CAPABILITY LIFE CYCLE MANUAL (Version 2.1) - DICA

1 OFFICIAL OFFICIAL CAPABILITY life CYCLE MANUAL ( version ) This MANUAL describes the policy Defence utilises to manage CAPABILITY development and delivery and is effective forthwith. The contents of this MANUAL should be understood by all personnel with responsibilities associated with CAPABILITY development and delivery. The previous CAPABILITY life CYCLE MANUAL version is hereby cancelled. David Johnston, AO, RAN Vice Admiral Vice Chief of the Defence Force Department of Defence CANBERRA ACT 2600 14 October 2020 OFFICIAL CAPABILITY life CYCLE MANUAL version OFFICIAL Commonwealth of Australia 2020 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Department of Defence. Requests and inquiries concerning reproduction and rights should be addressed to the Investment Portfolio Management Branch, Department of Defence.

2 All Defence information, whether classified or not, is protected from unauthorised disclosure under the Crimes Act 1914 and Privacy Act 1988, and may only be released in accordance with the Defence Security Principles Framework. Sponsor: The Vice Chief of the Defence Force as the Joint Force Authority and Chair of the Investment Committee. Developer: Assistant Secretary Investment Portfolio (ASIP), Investment Portfolio Management Branch (IPMB) Policy Domain: Military Command Support - CAPABILITY life CYCLE Document Management: Proposals for amendments to this MANUAL can be requested via submission to the CAPABILITY life CYCLE Policy Working Group by emailing: The latest version of this MANUAL is available in Objective at folio BN12983667. The currency of this publication cannot be guaranteed if sourced from other locations. Definitions that apply to this MANUAL are listed at Annex A.

3 OFFICIAL CAPABILITY life CYCLE MANUAL version OFFICIAL Amendment number Amendment Effective date Updated JCNS approval process (paragraph ) Changed terminology. Technical Risk Assessment replaced by Technology Risk Assessment Asset Management Strategy replaced by Product Realisation and Management Strategy Consistent usage of Integrated Project/Product Manager Minor editorial amendments 14 October 2020 OFFICIAL CAPABILITY life CYCLE MANUAL iii version OFFICIAL CONTENTS Contents iii Figures vi Foreword vii Introduction vii Policy Statement vii Behaviours vii CAPABILITY Principles vii 1 Managing CAPABILITY 1 Key Concepts 1 Fundamental Inputs to CAPABILITY 2 CAPABILITY Program Architecture 2 CAPABILITY life CYCLE 3 The Relationship with Government 4 The CAPABILITY Governance Framework 6 Role of CAPABILITY Governance Framework 6 Committees 6 Decision-making Roles 7 Performance Monitoring and Reporting 8 Governance and Decision Documents 9 Contestability 9 Specific Issues

4 Affecting the CAPABILITY life CYCLE 10 Financial Considerations and Clearances 10 Workforce Considerations 11 Test and Evaluation 11 Security 12 Work Health and Safety 13 Systems Engineering 13 Information Management 13 14 Force Design, Interoperability and Investment Portfolio Management 14 Introduction 14 Force Design 14 Force Design Process 14 Defence CAPABILITY Assessment Program 15 Interoperability 17 Overview 17 Multi-layered approach to interoperability design 18 Force Level 18 Program level 18 Project level 18 Investment Portfolio Management 18 Overview 18 Integrated Investment Program 19 OFFICIAL CAPABILITY life CYCLE MANUAL iv version OFFICIAL Prioritisation of Defence Investment 19 Relationship with Government 20 Portfolio Reporting 20 Force Design, Interoperability and Investment Portfolio Management Key Roles 21 27 Domain and CAPABILITY Program Management 27 Introduction 27 CAPABILITY Program Architecture 27 Domains 27 CAPABILITY Programs 28 Multi-Domain Programs 29 Domain and CAPABILITY Program Management 31 Program Coordination 31 Program Strategy 31 Multi-Domain Program Strategy 32 Governance Agreements between the CAPABILITY Manager organisation and the Delivery Groups 32 Program Management Functions 32 Interoperability 32 Program Level Key Roles 33 Overview 33 Decision-Making Forums 34 Joint Force Authority 34 Domain Lead 34 CAPABILITY Manager 35 Program Sponsor 36 Program Delivery Manager 37 Multi-Domain Program (MDP)

