Saturday 21 Jul 2018 | 18:01 | SYDNEY
Saturday 21 Jul 2018 | 18:01 | SYDNEY

An end to corporate DMO


Graeme Dobell

6 July 2011 11:07

Along with Monday's discussion of Defence budget blizzard, another important trend is how the responsibility mantra is going to be applied to the Defence Materiel Organisation (DMO). Perhaps applied is too mild a term: think more in terms of blow torch metaphors.

Stephen Smith has ordered a speed-up in the implementation of the previous Kinnaird and Mortimer reviews and has another report sitting on his desk: the (Black) Review of the Defence Accountability Framework.

The Defence Minister says implementing the Black Review will improve accountability and ensure that the different parts of Defence work together more effectively. What that seems to mean is that the era of DMO trying to operate like an independent business is fading.

DMO spends more than 37 per cent of Defence's total budget and the current argument seems to be is that it is too important to stand on its own. The moment of truth for DMO was back in 2009 when Defence accepted all but one of David Mortimer's recommendations for how it buys and builds kit through DMO.

The one Mortimer idea that was sunk was the also the big game changer: to scrap the Defence diarchy and create a new top trio instead. Mortimer, the chairman of the Leighton Holdings, came up with a business-flavoured response to the need to make DMO more like a business. Put the head of DMO completely in charge. Make that position the equal to that of the secretary of the Department and the chief of the Defence Force.

The diarchy is controversial enough. Turning it into a three-way tussle was just too much for Defence. Every other Mortimer idea was embraced or at least partially hugged so that that the institution did not have to make room for a third king who would sit atop of DMO.

Having seen off the new king idea, Defence seems intent on bringing DMO even further back into the realm. Welcome to the clutches of the R1 building, Russell Offices.

The Canberra dogs have started barking that one of the reforms on Smith's desk will be the creation of two associate secretaries (super deputy secretaries) as part of the move to absorb DMO back into Defence. And that is prompting plenty of speculation about the future of one of Canberra's best-paid public servant, the head of the DMO, Dr Stephen Gumley.

After seven years at the top of DMO, Gumley is unlikely to relish having to answer to a super deputy secretary doing a bad-cop routine on his patch. As WikiLeaks revealed, Gumley has never had much faith in the fuzzy maths of this government, being 'unable to explain how the costing for the equipment of the [2009 Defence] White Paper came about.'

Being right about the maths does not necessarily protect you from the cold when the blizzard of reviews, reforms and responsibility is blowing strong.

Photo courtesy of the Department of Defence.