Major defence projects continue to take far longer than planned, with the top 29 running a combined 957 months late - 147 months more than last year.
The latest Major Projects Report shows the slowest was the modernisation of defence high frequency communications, which ran 12 years and three months longer than planned.
That was followed by the project to upgrade the navy's guided missile frigates, which is approaching finalisation about 10 years late.
The report, prepared by the Australian National Audit Office (ANAO) and Defence Materiel Organisation (DMO), says all projects continued to operate within the total approved budget of $44.3 billion.
However, there were increases stemming from foreign exchange variations and changes in scope.
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"Maintaining major projects on schedule remains the most significant challenge for the DMO," the ANAO said.
DMO chief executive Warren King said schedule performance deteriorated by six per cent.
"Funding constraints in 2013-14 are likely to place further pressures on schedule performance," he said in the report.
On the plus side, DMO expects to receive full capability on all projects.
That's good news for the RAAF's Wedgetail airborne early-warning aircraft.
Concerns were expressed that its advanced and highly developmental radar would never deliver all its planned level of capability. DMO said all deficiencies should be addressed through remediation programs.
Mr King also revealed concerns about cost overruns and delays in the $8 billion project to construct three advanced air warfare destroyers for the navy.
That project exceeded its budget for the year by $106.4 million, pushing it to $725 million. That was attributed to industry participants exceeding the budget for labour, materials and sub-contracts.
DMO said there was sufficient budget to complete the project against the agreed scope.
It will commission an independent review to identify the problems and how they can be fixed.
