The man in charge of Defence procurement has resigned, as speculation grows that the organization he headed will have its independence dramatically curtailed by the Defence Minister, Stephen Smith.

Steve Gumley quit his role as chief executive of the Defence Materiel Organization yesterday after almost eight years as the man responsible for acquiring everything from pencils to Abrams tanks. His interim replacement is his deputy, Warren King.

Sources said Dr Gumley went voluntarily but that he was deeply unhappy about the expected reforms, which are likely to bring the organization back under the umbrella of the Defence Department. They also said he had a fraught relationship with the secretary of the department, Ian Watt.

”He probably didn’t want the crap that would come with the new arrangement,” a source said. Dr Gumley has presided over a tumultuous period at the DMO, with a series of equipment-related debacles and schedule blowouts drawing public criticism from Mr Smith.

Earlier this year, it was revealed that the Navy’s entire amphibious fleet was inoperable and that Defence has spent $40 million on small boats that do not fit onto its amphibious ships. Blame for the seemingly endless saga of the Collins Class submarines has also been laid at the organization’s door.

The Herald also revealed last year that there were serious problems with some equipment issued to troops and that the process through which they could complain was deficient.

However, experts said yesterday criticism of Dr Gumley and the DMO over problem projects was at least partly unfair and that he has implemented important reforms in the organization, particularly in introducing commercial-style rigour. There is a belief in the Department that in making the organisation more businesslike, Dr Gumley made it too remote from its sole customer, the Defence Force. As a result, critics say, a gap has arisen between what the Defence Force asks for and what it receives.

Andrew Davies of the Australian Strategic Policy Institute said that most of the problems stemmed from the sustainment of equipment that was purchased long before Dr Gumley took over the organization, such as the submarines and amphibious ships.

”DMO is a very thankless job and there will always be negative headlines. But, having said that, he certainly moved it in the direction of increased professionalism, has upskilled the staff in contract and project management, and the increased focus on off-the-shelf procurement has seen some really good outcomes,” Dr Davies said.