Chapter 2 - P rogramme 1 - Department of Defence

| Chapter 2 - Programme 1: Administration |
Annual Report FY 2007 - 2008
| Department of Defence |
Table 2.9 Acquisition Services’ Outputs for FY 2007/08 (continued)
Output Performance Measure Target Actual Achievement
Improve efficiency of the
technical management of
Intellectual Property (IP)
management
Matters Under Oversight
Implementation of IP
database
Corporate Budget Allocation: An amount of
R45,220 million was allocated to the Defence
Matériel Division (Def Mat Div), and R50,189
million had been paid by the end of the financial
year. An additional R3,070 million was approved
by the DPBEC held in August 2007, to staff the
critical posts in the Division. These funds have not
yet been allocated as staffing of proposed structures
will only commence once ministerial authority has
been obtained.
Special Defence Account: Under the global Special
Defence Account (Vote 20 of 2007 allocation, plus
rollover funds), an amount of R6,610 billion was
allocated to address Strategic Defence Package (SDP)
programme obligations, whilst an amount of R4,464
billion was allocated to the Def Mat Div for the
authorised acquisition of other Category 1 Matériel
requirements. Of the authorised SDP allocation an
amount of R3,096 billion was not paid, inclusive
of a rate of exchange contingency amounting to
R945 million under National Treasury control. As
in the case of SDP projects, general acquisitions
projects also underperformed in terms of scheduled
payments, with an amount of R1,117 billion not
being paid. Contractual non-performance by a host
of local as well as international main contractors is
the primary reason for this underexpenditure. Where
required, such underperformance was addressed
in terms of contractual recourse, including the
cessation of payment milestones and the levying of
penalties. Apart from a R27,6 million uncommitted
rollover on two projects, the full Category 1 Matériel
allocation was contractually committed.
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100% rollout Nil. Obligations regarding registration and
exploitation of inventions lie with research
institutions in terms of the national IP
framework, easing the IP management
responsibilities/accountability of the DOD.
IP policy differences between the DOD and
the DST will be addressed during 2008/09.
Full implementation by
March 2008
The deficient resources/capability in the
DOD to address IP management requires
further definition.
The DERI concept does not preclude
Defence IP management as an extension of
the DERI (Research Institute) obligations.
This will only be resolved after the
establishment of the DERI, in 2009/10.
Note: It must be noted that the Defence Matériel
Division can only report on the component of
the SDA for which it is accountable, with the four
Services and the Intelligence Division having to
account individually for their allocations under the
SDA.
Human Resources: The exodus of experienced
procurement officials at the Procurement Centres
impacts on unit operational efficiency. Staffing is
an ongoing exercise. More procurement courses
for DOD personnel should be initiated. The
Procurement Centres should cross-train their
members and, where possible, promote internally
when vacancies arise within the DOD.
Challenges
Landward Defence Capability
Targets in respect of project milestones achieved
and budget expenditure were not fully met mainly
due to non-performance of contractors in the
Defence Related Industries. Continual pressure is
exerted on the industries to provide invoicing for
work completed as well as to adhere to contractual
obligations especially with regards to timescales.
Air Defence Capability
•
•
Procurement Services: The target in respect
of project budget expenditure was not fully
met. Slow invoicing by industry on work carried
out has caused deviations. Continual pressure
is exerted on industry to provide invoicing for
work completed. The remainder of the funds
will be spent during FY 2008/09.
Strategic Defence Procurement: Slower than
usual aircraft deliveries on the A109 helicopter