casg cost principles

Aerospace Surveillance and Response Branch, Rotary, Aerospace and Surveillance Systems Division, Air and Space Surveillance Control Branch, Navy Aviation, Aircrew Training and Commons, Navy Army Aviation Acquisition Program Office, Intelligence, Surveillance, Reconnaissance and Electronic Warfare (ISREW) Branch, Joint Command, Control, Communications and Computer Systems (JC4S) Branch, Land Command, Control, Communications and Computer Systems (LC4S) Branch, Commercial and Financial Analysis Directorate (CFA), Commercial Policy and Practice Directorate (CPP), Ergas, Henry. How to Use the Commonwealth Procurement Rules Division 1 - Rules for all Procurements 4. Accounting standards IAS 18 require a company to recognize revenue only when the amount is measurable and cash flows are probable. The Review proposed the immediate implementation of productivity measures at a project level: It is also incumbent upon the organisation to have a process in place that effectively measures its cost, schedule and productivity at a project level. 88Previously, the relevant expenses would have been allocated across several categories, including repair and overhaul, and inventory supplies. High levels of unplanned maintenance will affect Sustainment Efficiency through uncontrolled cost of repairs and a probable increase in Cannibalisations. The Review team thought the answer to that was No.60. 21In April 2015, the ANAO completed a performance audit of Materiel Sustainment Agreements (ANAO Report No.30 201415, Materiel Sustainment Agreements). 4.6The Strategic Reform Program comprised 15 separate streams of reform, several of which were intended to reduce costs.106 Overall, Defence expected the program to yield $20.6billion, to be reallocated within Defence over the following decade, with Smart Sustainment contributing $5.5billion of that figure.107 This would make sustainment savings the largest single source of funds under the Strategic Reform Program. %PDF-1.4 % The Defence Science and Technology Groups Aerospace Division had concluded that a systematic and top-down approach such as enterprise-wide asset management was particularly suitable to address the challenges of reforming sustainment management in Capability and Sustainment Group. 4.13In contrast to the advice to ministers, in September2012, an internal progress report on the action items from the 2011 health check showed that Smart Sustainment was still struggling to gain traction. Due to the nature of the Key Health Indicator, it seeks to measure disruption post External Maintenance Period and consequential impact on Materiel Ready Days (Materiel Availability outcome). Smart Sustainment was showing significant stress. 199In its 200809 Annual Report, Defence stated that to implement this recommendation, it had created the Sustainment Reinvestment Office to co-ordinate DMOs role in achieving the $5.5 billion in savings expected from Smart Sustainment under the Strategic Reform Program. Accuracy is an output measure, which directly reflects achievement towards the Materiel Confidence outcome. In July 2005, DMO became a Prescribed Agency under Australian Financial Management and Accountability legislation, meaning that although it remains a part of the Department of Defence, it was separately accountable to the Minister of Defence for its budget and performance. Miss Chloe Kempster A/Director of Project Controls - Program Management Function Capability Acquisition and Sustainment Group (CASG) PGCS August 2019 Introduction What we will cover today: 1. The red traffic light for FMR is due to the late achievement against the MAA milestone. 1. Such cost reductions may be required to re-invest into inventory, obsolescence remedies, new infrastructure to manage an ageing fleet and the transition to future submarines. 3.7A joint review of Navys performance framework, completed in March2016 by Navy and Capability Acquisition and Sustainment Group, concluded that there was universal acceptance that the framework provides a sound basis for the assessment of sustainment outcomes.38 However, the review decided to remove one of Navys core key performance indicators (cost per materiel-ready day achieved) on the basis that the measure required the Systems Program Office to enter four separate data elements and stakeholder compliance was reportedly low. Source: Defence, 2008 Audit of the Defence Budget, 2009, pp. In June2017, Defence advised the ANAO that implementation plans for significant reforms to Systems Program Offices would be developed in the second half of 2017. [3], The DMO budget in 201213 was A$9billion, shared between purchasing new equipment and sustainment and through-life support (maintenance, upgrades, fuels, explosive ordnance and spares). The ANAO has made a recommendation aimed at evaluation of the reforms now underway. The fundamentals of Defences governance and organisational framework for the management of materiel sustainment are fit-for-purpose. 