOPE)
2000, 27th January 2000
Introduction.
JSCOPE
is a Joint Services Organisation that has been in effect for some 20
years. They meet regularly to talk
ethics/values/leadership. I gave
that address yesterday in Washington…, with a ‘header’ and a 30 minute
Q&A. It had students from all
services academies plus officers from General/Admiral to ensign/2nd
Lt.
Address.
We
study and we discuss ethical principles because it serves to strengthen
and
validate our own inner value system. It gives
direction to what I call our moral compass. It
is the understanding of ethics that
becomes the foundation upon which we can deliberately commit to
inviolate
principles. It becomes the basis
of what we are; of what we include in our character.
Based on it, we commit to doing what is right. We expect such commitment from our
leaders, but most importantly we must demand it of ourselves.
Sound
morals and ethical behaviour cannot be established or created in a day,
a
semester, or a year. They must be
institutionalised within our character over time. They
must become a way of life.They go beyond our
individual services and beyond our ranks
or positions. They cut to the
heart and to the soul of who we are and what we are and what we must
be; men
and women of character. They arm
us for the challenges to come and they impart to us a sense of
wholeness. They unite us in the calling we know
as
the profession of arms.
Of
all the moral and ethical guideposts that we have been brought up to
recognise,
the one that, for me, stands above the rest, the one that I have kept
in the
forefront of my mind is Integrity. It is my
ethical and personal touchstone.
Integrity
as we know it today stands for soundness of moral principle and
character,
uprightness, honesty. Yet there is
more. Integrity is also an ideal,
a goal to strive for, and for a man or woman to ‘walk in their
integrity’ is to
require constant discipline and usage. The
word integrity itself is a martial word that comes to
us from an
ancient Roman Army tradition.
During
the time of the twelve Caesars, the Roman Army would conduct morning
inspections. As the inspecting
Centurion would come in front of each legionnaire, the soldier would
strike
with his right fist the armour breastplate that covered his heart. The armour had to be strongest there in
order to protect the heart from the sword thrusts and from arrow
strikes. As the soldier struck his armour,
he
would shout ’INTEGRITAS’ (IN-TEG-RI-TAS) which in Latin means material
wholeness, completeness, and entirety. The
inspecting Centurion would listen closely for this affirmation and
also for the ring that well kept armour would give off.
Satisfied that the armour was sound and
that the soldier beneath it was protected, he would then move on to the
next
man.
At
about the same time, the Praetorians or Imperial Bodyguard were
ascending into
power and influence. Drawn from
the best ‘politically correct’ soldiers of the legions, they received
the
finest equipment and armour. They
no longer had to shout ‘Integritas’ to signify that their armour was
sound. Instead, as they struck
their breastplate, they would shout ‘Hail Caesar’, to signify that
their heart
belonged to the Imperial Personage, not their unit; not to an
institution, not
to a code of ideals. They armoured
themselves to serve the cause of a single man.
A
century passed and the rift between the legion and the Imperial
Bodyguard and
its excesses grew larger. To
signify the difference between the two organisations, the legionnaire,
upon
striking his armour would no longer shout ‘INTEGRITAS’, but instead
would shout
‘INTEGER’ (IN-TE-GER).
Integer
means undiminished, complete, perfect. It not
only indicted that the armour was sound, it also indicted that
the soldier wearing the armour was sound of character.
He was complete in his integrity; his
heart was in the right place; his standards and morals were high. He was not associated with the immoral
conduct that was rapidly becoming the signature of the Praetorian
Guards.
The
armour of integrity continued to serve the Legion well. For
over four centuries they held the
line against the marauding Goths and vandals, but by 383 AD. The social
decline
that infected the Republic and the Praetorian Guard had its effects
upon the
Legion.
As
a 4th Century general wrote: “When, because of negligence
and
laziness, parade ground drills were abandoned, the customary armour
began to
feel heavy since the soldiers rarely, if ever, wore it. Therefore
they first asked the Emperor
to set aside the breastplates and mail and then the helmets. So our soldiers fought the Goths
without any protection for the heart and head and were often beaten by
archers. Although there were many
disasters, which led to the loss of great cities, no one tried to
restore the
armour to the infantry. They took
their armour off, and when the armour came off, so too came their
integrity.” It was only a matter of a few years
until
the Legion rotted from within and was unable to hold the frontiers. The Barbarians were at the gates.
INTEGRITY. It
is a combination of the words
INTEGRITAS and INTERGER. It refers
to the putting on of armour, of building a
completeness;
a wholeness; a wholeness in character. How
appropriate that the word integrity is a derivative of
two words
describing the character of a member of the profession of arms.
The
military has a tradition of producing great leaders who possess the
highest
ethical standards and integrity. It
produces men and women of character; character that
allows them to
deal ethically with the challenges of today and to make conscious
decisions
about how they will approach tomorrow. However,
as I mentioned earlier, this is not done instantly.
