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Annual Report 2013-14

Volume 1, Part 2 : Performance

Program 1.12: Capability Development

The Chief Capability Development—Vice Admiral Peter Jones, AO, DSC, RAN (to 2 October 2014) and Lieutenant General John Caligari, AO, DSC (from 3 October 2014)—is responsible, as the sponsor, for developing capability proposals consistent with strategic priorities, funding guidance, legislation and policy for consideration and approval by the Government.

The Capability Development Group develops and manages the Government’s plans for future defence capability outlined in the Defence Capability Plan (DCP). The plan lists the projects for government consideration (first- and second-pass) that make up the Unapproved Major Capital Investment Program, which covers significant future capabilities.

The classified DCP is reviewed and updated regularly to take into account factors that emerge as capability proposals are developed. These include changing strategic priorities and economic circumstances, the maturity of projects, the evolution of technology in options under consideration, and operational experience.

The Group maintains close relationships with a range of stakeholders, including the Defence Materiel Organisation, capability managers and industry. In conjunction with industry, the Group is responsible for the operation of the Rapid Prototyping, Development and Evaluation Program, which encourages innovation in future defence capabilities. A new program (the Defence Innovation Realisation Fund) was established to facilitate the transition of innovation into capability, and the first funded activities were approved during 2013–14.

During 2013–14, the Capability Development Group achieved 26 approvals worth more than $19 billion. The approvals comprised seven first-pass, 10 second-pass and nine other types of approvals. The approved projects include some of the most strategically significant in the Defence Capability Plan.

In the maritime environment:

  • first-pass approval for SEA 1654 Phase 3—Maritime Operational Support Capability
  • initial pass for SEA 5000 Phase 1—Future Frigate and SEA 3036 Phase 1—Pacific Patrol Boat Replacement.

In the aerospace environment:

  • second-pass approval for a further 58 Joint Strike Fighter aircraft under AIR 6000 Phase 2A/B
  • approval for a program of maritime surveillance projects consisting of:
    • second-pass approval to acquire eight P-8A Poseidon maritime patrol aircraft
    • first-pass approval for up to four more P-8A aircraft
    • intermediate pass for the Triton high-altitude maritime surveillance unmanned aerial vehicle under AIR 7000 Phase 1B.

In the land environment:

  • first- and second-pass approval for the second tranche of the Army’s digitisation program under LAND 200
  • second-pass approval for the medium and medium-heavy component of the Army’s truck replacement program under LAND 121.

In the joint enabling environment:

  • second-pass approval for two space situation awareness capabilities (the Space Surveillance Radar and Space Surveillance Telescope under JP 3029 Phases 1 and 2 respectively).

Table 3.31: Program 1.12 deliverables



The provision of timely, accurate and high-quality advice on all aspects of capability development to the Secretary, Chief of the Defence Force (CDF) and the Government

Substantially met

The Government gave approval for a total of 26 project submissions in 2013–14. In addition, the Group provided a significant number of quality submissions to the ministers, the Secretary and the CDF. Accurate costings remain an issue.

The provision of independent analysis and contestability of capability proposals

Substantially met

All Defence Capability Plan project proposals are contested through the capability committee process; however, risk remains, as the contestability is subject to the skills and experience of the project analyst. Capability Development Group has also begun contesting Chief Information Officer Group ICT projects; several early projects have tested and improved the process.

The development and management of an affordable and executable DCP

Substantially met

The Government has agreed on a Forward Work Program of DCP projects to be considered before completion of the Defence White Paper.

The development of Defence capability investment proposals for consideration by the Government

Substantially met

Defence secured 26 out of 31 proposals from the Government totalling $19 billion.

The publication of a public version of the DCP and the associated Defence Capability Guide

Not applicable

The Government announced that the next public DCP will be released in the context of the Defence White Paper process.

The management of the Key Defence Assets Register (KDAR)

Substantially met

In April 2014, Defence completed a comprehensive review of the KDAR, updating the data in the register during that process. The next KDAR update is scheduled for February 2015. Defence also began work on transitioning the KDAR standard operating procedures into Capability Development Business Rules under the organisation’s revised policy framework. Defence plans to complete this transition in 2014–15.

The Defence Capability Development Handbook was updated in December 2012. It will be progressed to a Defence Manual during the course of 2013–14

Partially met

The handbook was updated in June 2014. Transition to a manual will continue in 2014–15.

Enhancing the effectiveness of the capability development process through the implementation of Capability Development Improvement Program initiatives


Under the Rapid Prototyping Development and Evaluation Program, work collaboratively with Australia’s defence industry to develop innovative solutions to complex issues affecting capability and operations


Deliver independent test and evaluation support, trials and demonstrations to Defence throughout the capability systems lifecycle

Substantially met

All requests for independent test and evaluation trials were met to a high standard. Most government submissions were underpinned with an early test plan. First-pass submissions now include risk-assessed preview test and evaluation. Governance oversight of test and evaluation plans in the acquisition phase (after second pass) has begun, and additional resources have been sought to provide this input to all project reviews. A centralised Defence-wide test and evaluation policy has been approved and readied for publication.

Table 3.32: Program 1.12 key performance indicators

Key performance indicator


Conduct an independent maturity assessment of portfolio management within the Capability Development Group


Ensure that capability investment proposals have realistic schedules and costs projections, and comprehensive risk assessments and mitigation


Improve the corporate information management systems that support end-to-end visibility, planning, management and reporting of capability development


Implement Capability Development Improvement Program initiatives to improve the timeliness and quality of capability submissions and reflect these improvements in current capability development guidance


Provide objective advice to the Secretary and CDF


Submit timely proposals that are coherent, compelling and consistent with strategic guidance and affordable within the DCP