Over the past 10 to 15 years, government, defence and the DMO have spent many dollars and man hours reforming the processes by which materiel for the ADF is acquired and sustained. The endless cycle of reviews (Kinnaird, Mortimer, Black, Coles et al) continues with the First Principals Review, which is due out next year alongside a raft of other important strategic documents including a new White Paper, Defence Capability Plan and Industry Policy.
At what point do we let the dust settle and have a look at what has been achieved? Or failed to achieve?
There have been more than a few large programs which have circumvented the two pass process altogether and have had announcements simply made by government. These include the purchase of the Joint Strike Fighter and C-27J in aviation plus self propelled guns under Land 17 and Abrams tanks in the land space.
The latest in the land space has been the announcement that the Domestic Munitions Manufacturing Agreements (DMMA) program has been cut short with the incumbent given a five year interim contract (see P6 for more). This was a program well into the two-pass approval process, with a down select announced to three teams. International and local bidders had teamed and had been working towards a competitive process for the better part of three years. After speaking to a range of the contenders involved in the program, all are disappointed at the outcome, barring the winner of course. The international partners in particular are wondering if doing business in Australia is worth it. Why spend millions of dollars bidding on programs under a complicated process that can be suspended at any time?
The announcement from the Minister at Mulwala made the point that the interim contract would secure local jobs. I understood that the DMMA process outlined that any compliant solution would have to be jobs neutral in regional Australia, or even expand the head count. The competition winner was hardly going to get rid of the experienced people that had been running Mulwala and Benalla. Essentially, the logo on their shirts would have changed along with management and processes.
And this is not the first time this situation has arisen when it comes to the defence procurement landscape, nor will it be the last.
The latest piece of political manoeuvring can been seen with Sea 1000. The integrated project team in DMO has been working steadily under the direction of governments for the past few years to bring together some incredibly complex technical information that relies not only on company but sovereign information. Until this year, no one had really questioned the price tag of the program; the $36 billion price tag put forward by ASPI some years ago was firmly lodged in the psyche of the community.
Recent reports that European submarine suppliers have submitted proposals for a dozen boats under $20 billion that are built in Australia as far back as 2009 have been largely ignored. The same can also be said of new proposals coming out of Europe that would see technology transfer to Australia with a local build or assembly program in South Australia, as per the wishes of successive governments. For example, the Swedish government has made no secret that they would be more than happy to enter into a strategic partnership with the Australian government on submarines.
The flavour of the month is the Japanese Soryu class submarine. The Soryu class submarines are diesel-electric submarines that entered service with the Japan Maritime Self Defense Force in 2009. Australia has had little access to the Soryu apart from a walk through by the minister who commented that it was ‘impressive’. Representatives from Japanese industry recently visited ASC and were able to ask questions, tour a Collins class in full and allegedly take as many pictures as they cared to. I understand that ASC weren’t thrilled at this. This could hardly be described as the beginning of an open and honest relationship on an even playing field between strategic partners.
Rumblings in Canberra that a deal will be announced with Japan under either the upcoming Free Trade Agreement or a trilateral agreement with the US are loud. But perhaps that is merely the echoing of the rumour mill in overdrive.
Should such a deal come together and be announced by the Prime Minister or the Defence Minister, there will be many disappointed in such a move. Repercussions of this decision are massive and far-reaching. While it may make short-term international political sense, the engineering and sustainment effects will be the issues engaging the DMO and Navy for generations, well beyond the three-year election cycle and the political careers of the incumbents.
Let me be clear: I don’t support the all singing, all dancing submarine outlined in the 2009 White Paper. I believe that outcome was impossible to achieve with a non-nuclear boat and today’s technology.
However, I believe that a competitive tender process with detailed technology and pricing under clear directives from government and Navy, in unison, would be a good place to start. This decision is far too important to be made on the basis of political expediency.