To understand this you need to include SAF and ST Engineering as well.

SAF is the one that lay down requirements. Maybe they say a shiny new toy other people have, and want it. Some scholar in there will write a justification paper.

DSTA is there because SAF pilots want to get their flying allowance and not waste time doing paperwork doing tenders and dealing with the cons. DSTA are the ones who deal with the main con.

ST Engineering is the grunt doing the low level engineering jobs. Anything more complex that following a instruction manual will be a challenge. Think job tasks such as calibration, component replacement for wear and tear, DSTA will sometimes work with main con to delegate some brainless tasks to them.

DSO is there to do the R+D which ST Engineering can't do. Usually they also partner up with other foreign partners as there is just no space in Singapore where you can test the big ones. But don't think they can do fantastic R+D like the Chinese 30 year jet engine development program to match the russia/US or the DF-ZF hypersonic glide vehicle. Just some low hanging fruit here and there.

Sometimes DSTA will also do some R+D, Even ST Engineering, but don't expect it to last long as it is to structually built to sustain such activities.