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Subject: DMO orders cut to fleet costs
Volkodav    3/11/2008 3:56:14 AM
It is the final paragraphs that concern me, if there is already a serious skill shortage what on earth do they think denying companies the ability to pay competitive salaries to help recruit and retain the people they need going to do?

Australian Defence Magazine

28 Feb 2008

Addressing the Australian Defence Magazine Congress, DMO supremo Dr Stephen Gumley said Defence managers have been ordered to cut five per cent from the cost of operating all defence equipment, potentially generating millions of dollars in savings.

He said the organisation had undergone a protracted period of reform with efforts in 2008 to be directed at reducing the costs of defence equipment.

Dr Gumley said every project manager and director is to be asked to find a way to knock five per cent in real terms off the cost of the more than 100 fleets in the ADF but did acknowledge that some of this saving would come from how the DMO tasked and managed assets.

Echoing the call by Parliamentary Secretary Greg Combet for defence industry executives to restrain wage rises, he also warned companies not to award excessive wage increases and then pass on the increased contract costs to government.

?I have asked my people to examine in great detail any company that awards wage rises greater than average weekly earnings. There has to be a damned good reason to do that,? he said.


 
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SCisback       3/11/2008 5:48:02 AM
I'm nervous.
 
There's no good to come from being stingy.
 
 
 
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Volkodav       3/11/2008 5:59:09 AM
Considering the number of people we have already lost to the mining industry the last thing they should contemplate is indicating to the loyal ones who stay that they are not worth a CPI increase.  Maybe I will investiate the next time an agency calls to see if I'm ready for a change. 
 
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Aussiegunneragain       3/11/2008 6:34:00 AM
Does anybody else appreciate the delicious irony of a former ACTU President considering monstering companies to keep their wages down?
 
Anyway, Combet is a d1ckhead if he thinks the government can successfully micro-manage the companies it buys from. Public servants don't know anything about running a company, so we shouldn't be telling them what they can pay their people. That is why we have a competive tendering process. As long as the company delivers what we want at a price lower than that of its competitors, we shouldn't be butting our nose into how they run their show.
 
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gf0012-aust       3/11/2008 7:06:23 AM

As long as the company delivers what we want at a price lower than that of its competitors, we shouldn't be butting our nose into how they run their show.

apart from the fact that price is not the single biggest determinant on what gets selected.  It's not always the lowest price that wins.
the persistent mantra now is  the focus that's very much on warfighters requirements
 
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Aussiegunneragain       3/11/2008 7:30:09 AM



As long as the company delivers what we want at a price lower than that of its competitors, we shouldn't be butting our nose into how they run their show.


apart from the fact that price is not the single biggest determinant on what gets selected.  It's not always the lowest price that wins.

the persistent mantra now is  the focus that's very much on warfighters requirements


I said as long as they deliver what we want, which I believe that covers what you are getting at.
 
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Volkodav       3/11/2008 8:09:29 AM
the focus that's very much on warfighters requirements
 
One of the requirements is a very specific head count and very a specific level of competence for those looking after the gear the warfighters rely on.  If the DMO then turn around and say that market rates can not be paid to these very specific people some of them will decide that it might be better to take advantage of a better offer from a more competitive industry.
 
As more experienced, competent people move onto greener pastures the pressure on the remaining few increases until they too leave.  Eventually all you are left with are inexperienced new people, dead wood and a small cadre of committed individuals who are rapidly burning out.
 
End result, work doesn't get done or worse doesn't get done properly and the warfighters are left either without gear or with gear that doesn't work when they need it.
 
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