Box 7: The current Defence definition of smart buyer. In 201516, Defence spent about $6.3billion21percent of its total departmental expenditureon sustainment of specialist military equipment. However, in 2013, a further report by external consultants stated that Defence needed an integrated, whole-of-life approach to sustainment and that Defence could realise significant benefits by modelling the management of their assets on the approach taken by commercial organisationsan asset management approach. The development of an effective sustainment monitoring system remains a work-in-progress, and the effectiveness of Defences internal reporting system for sustainment could be improved in several areas. The idea is to establish a managed resource pool that provides skilled personnel for CASG activities. The development and maintenance of the MSA framework had also encouraged and facilitated collaboration between Defence and the (then) DMO at both the management and operational levels (see paragraph 12). The absence of an asset management approach within Defence makes it difficult to piece together a holistic asset management view across the myriad individual policies which focused on discrete processes. 3.49In October2016, Defences Chief Finance Officer stated that, under current proposals, actual costs will be reported in Defences central financial management system and that system will be consistent with the total cost of ownership model. 46Defence, Decision BriefSustainment Performance Management System Development, 8 August 2011. Defence requires that the first sustainment gate review be held within 12months of the review held before final operational capability is reached.57 Thereafter, further such reviews are to be undertaken periodically (every one, two or three years) with the exact timing determined on a risk basis. 33Defence internal documents. Demand Satisfaction Rate measures the effectiveness of the supply chain. For example, Dr Davies211 noted that in his experience, having in-house expertise from public service engineers who could examine bids for work from external firms made him a much smarter buyer.212. In November 2016, the contract was amended and increased by $32 million. Contracts with the principal provider are not performance-based. The Tiger fleet achieved a total of 312.0 flying hours in June against a planned 698 hours. Recipients may use their own accounting systems, policies, and procedures to implement the cost principle 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. In February2016, the Deputy Secretary, Capability Acquisition and Sustainment Group, informed the First Principles Review Implementation Committee that the business framework project has commenced and been resourced to deliver a fundamental rebuild of all Group processes.159 The completion date was extended to 1July2016 and the objective was to have a High-level business framework approved.
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