3.48On the inclusion of staff costs in the new Product Delivery Agreements, Defence informed the ANAO in March2017 that The PDA remains under development, and it is inappropriate to speculate in any detail on how anticipated elements of the document will be used. This expanded on various models of contract, including Management & Operations (M&O) contracts, as vehicles for enterprise transformation and offered suggestions as to how Capability Acquisition and Sustainment Group might approach the following 18months of reform.129 The paper set out a range of options for organisational transformation. Note a:Navy Allowance (NAVALLOW) is the Navy logistics system. 123Defence, First Principles Review, p. 10. 5.3Otherwise, the report does not discuss sustainment as a topic separate from the acquisition stage of the equipment lifecycle. From 1July2005 until the DMO was delisted on 30June2015, Defence reported its sustainment expenditure estimates in its Portfolio Budget Statements (and Portfolio Additional Estimates Statements). 73 0 obj<>stream 130139, available from [accessed 10 May 2017]. Defence has done earlier work relevant to the assessment of its productivity. Demand Satisfaction Rate measures the effectiveness of the supply chain. 197The 2012 Coles Review characterised the recommendations from 2012 report as Strategic, Management or Operational recommendations. In May2016, a sustainment gate review identified the cost of sustainment as a key risk for this program. [19], Capability Acquisition and Sustainment Group, Last edited on 19 February 2023, at 03:28, "First Principles Review: Creating One Defence", "Department of Defence Annual Report 202-21 | Performance Criteria | Criterion 10 | Manage the investment, acquisition and sustainment of Defence equipment, supplies and services to meet Government and Defence requirements", "DMO appoints industry supremo to drive reform", "Going to the Next Level The Report of the Defence Procurement and Sustainment Review", "Address to the Department of Defence Senior Leadership Group", "Fact Sheet: Smaller Government: Defence Materiel Organisation: Reintegration into the Department of Defence", "Defence extracts new deputy secretary from industry", Mortimer Review into Defence Procurement and Sustainment, https://en.wikipedia.org/w/index.php?title=Capability_Acquisition_and_Sustainment_Group&oldid=1140236078, Military Equipment Acquisition and Sustainment, inadequate project management resources in the. However, it does set two years as a timeframe for delivery of the changes it recommends.127 In setting that objective it allows for a tail of activity that might run beyond two years for which it gives, as an example, completing the roll-out of its new smart buyer model. Reporting and compliance was devoted to soft governance rather than to hard asset management decisions, based on sound financials, across the whole capability lifecycle. First, the effective management of risks to national security which can arise with the exposure of details of the readiness and availability of Defence capability. The tests are as follows: These four tests apply regardless of whether the particular category of costs is one specified in the cost principles The government-wide principles, issued by OMB (or, in the case of commercial organizations, the Federal Acquisition Regulation [48 CFR 21], or, in the case of hospitals, 45 CFR 75, Appendix IX, "Principles For Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals"), on allowability and unallowability of costs under federally sponsored agreements. 5.41The proposal to establish Centres of Expertise is reminiscent of the business improvement teams envisaged under the Sustainment Business Model project (Appendix 6), and a further similar proposal to establish a centre of procurement excellence recommended in 2000.157 The novel element is the adoption of a matrix management arrangement for the control and deployment of a range of areas of expertise. In 201516, Defence spent $6.3billion21percent of its total departmental expenditureon the sustainment of specialist military equipment. As discussed, a quality assurance process for the Quarterly Performance Report would provide a firmer basis for internal and external scrutiny of sustainment reporting. 4.8The harvesting and reallocation of the $20.6billion from Defences Strategic Reform Program are not apparent in Defences Portfolio Budget Statements and Annual Reports. 119Australian Strategic Policy Institute, Graphs of the week: finally getting the Collins class we paid for, 27 October 2016 available from [accessed 28 April 2017]. 29. 3.22In 2009 Defence commenced gate reviews for capital acquisition projects as an internal assurance process.55 They have provided insight into a projects progress and an opportunity for project staff to discuss difficult issues with senior management and seek guidance. Defence has also been developing its approach to asset management over many years, having obtained substantial advice from internal and external sources to adopt a Defence-wide asset management strategy to underpin a sustainment business mode for specialist military equipment. Defences broader sustainment program also includes the maintenance and support of corporate information technology and estate and infrastructure assets. Defence had multiple repositories and versions of asset management information making it hard to assess whether Defence was aligned to best practice.

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