It requires that integrity becomes a
way of life. It must be woven into
the very fabric of our soul. Just
as was true in the days of Imperial Rome, you either walk in your
integrity
daily, or you take off the armour of the ‘INTEGER’ and leave your heart
and
soul exposed; open to attack.
My
challenge to you is simple, but often very difficult. Wear
your armour of integrity; take full measure of its
weight; find comfort in its protection. Do not
become lax, and always, always remember that no one can take your
integrity from you. You and only You can give it away!
The
biblical Book of Practical Ethics, better known as the Book of
Proverbs, sums
it up very nicely: “The integrity
of the upright shall guide them:
but the perverseness of transgressors shall destroy them.” (PR 11:3)
|
Annex B REFORMING DEFENSE
DECISION MAKING
Cited from:
Anthony H. Cordesman, ‘Reforming
Defense Decisionmaking - Taking Responsibility and Making Meaningful
Plans’, 11
March 2009, CSIS[18]
SYNOPSIS
1.
The formal
challenge of this conference is to transform the way the Department of
Defense
does its business. The danger I
find in this title is that it implies that what is needed is yet
another new
approach to organisation or process, and not a return to first
principles.
2.
In the
last half century I have seen one attempt after another to solve the
department’s problems by reorganising, by changing the way it does
business,
and by layering yet another new process or level of review over the
existing
ones. At the end of it all, I
believe we now have the worst run department in our history.
3.
All of
our
services face a crisis in their force plans and procurement plans. We are killing force structure to try
to buy more weapons. We face
critical problems in terms of manpower numbers, the balancing of our
active and
reserve forces, and our deployment cycles. We
talk about civilian partners as if this was something
new, rather than something we had in Vietnam and lost in the decades
that
followed. And, we are not funding
them in our budget.
4.
We talk of
‘jointness’, but the reality is that each service is involved in an
existential
battle for resources against the others. We have
gone into two
wars with no clear plan for conflict termination or for stability
operations. We have then tried to
manage wars through supplementals in the absence of long-term plans,
tried to
decouple military operations from nation building, and been so slow to
react to
the growth of the threat to Afghanistan that we are now losing a war we
once
thought we had decisively won.
5.
Some of
this can
be blamed on what may have been the worst national security team of the
postwar
era. As someone who thought Robert McNamara represented the nadir in
defense
leadership, I have to give Donald Rumsfeld credit for being the epitome
of a
micromanaging bully who scattered snowflakes like dandruff, and with
about as
much effect. I also have a
horrifying sense of déjà vu when I compare McGeorge Bundy and the
Rostows to
Cheney and our recent national security advisers. There
is far too little difference between the
‘neoconservatives’ of Iraq and Afghanistan and the ‘neoliberals’ of
Vietnam.
6.
The truth
is, however, that the problems we face are part of a defense culture
that has
been building for a long, long time. No
one administration or party is responsible, nor is any
one group of
leaders-civilian or military. It
is partly the legacy of cutting too rapidly in reaction to the end of
the Cold
War; and it is partly the result of a culture of accommodation,
process, and
consensus that buries decisions and issues in endless studies and
reviews.
7.
Let me
suggest that we do not need more reviews, task forces, contractors,
processes,
or paperwork. What we do need is to create a level of
accountability that forces the civilian and military leaders of the
Department to
take personal responsibility, and that this should be based on a return
to
three key principles:
- The first is that there
are no good intentions;
only successful actions.
- The second is that no
improvement in process can
compensate for decisive and timely leadership.
- The third is that nay
meaningful strategy must be
based on detailed force plans, procurement plans, program budgets, and
measures
of effectiveness.
8.
The simplest of these principles is that
there are
no good intentions, only successful actions.
9.
When I
first
came to the Pentagon almost exactly half a century ago, it was obvious
that
nothing we did by way of excuses or good intentions would compensate
for
another Korea, for a failure to compete in the Cold War, or for what
already
promised to be a high-risk venture in Vietnam.
10.
It did
not
matter what rank a civilian had or how many stars an officer had
achieved. It did not matter how nice they
were or
how good they were to their staff or their troops.
We had plenty of failures, and plenty of inadequate
leaders,
but the cost was clear and so was the standard of performance for
anyone with
serious rank or authority. Only
one thing you do counts; the success of
your actions
during your tour of duty.
11.
Let me put
this simply. It does not matter a damn what
Secretary Gates or Admiral Mullen try to do. It
does not matter how difficult the circumstances were,
are, and will be. The same will be
true of every civilian from director and deputy assistant secretary up,
and --
devalued as military rank is becoming – of every officer with the rank
of
major general or above. There
is only one test: what did you do that served the broader national
interest of
the U.S. successfully during your tour of duty. Not
your party, not your ideology, not your service; and not
your program.
