A wide-ranging review of the Defence Materiel Organisation (DMO) has been commissioned by the Government in an attempt to achieve further savings and a more commercial focus. It has been suggested that this review is part of a move towards splitting DMO from the Defence Department.
Greg Combet, the Parliamentary Secretary for Defence Procurement, announced that the review of Defence would be conducted by Mr David Mortimer AO. It follows some high-profile problems in Defence procurement projects.
According to Intermedium's Federal contracts data, the DMO reported contracts valued at $3.4b in 2006-07, accounting for approximately 40% of the total value of Department of Defence contracts.
Dr Stephen Gumley was recently reappointed as CEO of DMO, moving from a fixed term (that was due to expire in February 2009) to ongoing APS status. He will be responsible for implementing the future program of reforms within DMO, including any reforms that emanate from this review.
The leader of the review, David Mortimer, is currently Chairman of Leighton Holdings and Australia Post. He has also been Chairman of the Defence Procurement Advisory Board since 2004. He is expected to report within 12 to 14 weeks.
Terms of Reference for the review include an assessment of progress in implementing the 2003 Defence Procurement Review and further potential reforms. Submissions (by 6 June) are welcome.