Editorial: Outside the DCP process | ADM April 2012

Katherine Ziesing | Canberra

As this edition of ADM was coming together, two announcements on the procurement of major platforms were made on the same day. One was confirmation for a sixth C-17A. The aircraft will be purchased through the US Foreign Military Sales (FMS) program, at a total acquisition cost of around $280 million. The purchase of the sixth C-17A will double the number of C-17A aircraft available for operations at any one time from two to four. It is expected to arrive in Australia early next year.

The other was that the Government has agreed to purchase the Offshore Support Vessel MSV Skandi Bergen. Minister Smith outlined the purchase of a third amphibious ship in December last year as HMAS Choules was being commissioned. The Skandi Bergen will add to the Royal Australian Navy’s current amphibious ships, HMA Ships Choules and Tobruk. The purchase of the Skandi Bergen – at less than $130 million – will ensure that Defence has the humanitarian and disaster relief capability required between now and the arrival of the two new Landing Helicopter Dock (LHD) ships. It will primarily be used to transport troops and supplies in support of humanitarian and disaster relief operations domestically and in the region.

Once the LHDs have come online “the vessel will also provide a long term capability for Customs and Border Protection,” according to a ministerial statement. It is a commercial off-the-shelf vessel that will require minimal modifications and will enter into service in the middle of the year. The Skandi Bergen is the sister ship of the ACV Ocean Protector, currently operated by Customs and Border Protection.

But the new and interesting development is that the vessel will be operated under a “civilian crewing arrangement” as foreshadowed in the afore mentioned ministerial announcement of a third ship.

ADM understands that the RAN is currently looking into the issue of civilian crewing and the flow-on effects of such a program.  Both the US and UK run similar programs under their Transport Command and Royal Fleet Auxiliary (RFA) respectively. The RFA is a civilian-manned fleet owned by the British Ministry of Defence.

The RFA enables ships of the UK Royal Navy to maintain operations around the world. Its primary role is to supply the Royal Navy with fuel, ammunition and supplies, normally by replenishment at sea. It also transports Army and Royal Marine personnel, as well as supporting training exercises. It currently has a fleet of 13 ships and four Military Afloat Reach and Sustainability (MARS) tankers were ordered in February of this year.

At this stage, the RAN is looking at a similar RFA-like arrangement for their organisation. The finer details on what happens to civilian crews during warlike operations are still being considered. No doubt there will be benefits for the RAN in terms of crewing shortages and there will also be a business case to be made for the move based on cost savings cited by both nations.

These two announcements also feed into another business case: the case for procurements outside the Defence Capability Plan (DCP) framework. These have become more frequent over the past few years with the purchase of numerous capabilities across all domains. While purchases under the FMS program are probably the most well known, particularly in the case of the Air Force, the Force Protection measures for Army under former minister Senator Faulkner and the recent purchase of both HMAS Choules and the MSV Skandi Bergen for the RAN are also outside the scope of the DCP.

There is also the realisation that the DCP process is growing ever longer. The first and second pass framework has also been extended to cover projects worth $20 million and upwards, down from $50 million. More paperwork on minors now. The trade off between accountability and urgency in procurement is heavily skewed towards the accountability side of the ledger.

As a taxpayer, this is a good thing. As a soldier, it’s less than ideal. Treading this fine line has always been a tough task for procurement managers who are stuck between the needs of government with their own political and economic realities and warfighters who face their own issues in the field. I must admit to siding on the importance of the realities faced by warfighters rather than those faced by politicians. But I digress.

Another element to consider with capabilities procured outside the DCP is that they are not subject to the same rigour in terms of life of type and Australian Industry Content (AIC) concerns. What does the bathtub curve look like for the new amphibious ships? Where does Australian industry feature in the sustainment program? Given the nature of the procurement, Australian industry had very little opportunity to take part in the original acquisition. There has been no AIC plan published to be held accountable for.

Defence Minister Smith announced at the ADM2012 Congress in February that the DCP is being revised to get rid of some of the deliberate over-programming and will be updated this year. Given the White Paper cycle and

the current Force Structure Review, is this a timely revision?