5 Lead 37 Contestability 38 39 Project Initiation 39 Introduction 39 Project Initiation 39 Overview 39 CAPABILITY Program Directive 40 Joint CAPABILITY Needs Statement 40 Project Execution Strategy 40 Gate 0 Business Case 41 Budgeting 44 Considerations in Recommending an Approval Pathway 44 Establishment of the Integrated Project Management Team 46 Project Initiation Key Roles 50 52 Risk Mitigation and Requirement Setting 52 OFFICIAL CAPABILITY life CYCLE MANUAL v version OFFICIAL Introduction 52 Risk Mitigation and Requirement Setting Phase 52 Overview 52 Government Approval 52 First Pass / Gate 1 54 Overview 54 Gate 1 Activities 54 Gate 1 Proposal 55 Gate 1 Decision 56 Gate 1 Outcome First Pass approval by Government 56 Second Pass / Gate 2 57 Overview 57 Gate 2 Activities 57 Gate 2 Proposal 59 Gate 2 Decision 60 Gate 2 Outcome Second Pass Decision by Government 61 Risk Mitigation and Requirement Setting Phase Key Roles 61 64 Acquisition 64 Introduction 64 Acquisition Phase 64 Overview 64 Planning 64 Project Execution 64 Introduction into Service 65 Project Variations 66 Financial Management 66 Acquisition Phase Key Roles 67 69 In-Service and Disposal 69 Introduction 69 In-Service and Disposal Phase 69 Overview 69 Planning 69 Introduction into Service 70 Management and Sustainment in Service 70 Optimisation of CAPABILITY 70 Disposal 71 Financial and Workforce Management 71 Performance Measurement 71 In-Service and Disposal Phase - Key Roles 72 75 Preparedness and Mobilisation 75 Placeholder 75 OFFICIAL CAPABILITY life CYCLE MANUAL vi version OFFICIAL Annexes.

6 Annex A CAPABILITY life CYCLE Definitions A - 1 Annex B CAPABILITY Management Roles and Responsibilities B - 1 TABLE OF FIGURES Figure Domain and CAPABILITY Program Architecture Error! Bookmark not defined. Figure Phases of the CAPABILITY life CYCLE 4 Figure Relationship between Government and Defence 6 Figure High Level Accountabilities 7 Figure Force Design logic 15 Figure Four Year DCAP CYCLE 15 Figure The Defence CAPABILITY Assessment Program process 16 Figure Prioritisation of the Defence Portfolio 20 Figure Continuum of Program, Product and Projects 29 Figure CAPABILITY Accountability Model showing Sponsor relationship with Delivery or Enabler Group (Program Management View) 34 Figure The CAPABILITY Needs Identification Process 39 Figure The Smart Buyer Framework 41 Figure CAPABILITY Accountability Model showing Sponsor relationship with Delivery or Enabler Group (Delivery View)

7 47 Figure CAPABILITY Accountability Model showing Sponsor relationship with Delivery or Enabler Group (Sustainment View) 73 OFFICIAL CAPABILITY life CYCLE MANUAL vii version OFFICIAL FOREWORD Introduction This MANUAL forms part of the Defence CAPABILITY Policy Framework as the Tier 2 guidance document. It is subordinate to, and should be read in conjunction with, the Defence CAPABILITY Policy (the Tier 1 document). More detailed guidance will be found in the Tier 3 documents. This MANUAL should also be read in conjunction with other Defence policies developed in accordance with the Administrative Policy Framework. The guidance contained in this MANUAL and related documents can also be found in the CAPABILITY life CYCLE Modelpedia. Policy Statement Defence will implement an integrated CAPABILITY system that provides Government with a Joint Force aligned with strategic guidance and Government policy.

8 The Joint Force will comprise capabilities derived from well-developed options to address strategic priorities. The integrated CAPABILITY system will be delivered within available resources, and possess flexibility to adjust to meet emerging challenges. In developing CAPABILITY , Defence considers how different capabilities can best support each other, how the Fundamental Inputs to CAPABILITY (FIC) can be best combined to generate the desired effects, and how opportunities for industry, specifically Australian industry, may be maximised. Behaviours Individuals are to be held accountable for demonstrating commitment to and application of the One Defence Leadership behaviours. CAPABILITY outcomes are dependent on collaborative relationships, based on trust and transparency. Personnel acting within the system are to exhibit a sense of partnership, cooperation, and intellectual honesty focussed on government decisions.

9 CAPABILITY Principles The procedures described in the Defence CAPABILITY Policy Framework are based on a set of principles that seek to ensure Defence has the right capabilities, delivered efficiently and effectively. Staff involved in CAPABILITY issues should use these principles when they are interpreting the Framework documents (including this MANUAL ). Work on CAPABILITY requires staff to use their imagination and skills to craft solutions that achieve the best outcomes from Defence, even where this means going beyond the procedures described here. The principles will assist in determining where initiative is needed. 1. Strategy led, evidence based, decision-making. CAPABILITY requirements are aligned with strategy, policy and resources. The 2016 Defence White Paper, the Defence Planning Guidance, the Defence Industry Policy Statement (2016), Export Strategy (2018), Defence Industrial CAPABILITY Plan (2018), Defence Policy for Industry Participation (2019), Defence Strategic Update (2020) and other strategic policy documents provide Government strategic direction and priorities.

10 CAPABILITY decisions are traceable to these priorities. OFFICIAL CAPABILITY life CYCLE MANUAL viii version OFFICIAL a. Expected outcome: CAPABILITY proposals presented to Government align with Government-directed strategy. Government is well informed when making trade-off decisions. 2. An arms-length contestability function to improve quality of decision-making. Arms-length contestability and a culture of strong consultation underpin CAPABILITY decision-making. Proposals include analysis to allow decision-makers to understand the options presented, the proposed trade-offs between strategic priorities (including industry priorities), CAPABILITY and resources and associated risks to lead to the right advice to Government and the right decision at the right time. a. Expected outcome: CAPABILITY proposals presented to government are robust and enable the right decision at the right time.