ISSUE 136 : May/Jun - 1999 - Australian Defence Force Journal

56AUSTRALIAN DEFENCE FORCE JOURNAL NO. 136 MAY/JUNE 1999comprehensive, objective analysis of Defenceacquisition and project management – warts and all.Rather than rely on project theory, Earnshaw takesa systematic, case study approach in order to illustratesignificant lessons for acquisition strategy and projectmanagement. He examines three major capitalacquisition projects in considerable detail – the BlackHawk Helicopter (largely managed by Air Force), theArmy’s Perentie vehicle and the Navy’s AustralianFrigate. The lives of these projects are traced fromidentification of requirement, through bureaucratic,political and committee approval processes and rightinto production. While all projects eventuallydelivered serviceable products, some fared worse thanothers in terms of cost and schedule blowout and fromthe perspective of defence/industry partnerships.Overall, Black Hawk and Perentie emerged asseriously flawed projects in several aspects, with theAustralian Frigate getting a “satisfactory” report card.Importantly, reasons for these assessments are spelledout in meticulous detail. For example, Army’sinability to justify to committees the number ofvehicles it required was a key factor in what proved tobe a dysfunctional acquisition process involvingpiecemeal ordering, disrupted production runs,assembly plant closures and dis-bandment of projectteams. Similarly, the Black Hawk suffered fromphased acquisition and attendant contract, cost anddelivery problems. In both cases, the authoremphasises the importance of Industry participatingmore fully in Defence acquisition processes.Dr Earnshaw gives credit where it is due andpoints to key project success factors, many of whichshould be applied in the planning and source selectionphase of projects. The Australian Frigate, for example,benefited enormously from research undertaken by theDefence Naval Destroyer Group (DNDG) which wasestablished specifically to resolve a range of complexissues concerning follow on destroyer forcerequirements and acquisition.Of particular interest to me is Chapter Seven(Decision Making Rationality) where, after describingeach project in detail and then comparing them in thefour previous chapters, the author seeks to clarify, asmuch as possible, the extent of rational decisionmakingin the three projects – this is important becausenon-rational decision making for new high-technologyprojects has resulted in notable planning disasters thatwe live with today. The author expertly traces thecontext of bureaucratic politics and suggests whycommittee players adopted particular positions fromtheir apparent behaviours, perspectives on long-termstrategic planning and “incremental bargainingtactics”.Earnshaw frequently points to where fundamentalimprovements in defence decision making process canbe achieved. For example, he suggests that, “… (a)system should be developed whereby ideologicaldifferences and values can be expressed and exploredin relation to strategic capabilities required to meetnational security objectives, and a far greater emphasison research and appropriate resource allocation in theearly planning stage. The relative success of theAustralian Frigate…can be attributed to the unusuallycomprehensive research conducted by bureaucraticadversaries during the conceptual and project planningstage of that project, the extensive training andexperience of successive project directors andpragmatic initiatives such as a two year deliveryband…”.While the three case study projects werecompleted in the late 1980s / early 1990s, their lessonsare enduring value in terms of application to today’sacquisition and project management decision making.For example, Earnshaw reveals the poor economics ofBlack Hawk assembly in Australia (unit assemblytime never got below 16,000 hrs – almost twice theUS figure). This highlights the questionable nature ofdeciding on Australian assembly of penny packets ofaircraft where skill levels will be quickly lost ordegraded without real follow-on work (not simplymaintenance contracts).Billion Dollar Business is a work of great valueand sets a solid benchmark for the honest andobjective evaluation of projects. It is essential readingfor those who are serious about improving what isnow generally accepted as Defence’s lack lustreperformance in key aspects of major capitalacquisition and project management.