12.
We have
virtually forgotten this standard; to the extent we ever set it or
tried to
enforce it. No one writes a
merciless epitaph for a Secretary or Chief of Staff who failed,
no one compares their actions to the list of key tasks they had to
perform.
13.
This brings me to the second principle:
no
improvement in process can compensate for decisive and timely
leadership.
14.
When I
first
came to the Pentagon, one of the more charming maxims of what then were
called
‘iron majors’, was that ‘a fish rots from the head down’. Their biology
was
faulty, but the principle was clear. Nothing happens without decisive
and timely leadership.
15.
In the
decades that have followed, we have come to operate under a different
principle. If you have the perfect
process, you do not have to take hard decisions as early as possible –
in
fact, you can defer them indefinitely by having more studies, review
boards,
contractors, and then accepting every problem as an exercise in
creative
accounting or claims about improved performance or unpredictable
problems. You ‘go along to get along’. You defend your program, your service,
your area of turf. Analysis is
more a tool of advocacy than making hard choices - often to the point
where it
becomes what Mark Twain used to call a liar’s contest.
16.
The worst
example is procurement. It did not
take vision to see that each service was headed for a situation where
defense
planning had become the equivalent of a fight for resources where the
service
that died with the most toys ‘won’. I have no
idea as to
whether Steve Kosiak was right when he estimated last summer that the
cumulative overrun of military procurement and RTD&E was reaching
$25
billion a year. Work by the GAO
and CBO make this seem all too credible based on the procurement plans
in
FY2007, and it is now clear that the only option is either major
delays, major
cuts in procurement goals, major cuts in forces -
or some awkward combination of the three.
17.
The fact
is, however, that the warnings were being sounded more than a decade
ago.
In
fact, the problem was clear by the mid-1990s.
It was also clear that budgets essentially were ‘no war’
or
‘no major contingency’ budgets and that force cuts were already being
made that
raised major questions about the adequacy of the all-volunteer force. We claimed to have two major regional
contingency strategies, and it was clear that we would have problems
with one
– unless it could be as quick and decisive as the first Gulf War in
1990-1991.
18.
There was,
and is, a school of thought that believed we could solve these problems
through
technology: through the most extreme versions of the ‘revolution in
military
affairs’. There was another school
who saw the solution in terms of greater efficiency through better
processes; a
school whose thesis seems to be that with the right process you can do
more and
more with less and less until you can do everything with nothing. What there was not, however, was hard,
timely decisionmaking and honest efforts at cost projection and cost
containment.
19.
Year after
year, our top civilian and military decisionmakers came and went
letting the
underbudgeting of procurement, force plans, and manpower grow. We then found ourselves fighting ‘long’
wars that we took years to
fully deploy and budget for, each year asking for supplementals that
tacitly
assumed we would win in the next year. We
were slow to react in Iraq, and took until FY2007 to
seriously budget
for Afghanistan. In fact, we used
the totally predictable inability to precisely predict the cost of war
to
create a nightmare of unrealistic annual baseline budgets, half
thought-out
supplementals, and pointless Future Year Defense Plans (FYDPs).
20.
And, if
this
sounds like hyperbole, let me remind you of what our current secretary
of
defense said about defense acquisition – just one of the major
challenges
we face – in testimony to the Senate Armed Services Committee on
January
27, 2009:
21.
“There are
a host of issues that have led to where we are, starting with
long-standing
systemic problems.
22.
-Entrenched attitudes throughout the
government and
particularly pronounced in the area of acquisition: a risk-averse
culture, a
litigious process, parochial interests, excessive and changing
requirements,
budget churn and instability, and sometimes adversarial relationships
within
the Department of Defense and between DoD and other parts of the
government.
23.
-At the same time, acquisition
priorities have
changed from defence secretary to defence secretary, Administration to
Administration, and Congress to Congress – making any sort of long-term
procurement strategy on which we can accurately base cost next to
impossible.
24.
-Thus the situation we face today, where
a small
set of expensive weapons programs has had repeated - and unacceptable –
problems with requirements, schedule, cost, and performance.
25.
Since the
end of WWII, there have been nearly 130 studies on these problems – to
little avail. I mention all this because I do not
believe there is a silver bullet, and I do not think the system can be
reformed
in a short period of time – especially since the kinds of problems we
face date all the way back to our first Secretary of War, whose navy
took three
times longer to build than was originally planned at more than double
the cost.
26.
We gave
weak
enemies time and the initiative, we pretended there were no major
out-year
implications, that reset would not result in much of the equipment
having to be
fully replaced or abandoned, and that we could let the real cost of
military
pay and benefits rise by 45% between 1998 and 2009 without jeopardising
our
existing strength levels – much less our ability to increase them to
the
levels we really need.
