The ANAO has released a report into the Future Submarine program under Sea 1000, which will see the Commonwealth acquire 12 submarines to replace the Collins fleet over the coming decades.
The auditor justified the need for the report by arguing that the decision to engage a ‘strategic partner’ for the program, France’s Naval Group, rather than buy an off-the-shelf submarine has ‘increased the risk of this acquisition’.
The ANAO found that whilst Defence had established formal arrangements that allow for ‘effective’ administration of the program, two design milestones were extended and that the program’s success is dependent on the ‘timely and cost-effective delivery’ of such milestones. There is currently a nine-month delay in the design phase.
Consequently, the ANAO argues, “Defence cannot demonstrate that its expenditure of $396 million on design of the Future Submarine has been fully effective in achieving the program’s two major design milestones to date.
“Defence expenditure on design represents some 47 per cent of all program expenditure to 30 September 2019.”
The delay means there will be a three year gap in Navy’s submarine capability, with Defence planning for a Collins life-of-type extension ‘at an early stage.’
The report notes that Defence has assessed the program to have a high level of risk and is implementing relevant mitigation strategies, such as the strategic partnership with Naval Group, that will prove crucial in the years ahead.
“Defence acknowledges the findings contained in the ANAO audit report, Future Submarines – Transition to Design,” Defence said in a statement.
“Importantly, the commencement of construction activities in Australia, and the delivery of the Future Submarines has not been delayed.”