^[1]There’s a lot in the First Principles Review ^[2] (FPR) of Defence that was released today. We’ll have more to say about it over the next week or two, but here’s a first look. While there’s a lot of meat in terms of organisational reforms in the headquarters, my focus naturally fell to the capability development and project management aspects of the review. There are some big changes there—some with a ‘back to the future’ feel, but also some new ideas.

In particular, I was especially interested in what the Review had to say about contestability, a subject dear to my heart. As I wrote a few years ago ^[3], I don’t think the Services are well equipped to produce capability proposals that take into account constrained resources, industry capacity and technological maturity. That’s why we ended up with a Defence Capability Plan that bore little resemblance to fiscal reality ^[4].

That’s not to say that the Services have no role to play in capability development—they’re remarkably good at their core business of providing military capability and because of that they need to be involved in the capability development process. But their institutional drivers are such that they’ll tend to shoot high where requirements are concerned, sometimes to the detriment of deliverability and often with high opportunity cost to other ADF capabilities. That’s at the core of my previous arguments that Capability Development Group shouldn’t be in military hands ^[5], and that the contestability mechanisms should be organisationally separate.

The FPR team were evidently convinced of that as well. The Review has recommended the abolition of the Capability Development Group (CDG), with its functions to be transferred to other areas of the Department. Critically, the Services will be responsible for identifying capability requirements, but not for the costing or contestability functions. While CDG had a military head and an internal costing division, those roles will now fall to the civilian Deputy Secretary for Policy and Intelligence and the Chief Financial Officer respectively.

To those of you who came in late this probably looks like a bold new development. For anyone who’s been around a few years, this looks more than a little like the old Force Development and Analysis (FDA) division, which answered to the former Deputy Secretary for Strategy and Intelligence.

Dusting off that approach isn’t a bad thing, though there’ll be no shortage of people lining up to say that it is. There’s no doubt that there was a lot of tension between the military and civilian capability developers in the past. The relationship between FDA and the Services was pretty dire in its final days in the second half of the 90s, and FDA was unofficially dubbed the Forces of Darkness and Anarchy (or Annihilation or Acrimony, depending who you spoke to).

There were good reasons and bad reasons for the acrimony. Tension in the system was good in the sense of it signifying that FDA was doing its job in contesting the often dearly-held views of the Services—exactly what it was set up to do. FDA was the product of the Tange reforms that produced the Department of Defence as we know and love it today. Tange deliberately designed what he dubbed ‘creative tension’ into the capability development process. When strongly held views that reflect a robust Service culture are second guessed by an ‘outgroup’, hard feelings are inevitably the result.

But some of the ill-will between the groups was unnecessary and avoidable. Contestability sometimes seemed to be more for its own sake than because it was really adding value to capability deliberations. And FDA didn’t always give professional military opinions enough weight. Then we have to add to that the inevitable communication problems in large organisations and the bureaucratic overheads imposed on both sides by the process-heavy framework they had to operate in. The result was often two sides getting to the committee table without sufficient respect for each other’s position. In fact, one of the problems was that FDA sometimes seemed determined to take a position, which I don’t think was necessary or helpful in most cases.

Next week I’ll follow up this first look with some thoughts on how these problems might be minimised in future. But we shouldn’t expect everything to be rainbows and unicorns under the new old process. If the contestability mechanism is working, someone will be unhappy. But if it’s done right, the outcomes should be an improvement on recent history.