Realising Benefits of SPO Reform: Enterprise Performance Enhancement

Patrol Boat Systems Program Office IACCM Conference Captain Christopher Eggleton, RAN Director, Patrol Boat Systems Program Office 21 July 2019

PB SPO Enterprise is now realising the benefits of two years of SPO Reform. Guided by the MSD Strategy, we have enterprise performance. addressed risks and improved Where we were and our challenges Whatwe ve done andwhere we re going New ISSC and improved contract governance The Previous In-Service-Support Contract (ISSC) was ineffective Under the new ISSC, we are experiencing Materiel capability to meet Navy requirements was not being achieved an increase in availability Co-location of SPO and ISSC contributing to SPO and ISSC operating in dispersed locations improved bilateral communication and relationships Significant structural deficiencies in the ACPB hull requiring remediation Structural problems addressed and solution proven effective ACPB inventory was contractor-owned and managed, Commonwealth had poor visibility of supply system Inventory now Commonwealth-owned, contractor-managed, enabling better visibility Configuration baseline improved configuration audits of vessels complete Configuration baseline was not managed Cape Class accepted into service and included in Preparing for Cape-Class Patrol Boats (CCPB) PBSPO sustainment program High influx of change initiatives with no forecasting, visibility or single point of contact to manage integration Enterprise Organizational structure sub-optimal to govern under the new SPO Reform initiatives An integrated plan has enabled effective implementation of SPO Reform initiatives Optimising the Org structure as per SPO Reform and MSD priorities to achieve desired performance Filled critical leadership positions, which has Critical vacancies in the leadership provided clarity and increased staff morale Implementation of Enterprise Charter Not effectively governing at enterprise level showing signs of success among enterprise partners 2

1 3 2 Improved Performance Guidedbythe MSDStrategy Integrated SPOReformPlan SPO Reform initiatives guided by the strategic pillars and critical enablers of the MSD Strategy are addressing the major risks faced by PBSPO. Developing an integrated plan has enabled effective coordination and sequencing of initiatives, reducing complexity and ensuring our people have the capacity and support to deliver SPO Reform. The Enterprise Charter has provided benchmark behaviours and we are already seeing significant improvement in PBSPO and Industry performance. 3

GuidedbytheMSDStrategy SPO Reform initiatives guided by the strategic pillars and critical enablers of theMSD Strategy are addressingthe majorrisksfaced by PBSPO. 1 STRATEGIC PILLARS CRITICAL ENABLERS Implementation off Contract Governance Model and enterprise charter bringing enterprise together GOVERN AT ENTERPRISE LEVEL RIGHT PEOPLE New ISSC, enterprise charter, and improved contract governance enabled common appreciation of goals Appointment of new management Team has transformed intra Defence and inter ISSC relationships Configuration baseline improving with better understanding of scope of work Appropriate ISSC Team to win, establish, and prosecute the contract has been key ACPB Hull remediation completed. Boats providing greater availability and reliability LIFECYCLE ASSET MANAGEMENT Inventory now Commonwealth-owned, contractor-managed, enabling better visibility SYSTEMS FIT FOR PURPOSE Cape Class accepted into service and under SPO management Investment by ISSC in successful systems in other enterprises has proven beneficial MAXIMUM Utilisation of corporate PHS&T systems and cross platform support contracts reducing costs STANDARDISATION OPTIMISED BY CLASS SIMPLICITY LONG-TERM RELATIONSHIPS WITH INDUSTRY Improved Contract length allows greater investment in relationships Enterprise Charter has developed rules about how we interact with each other over the life of the contract An integrated plan has enabled effective implementation of SPO Reform initiatives MAXIMUM Co-location of SPO and ISSC contributing to improved bilateral communication and relationships CLASS LEVEL CO-LOCATION 4

Integrated Implementation Developing an integrated plan has enabled effective coordination and sequencing of initiatives, reducingcomplexityand ensuringour peoplehavethe capacityand support to deliver SPO Reform. 2 5

Improved Performance Although there is more to be done, we are already seeing significant improvement in PBSPO and Industry performances. 3 Four primarydriversof improved performance: 1. New executive team 2. New ISSC 3. Co-location with Industry 4. Improved contract governance Scorecard Results: PBSPO PERFORMANCE INDUSTRY PERFORMANCE 30 31 32 33 34 35 30 31 32 33 34 35 Schedule Cost Drivers Requirements Management Cost Technical Performance Contract Schedule Relationships Contract management Relationship (Sub/Prime) Round Schedule Relationship (Defence/Contractor) Unsat Showing Improvement Unsat Showing Improvement Marginal Marginal As Expected As Expected Very Good Very Good 6

WhatsNext? PBSPO has identified three priorities to ensure maximum benefits are realised through SPO Reform initiatives. We are seeking your endorsement of these priorities. THE NEXT TWELVE MONTHS 1 2 3 Integrated Improved OneNavy Implementation ContractGovernance LeadershipTeam Continue to apply an integrated approach to SPO Reform implementation. Move to a more tightly integrated Navy Group and SPO, through the Enterprise Charter Further improve PBSPO s contract governance maturity through continued investment in team capability. Focusing on these priorities will enable PBSPO to better understand our CASG Reform support needs and deliver Navy a sustainable, seaworthy Patrol Boat Capability. 7