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Subject: Iron colonels fight the invisible hand
Volkodav    2/28/2010 8:07:19 AM
Paul Dibb and Geoffrey Barker From: The Australian February 27, 2010 12:00AM With tens of billions of dollars at stake, Greg Combet is caught between the demands of civilian bureaucrats for competition at any price and military demands for US equipment regardless of cost or adequate alternatives FREE-MARKET competition for defence contracts has seemed the holy grail of defence industry policy as the federal government has moved to undertake a $100 billion-plus rearmament program over the next 30 years. "Competition is the nature of it," the chief executive of the Defence Materiel Organisation, Stephen Gumley said at last year's Defence and Industry Conference. "The competitive environment is very important to everybody in the system." But the Labor government, which is working on yet another defence industry policy statement, no longer seems to accept fully Gumley's view that free-market competition delivers the best outcomes in terms of value for money, risk minimisation, on-time delivery and technological innovation. Start of sidebar. Skip to end of sidebar. .End of sidebar. Return to start of sidebar. Addressing the recent Seapower Conference in Sydney, the Minister for Defence Personnel, Materiel and Science, Greg Combet, publicly rejected DMO's practice of opening to competition every major naval ship repair and maintenance job. "In my opinion this was not a good policy solution . . . by imposing competition at this level the commonwealth did not receive value for money and companies were not able to invest in their workforces, infrastructure and capital equipment," he said. Combet went on to announce that the government now planned to establish long-term, performance-based contracts for repair and maintenance in lieu of the present arrangements. It was of course ironic that under a Labor government DMO had embraced uncritically the virtues of free-market competition and rejected virtually any role for government-industry partnerships, especially since the defence industry policy released by the conservative Howard government in 2007 had declared: "Competition cannot and should not be employed at each and every opportunity . . . Sometimes it will be simply impractical to secure effective competition." Yet it would be misguided to attribute all defence procurement shortcomings to the rigidity of the DMO's pro-competition ideology. Some astute observers look instead towards the Defence Capability Development Group as also contributing towards procurement problems. The CDG, which advises the DMO, is run by uniformed personnel. Where Gumley appears wedded to a competitive approach, the so-called "iron colonels" within the CDG tend to default reflexively to a preference for foreign military sales (FMS) from the US, arguing that these ensure "interoperability". Moreover, the loyalty of uniformed officers in the CDG is to their service commanders who control their careers and promotions and who expect the officers to deliver the equipment that they want sometimes regardless of competition, cost and wider strategic and economic considerations. The CDG is resistant to allowing Australian producers to compete with US suppliers, even when there are lower Australian prices and entirely comparable local capabilities available. As the lead agency in procurement until the so-called second-pass stage of a final cabinet decision, the CDG has powerful influence on decisions and tends to support its decisions by asserting that they are "the military requirement", not to be questioned by the civilians in the DMO or even ministers. Some observers, while not questioning Gumley's commitment to competitive processes, believe he sometimes raises the virtues of competition to help the DMO break through the anti-competitive prejudices of the CDG's iron colonels and to appeal to other government agencies, such as the Department of Finance, which have input into procurement decisions. In efforts to check the iron colonels, the 2008 review of defence procurement and sustainment led by businessman David Mortimer proposed measures to get the DMO involved in procurement decisions at earlier stages of the process. Now the Rudd government is letting it be known that it believes the CDG should be headed by a suitably qualified civilian. But finding a suitable civilian is difficult, and outgoing CDG chief Vice-Admiral Matt Tripovich is being replaced by ir Vice-Marshal John Harvey. The trouble with DMO's competition-at-any-cost policy is that it is an ideological belief laden with theory imported from neoclassical economics. Reflecting its 18th-century laissez-faire origins, the theory asserts that optimum defence industry outcomes can be achieved only through the invisible hand of competitive market activity. But is that always and inevitably true for defence procurement? Is competition necessarily the best way to ensure optimum value for the $10 billion-plus at present bei
 
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Aussiegunneragain       3/1/2010 8:26:11 AM
Words of wisdom from the guy who penned the Defence of Australia doctrine, which justified Hawke's 25% funding cut to the ADF and the gutting of it's capabilities. I've got a mate who studied at post-graduate level under him at ANU and he reckons Dibb is basically an isolationist who doesn't want Australia to engage internationally at all. Same goes for Hugh White. This is why he will be banging on with this line against Defence emphasising interoperability with the US, against Gumley emphasising open competition and for preferential treatment of the Australian Defence Industry, he doesn't want us to interoperate with any foriegn partners at all.
 
