Introduction

This second report on the status of selected Defence equipment acquisition projects continues to build on the work undertaken by the Defence Materiel Organisation (DMO) and the Australian National Audit Office (ANAO) to improve the transparency and public accountability of these major Defence acquisitions. It covers the cost, schedule and capability progress achieved by 15 DMO projects, which had an approved budget totalling $37.8 billion as at 30 June 2009.

Report structure

The report is organised into three parts. Part 1 comprises an ANAO overview, incorporating the Auditor–General's Foreword, a summary of projects' performance and acquisition governance issues arising from the ANAO's review. Part 2 comprises the DMO's Major Projects Report, including the CEO DMO's Foreword, lessons from last year's report, developments in DMO's business and longitudinal analysis of projects. Part 3 incorporates the Auditor‑General's Review Report, the statement by the CEO DMO and the information prepared by DMO in the form of standardised Project Data Summary Sheets covering each of the 15 projects.

In reviewing projects' performance, the ANAO's analysis indicates that maintaining major acquisition projects on schedule remains a major challenge for the DMO and industry contractors, affecting when the capability is made available to the Australian Defence Force as the end user.

In the next 12 months, the ANAO will review up to 23 DMO projects planned for inclusion in the 2009-10 Major Projects Report, with the number of projects rising to up to 30 projects in subsequent years. The ANAO and the DMO will be working with the Joint Committee of Public Accounts and Audit to further enhance the value of the report as it continues to evolve.