The new Capability Life Cycle has commenced

The new Capability Life Cycle
The new Capability Life Cycle

Transition to the new Capability Life Cycle (CLC) processes began on the 1st April 2016. The detailed design and the Interim CLC manual have been approved by the Secretary of Defence. The Investment Committee (IC) has met three times in as many months under the new arrangements and the flow of committee considerations to put new projects to Government has started. To achieve the 2016 Defence White Paper integrated investment program, this flow will continue apace.

Amongst the many improvements that the new CLC brings, several features stand out:
  • The IC is now the only capital investment decision forum in Defence. It considers all major projects (warfighting capability, estate and infrastructure and information communications technology and key enablers).
  • The work of the new Force Design Division will evolve to deliver a continuous Force Structure Review as part of an annual battle rhythm rather than wait for the historic five year cycle.
  • Gate 0 initiates each project, taking the initial work of the Force Design team and adding a short business case and proposed approval strategy that will halve the time required to go from project initiation to delivery of Final Operating Capability (FOC).
  • Project Execution Strategies and Integrated Project Management Plans will be highly flexible and risk-based – with the default choice being the simplest and fastest suitable strategy. Decision documents will be shorter and less numerous, with only sufficient information presented to support the consideration at the time. This new tailored and sufficient approach will be guided by the Smart Buyer decision making framework that is an integral part of the new CLC.
  • The standard approval strategy will be to go from Gate 0 to Gate 2 for non-complex projects, with ‘tailoring up’ to only occur in response to risk or strategic considerations.
  • Industry will be involved earlier in the life cycle, as will all providers of Fundamental Inputs to Capability (FIC). The processes for keeping the Minister informed about intended early engagement of industry are broadly set, with industry engagement expected to commence routinely before Gate 0 for most projects.
  • Projects are now scoped to be inclusive of all of FIC rather than materiel, infrastructure and/or IT-centric. The Integrated Project Team will be the delivery team for this integrated approach to achieving Initial Operating Capability (IOC) and FOC.
  • We will move to a program management approach for 40 capability programs, reducing the number of steering committees and exploiting opportunities through sophisticated program strategies that include shaping industry.
  • “Arms length contestability” is being implemented by the newly formed Contestability Division within Strategy, Policy and Intelligence Group, for each project and program considered by the IC.
  • Project Sponsors and Integrated Project Managers will act in partnership – one ultimate purpose, one bank account, one team.

Gate 0 replaces the less rigorous Project Initiation Review Board entry step, and is there to purposefully set a project up for success. The aim is to get to the next gate as fast as possible with sufficient information and resources to make the right decisions. This will ultimately lead to the delivery of future capability in the quickest realistic schedule within a tailored risk management regime.

Anyone waiting for a comprehensive set of templates and step by step instructions will be disappointed. Instead, capability developers need to be flexible and fast, with data tailored and just sufficient. This demands acumen and judgement to take advantage of the opportunities within the new approach, not templates and checkboxes. The next financial year will see an unprecedented planned number of Government considerations. Defence is working closely with central agencies (Prime Minister and Cabinet, Department of Finance and Treasury) to develop a way for this to happen. In the meantime, we are getting on with doing the business, not waiting for templates.

Of course, these plans and intentions require a change in behaviour from all involved. Priorities need to be decided in what is a tough environment. We must never repeat the older, slower ways of developing proposals, and instead draw on the expertise available from having industry participants partnering with Defence, right from the beginning.

Not since the Tange Review in 1973 has there been such a plan for fundamental change to Defence and unity of high level agreement about the need to improve and do things differently. Such a significant reform agenda makes it likely that some mistakes will be made as we bed down the new approach, but with new behaviours we should quickly learn and correct our course - making the new CLC a success.

Note: Defence staff can keep up with the latest CLC guidance documents on the Defence intranet.