Volume 2, Chapter
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Chapter 2

Outcome Performance

An overview of the DMO's performance against its outcome and outputs including Top 30 projects by 2005–06 expenditure and projects and products of emerging interest.

Overview of the DMO's Outcome and Outputs

The DMO's outcome describes the results that the Government seeks from the DMO, and is achieved through the successful delivery of outputs, to the standards set in the Portfolio Budget Statements 2005–06 and, where applicable, revised in the Portfolio Additional Estimates Statements 2005–06. The Defence Annual Report 2005–06 reports our achievement against these targets, in both financial and non-financial terms.

The DMO's outcome is to ensure that Defence capabilities are supported through efficient and effective acquisition and through-life support of materiel. Two of the DMO's outputs reflect the DMO's role in capability acquisition and support and the third reflects the DMO's role in providing policy advice to the Government.

Output 1.1—Management of Capability Acquisition

Under this output, the DMO delivered specialist military equipment and associated equipment to Defence and supported the acquisition process, including all pre-approval activities for major and minor capital investments. All DMO Divisions contributed to this output. Expenditure under this output included the DMO's costs in delivering acquisition services. Output 1.1 represented 51.9 per cent of the DMO's expenses in 2005–06.

Output 1.2—Capability Sustainment

Under this output, the DMO delivered support for specialist military equipment and associated equipment to Defence. It included the maintenance of equipment and purchasing of inventory, such as explosive ordnance, fuel, stores and spare parts. All DMO Divisions contributed to this output. Output 1.2 represented 47.3 per cent of the DMO's expenses in 2005–06.

Output 1.3—Policy Advice and Management Services

Under this output, the DMO delivered procurement and industry policy and advice to both Defence and the Government. Corporate functions that would exist regardless of the scale or nature of the DMO's business are also covered by this output. This output represented less than one per cent of the DMO's expenses in 2005–06.

Appropriations and Other Resources

Outputs 1.1 and 1.2 were funded by payments from Defence for goods and services provided, as set out in Materiel Acquisition Agreements and Materiel Sustainment Agreements. These agreements were established between Defence and the DMO in 2005–06. Funding for these Outputs represents over 99 per cent of the DMO's funding requirements. Output 1.3 was funded largely through a direct appropriation. Table 2.1 shows the total revenue recognised from all origins for 2005–06, including appropriations.

Table 2.1 Total DMO Revenue Recognised 2005–06
  2005–06 2005–06 2005–06 Variation
  Budget Estimate
$'000		 Revised Estimate
$'000		 Actual Result
$'000 		$'000
REVENUE
Revenues from Government 44,211 44,257 44,257 -
Revenue from Defence 6,887,680 7,223,227 7,428,433 205,206
Funds from Foreign Governments – 125,910 76,585 –49,325
Own-Source Revenue 192,018 35,777 9,222 –26,555
Total Revenue 7,123,909 7,429,171 7,558,497 129,326
Other gains 1,500 1,500 42,383 40,883
Total gains 1,500 1,500 42,383 40,883
Purchase of Assets—Capital from Defence 121,197 122,043 - –122,043
Total DMO Resourcing 7,246,606 7,552,714 7,600,880 48,166

Chart 2.1 DMO Outcome and Output Groups—Actual Expenses (1) (2)

DMO OUTCOME AND OUTPUT GROUPS

Notes:

  1. Total Expenses by Output are as shown in the DMO Financial Statements, Note 19B – Major Classes of Departmental Revenue and Expenses by Output Group.
  2. Total Expenses includes $41.929m of Resources Received Free of Charge which has been attributed across the three outputs.

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