The value of contestability (and how to get it back)
24 Apr 2015| and


Andrew Davies: It’s been a few weeks since the release of the First Principles Review into Defence. Yesterday ASPI released its ‘review of the Review’, and it’s now time to think about what comes next—implementation is everything. After my earlier pieces on contestability, I had an interesting email exchange with Ross Babbage. Ross was with Force Development and Analysis Division (FDA) in its heyday and I was there for the rundown to its extinction. Ross’ thoughts are worth sharing with Strategist readers. We’ll start with his description of FDA in the 80s.

Ross Babbage: When I led the Force Development Branch of the FDA from 1984 to 1986 we were staffed by military and civilians, all carefully chosen for their analytical expertise. From memory, I had three senior military team leaders (Colonel equivalent) and a couple of very experienced civilians reporting directly to me. Some of the civilians were also ex-ADF and they were all very capable.

It was our job to ask tough questions and to establish whether there were more cost-effective options than were initially proposed by the project sponsors to meet the approved requirement. The final decisions in each case were, of course, taken by the senior Defence committees (all with strong ADF participation) and by the Minister. FDA civilians didn’t dictate outcomes on Service proposals. We always worked politely and normally cooperatively; I don’t ever recall a shouting match.

We often backed the sponsor proposal and reinforced it with our own analyses. That usually resulted in the proposal sailing through the relevant committees and then being approved promptly by either the Minister or Cabinet.

Sometimes we pressed the sponsor to consider alternative options. In the case of one fleet of non-combat aircraft, we recommended an alternative approach that fully met the specification at about 30% of the cost of the original proposal. With some slight tweaks, Air Force accepted that. I also recall a major naval project where we recommended an alternative that was developed using data and experience from the Royal Navy and Royal Fleet Auxiliary that fully met the spec and cost about 15% of the original. Unfortunately, that wasn’t accepted by the RAN, and they ended up paying a high price in misallocated money and personnel.

At the time, Defence had a reputation for developing well-researched proposals. Other departments raised occasional queries, as was their prerogative, but they knew we almost always had the answers because we’d done our homework. We saved Defence from some serious investment errors worth hundreds of millions of dollars.

Recently Defence has paid a huge price in reputation, money and inappropriate capability by not having an FDA. The Department contends with second guessing by branches in Finance, Treasury and PM&C that weren’t considered necessary in the FDA days. It was well worth having 12-16 highly skilled analytical staff working cooperatively with project sponsors to review the investment program, and doing away with it was dumb. Hence the recommendations of the First Principles Review.

Andrew: I’m sure Ross is right about the FDA in the 1980s, especially with the very robust Central Studies Establishment of the time. When I came along in 1994, things were still pretty solid. But the last couple of years, 1996–97, weren’t great. The Force Development Branch had filled up with generalists with little experience (though the few old hands around helped) and the capacity for supporting quantitative work was much lower. We staggered on as a Capability Analysis Branch until 1999, but the ability to provide robust contestability was greatly watered down. I fear that rebuilding anything like the FDA of its heyday is going to prove impossible, hence my recent piece about the need to pick targets carefully. And, while flattering, Ken Gleiman’s suggestion that ASPI might be able to fulfil the role won’t work. Internal contestability requires a team embedded in Defence and working as part of the day-to-day processes.

Ross:   I think it’d be possible to put something highly capable together. However, it couldn’t be done by relying solely on internal resources. It would need:

  • some of the best serving military and civilian analytical brains, perhaps some contributing part-time;
  • bringing in on contract some of the old hands still capable of this work and prepared to help kick-start the initiative;
  • engaging some high calibre personnel from the US and UK for the first few years; and,
  • a program of fostering and training a new generation in Defence to be skilled in this work and, for some, to make it the backbone of their careers.

We don’t need huge numbers of people to do this work. 15 high-quality full-time equivalent personnel could make a good fist of the old force development task. The supporting quantitative analysis task needs a different mix of skills, though I think that the core of this still exists in the Defence Science and Technology Organisation. I don’t see why it couldn’t be done again. I guess it would need a dose of entrepreneurial spirit that’s currently in short supply in Defence. Perhaps that’s what the authors of the First Principles Review have in mind.