27.
Let me
give
those here at NDU a challenge. Once this
conference is over, take a list of senior
civilians and
military officers over the past 16 years. Examine
each as a case study, and write a list of how many
hard, timely
decisions each made. How many
really difficult trade-offs? How
many courageous exercises in timely, hard decisions?
How many study groups, reviews, etc., that actually led to
a
clear, decisive decision made in the national interest and not that of
politics, ideology, or a given service. Ask
then, is the problem process or leadership?”
28.
This brings me to the last of my three
principles:
Any meaningful strategy must be based on detailed force plans,
procurement
plans, program budgets, and measures of effectiveness.
29.
If God
really
hates you, you may end up working on a Quadrennial Defense Review. The most pointless and destructive
planning effort imaginable. You
will waste two years on a document decoupled from a real world force
plan, from
an honest set of decisions about manpower or procurement, with no clear
budget
or FYDP, and with no metrics to measure or determine its success.
30.
If God
merely
dislikes you, you may end up helping your service chief or the Chairman
of the
Joint Chiefs draft one of those vague, anodyne strategy documents that
is all
concepts and no plans or execution. If God
is totally indifferent, you will end up working on
our national
strategy and simply be irrelevant.
31.
Quite
seriously, I have no idea where we lost sight of the fact that policy
planning,
concepts, and good intentions are not a strategy. The
secretary used to issue an annual posture statement that justified the
budget
request in terms of detailed force plans, procurement plans, and at
least some
tangible measures of progress. The
chairman issued his own statement and views – sometimes explaining and
sometimes dissenting. For a while,
there were even crude attempts at an annual net assessment.
32.
Now,
strategy seems at best to be the conceptual underpinning of our defense
posture
and at worst a series of phrases and buzzwords that often seem to
contribute
nothing. The United States simply cannot afford
this, particularly at a time when a domestic and global economic crisis
may
last for at least several years, and when it faces another future
crisis in
paying for entitlements like Social Security, Medicaid, and Medicare.
33.
Is $533.7
billion in FY 2010 and 4.2% of the GNP enough? Enough
for what? Our most recent QDR is a morass
of half thought-out ideas
– many
calling for further study or otherwise deferring tangible action. We don’t have a force plan.
We don’t have a clearly defined,
defenser-wide procurement plan. We
don’t tie the QDR to end strength goals that are clearly defined and
costed. We haven’t provided
meaningful budget figures because the QDR is not tied to the FYDP. We haven’t set clear goals to be
achieved. We have no metrics.
34.
As for
service strategies,
it is nice
to know that the Army still intends to fight on land, the Air Force is
concerned with the air, and the Navy and Marine Corps still have
something to
do with water. At the end,
however, our service strategies are little
more than badly written,
service-specific pleading and the ‘strategy’ advanced by the Chairman
is simply
a badly written request for more.
They do not include a force plan,
manpower plan, or procurement plan. There
is no public program budget. There is no standard for measuring
success. Like the QDRs, they come
and go and
fade into pointless oblivion.
35.
Worse,
there is no clear alternative. When a
series of panels were set up to actually review key
issues in the
last QDR, they seemed to produce nothing. We
could write a FYDP
with less than 20 people in systems analysis in the early 1960s. Now we still have a FYDP that is little
more than a crude input budget that is not tied to any key mission area
that is
not directly relevant to our strategy documents to truly challenging
trade-off
analysis by PA&E or OSD comptroller. We
are fighting two demanding wars – which we call ‘long
wars’. None are in the FYDP, whose
details remain classified for reasons that simply do not exist except
to cover
up its lack of meaning and content.
36.
Would we
be where we are today if we forced the department to tie its strategy
to plans
and budget, if we demanded metrics, if we required a public annual
accounting,
and if we held our top leadership fully accountable?
Can any change in process or business practice make up for
this failure? The answer is no.
Putting
Pressure Where Pressure is Due.
37.
Every
military
audience has heard the cliché in military instruction that, ‘First, we
are
going to tell you what we are going to tell you. Second,
we will tell you. And third, we will tell
you what we have told you.’ I will spare
you at least the last
third of that formula. I think,
however, the punch line is clear. We can’t
afford to go on the way we have been operating. We
can’t afford to waste the world’s
best military on the world’s most mediocre leadership and try to keep
solving
our problems by throwing money at them. Every man and woman in uniform
deserves better, and for that matter so
do all of our allies and every American taxpayer.
|
Air Power Australia
Analyses ISSN 1832-2433
|
|
|
|
![Australia's First Online Journal Covering Air Power Issues [ISSN 1832-2433]](APA-Title-Analyses.png "Australia's First Online Journal Covering Air Power Issues [ISSN 1832-2433]")