What the stupid bastard doesn't ever seem to have worked out is that there is no way that Australian industry can ever meet even a fraction of the ADF's technological need, so we are dependent on others whether we like it or not. He also doesn't have a clue about economics, which would make him right at home as an advisor for this Government. The notion that competition and capability are mutually exclusive is just wrong. It is all about how you define your capability before running the competive process.
 
 
 
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Aussie Diggermark 2       3/2/2010 1:25:54 AM
Yah, that's what defence needs, another civilian Under-Secretary to put some REAL experience into the Capability Development Group.
 
Afterall, there's no way a professional military officer could have ANY clue about what piece of kit he needs to fight wars with. 
 
Only civilians can provide such expertise...
 
What planet does this fcukwhit live on?
 
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Volkodav       3/2/2010 4:40:42 AM
It depends on who the person is and who / what their boss is, not whether or not they wear a uniform or not.  I have personal experience working with some extremely talented people, ADF, ex-ADF, plus some who have never served and there is nothing to pick between them.  Some of the best have actually been retired senior NCO's, guys who would never be permitted to do the type of work they excel at if they were still in uniform, as only officers of particular rank are so employed.
 
As for the people still in uniform there have been a number of occasions where individuals, who agreed with what we were telling / showing them, were made to pull their heads in and tow the official line.  Some of these occasions have ended up costing the tax payer a lot of money, not to mention assets not out doing what they were bought to do.  Someone who wears a uniform can be compelled to act against their better judgment by a superior who doesn't share their point of view, has a personal axe to grind, or has themselves been told what their opinion should be.
 
The chain of command can be a real impediment to technical integrity.
 
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gf0012-aust       3/2/2010 4:51:31 AM


The chain of command can be a real impediment to technical integrity.


it can go the other way though.  very recently I was in a room when the attending WOFF countered a 1 star and corrected him in a room full of staff senior to his own position.
 
eg "Sir, that's not entirely correct.  yadda yadda yadda"
 
needed to be done and was quite ballsy  considering that the next junior rank was GPCAPT
 
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Aussiegunneragain       3/2/2010 6:08:49 AM





The chain of command can be a real impediment to technical integrity.




it can go the other way though.  very recently I was in a room when the attending WOFF countered a 1 star and corrected him in a room full of staff senior to his own position.

 eg "Sir, that's not entirely correct.  yadda yadda yadda"

 needed to be done and was quite ballsy  considering that the next junior rank was GPCAPT

I'd be guessing that that WOFF would have worked with that officer for some time beforehand and known that he or she could get away with it. The advice of Warrent Officers is extremely valued by any officer with half a brain so I doubt that it would have caused offence.
 
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Aussiegunneragain       3/2/2010 6:14:12 AM

The chain of command can be a real impediment to technical integrity.


And according to Dibb and Barker, economic integrity. That observation in the article is basically the only bit that I thought was remotely useful. I'm not doubting that the uniforms are likely to have the greatest degree of knowledge about the technical aspects of warfighting, but as the end users of the kit they are invariably going to weight towards the very best rather than balancing capability with other considerations. Employing a competant civilian official as the head of the CDG who is willing to listen to the advice and balance it up against cost/industry capability etc, etc might be just the thing.
 
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Volkodav       3/4/2010 5:29:56 AM
I think the thing with Warrant Officers is they are already at the pinnacle and so long as they are polite there is very little even a general / admiral / air marshal can do to them.  Middle ranked officers, on the other hand, still have a lot to lose should they cross the wrong senior sir.
 
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gf0012-aust       3/4/2010 7:51:21 AM

I'd be guessing that that WOFF would have worked with that officer for some time beforehand and known that he or she could get away with it.

nope.  first contact. :)
 
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Aussiegunneragain       3/4/2010 7:57:02 AM




I'd be guessing that that WOFF would have worked with that officer for some time beforehand and known that he or she could get away with it.




nope.  first contact. :)

Ok, probably what Volkodav said then ... isn't going anywhere further but knows his/her stuff and doesn't give a shite about saying what he or she things.
 
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gf0012-aust       3/4/2010 10:20:47 PM

I think the thing with Warrant Officers is they are already at the pinnacle and so long as they are polite there is very little even a general / admiral / air marshal can do to them.  Middle ranked officers, on the other hand, still have a lot to lose should they cross the wrong senior sir.
WOFFs are generally SME's - and usually are prepared to give frank and robust advice.  In my experience, they're "Rank "agnostic" when giving that advice.


 
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