With industry still unsure on how the competitive evaluation process will work in practical terms, the RUSI-hosted Sub Summit in Adelaide was a timely opportunity to bring together an interesting array of speakers on the process and options being put forward.
The morning of day one saw the politicians take the podium, with Defence Minister Kevin Andrews announcing plans for as to how Australian industry will be involved in the program.
“Significant work will be undertaken in Australia during the build phase. At a minimum, this includes combat system integration, design assurance and land-based testing. There will be significant opportunities arising from the support and maintenance of the submarine for decades. In dollar terms, this often accounts for two-thirds of the investment.
“I want to make it clear – that maintenance can occur in Australia, even if there is an overseas build. The important consideration, and a lesson from Collins, is to ensure that maintenance and knowledge transfer are planned from the early stages of design.”
And there was also the announcement of the formation of an exerpt advisory panel
“As part of the Government’s commitment to a robust and transparent competitive evaluation, we will soon be announcing the appointments to an Expert Advisory Panel to oversee the competitive evaluation process,” Minister Andrews told the audience.
“This panel will oversee the conduct of the process, including ensuring its probity, managing any conflicts of interest, and ensuring that confidentiality is maintained in relation to all sensitive information received during the process.”
This make up of this panel had yet to be announced at the time ADM went to press.
Opposition leader Bill Shorten offered a different solution to that of the government that would have included Sweden but failed to point out that it would not meet the timeline currently put forward by the competitive evaluation process and would not be able to be implemented post next election. The opposition since the summit has promised to stand by the outcome of the competitive evaluation process.
Perhaps one of the more interesting presentations of the day was that of acting DMO CEO Harry Dunstall on the practical aspects of the competitive evaluation process. Bringing together elements from a number of speeches from the last few months, it was heartening to hear the full details of the program and what it means for each of the players.
Dunstall confirmed that both TKMS of Germany and DCNS of France were dealing directly with the DMO on information gathering. The Australian government was dealing directly with the Japanese government on the Soryu.
“While the nature of the Commonwealth’s engagement with all three participants will not necessarily be the same, the information provided by each Participant will be evaluated under a common evaluation framework against common criteria,” Dunstall said, likening the process to dealing with FMS and the US. The US Government will not respond to a standard Defence request for tender for products offered as FMS. Therefore, it is sometimes necessary to conduct a competitive evaluation using an FMS offer compared to other options the information for which may be sourced through different means.
Information is being sought on the following areas:
• Capability – A pre-concept design that:
o meets Australia’s key submarine requirements and integrates the US/Australian co-developed tactical data handling, weapon control and heavyweight torpedo systems into the design
o meets Australia’s legislative and safety requirements and makes provision for the integration of new technology into the design
• Cost – Acquisition and life cycle ROM costs for the three build options
o Acquisition costs for design and build
o Life cycle cost estimates will be derived from expected labour hours, supplier and material costs
o Australian Industry Involvement costs
• Schedule – a ROM design and build schedule for the three build options
• Program Implementation – Plans to demonstrate how the program will execute the program and work with Australia in the long term
o Project Management Plans
o Engineering Management – how the design process will be managed, how the design is certified, how design for support principles will be implemented, how Australian sensitive technology will be included and how design data and knowledge will be transferred and managed.
o Facilities – facilities required for the design, build, support and testing of the proposed submarine
o Sustainment – Usage and Upkeep Cycles and establishment of sovereign sustainment capability
o Crewing and Training – how habitability requirements and mixed gender crews are supported and proposed training concept
o Government to Government arrangements – the level and nature of partner’s home Government commitment and proposed arrangements to support successful implementation of the program.
• Access to technology and other key commercials – learning lessons from Collins, we need participants to advise what access to and use of technology will be available to Australia and importantly Australian industry.
• Australian Industry Involvement – how Australian industry will be involved in the build and in the supply chain – irrespective of build option.
• Risk Management - assessment of the risks of the program, who they should be managed by and how.
Speaking on behalf of Chief of Navy RADM Greg Sammut spoke on the strategic nature of submarine and the capabilities they need in order to fulfil their mission set. While nothing has changed about the geostrategic conditions that Australia faces it was interesting to hear a the Navy point out that a smaller boat with a smaller crew is no good on station if they’ve steamed vast distances and can only spend a small amount of time on station due to the constraints of the crew size rather than the technology.
Former ASC boss Steve Ludlam was a relaxed figure, presenting on the myths surrounding Collins and the lessoned that ASC and Australian industry have learnt. The enterprise approach instilled post-Coles has seen enormous gains made for all parties on Collins availability. When questioned on the fate of ASC he said while government had a stated preference for the sale of the business he would saw difficulties in separating the shipbuilding and submarine parts of the business should a sale come together in the near future.
Perhaps the most interesting panel of the event was that Simon Chelton, a UK and retired RN expat with extensive experience in Japan, defence academic Brice Pacey and Commodore Pat Tyrrell OBE RN that saw a the call for a statutory authority to manage the submarine process as the DMO in its current form would not be able to cope with the task. This was before the release of the First Principles Review, which saw the abolition of the organisation. The make up of the afore mentioned expert advisory panel was also raised, with the panel agreeing that the make up of the board would be an integral part of the process going forward.
Day two of the Sub Summit was proof of the organisers’ intention to present all possible points of view. The podium was shared by two retired Japanese Admirals, specialists on Asian affairs and Japanese culture, Australian industry representatives, submarine manufacturers, suppliers and political advisers.
Discussion centred around several major points, including the Federal Government’s competitive evaluation process being fundamentally flawed as a means of gaining the best capability versus cost for the future submarine, the firm belief that Australian industry could and should build the Collins class replacement, and consensus that industry itself needed to present a single voice to government if it was to influence what many see as a process that was reverse engineered from a predetermined outcome.
For many the highlight of day two was the first opportunity to hear directly from two former Japanese Maritime Self Defense Force admirals on what acquisition of the Soryu class submarine might mean for Australia in terms of build, industry participation and strategic position.
First to speak was Vice Admiral Masao Kobayashi, whose 36-year navy career included command of the Uzushio class submarine Takashio SS-571, and later command of the entire Japanese Fleet Submarine Force. VADM Kobayashi presented a history of Japanese submarine development, noting that Japan began building submarines in 1905 and had launched 230 by 1945. He said Japan has built 51 submarines since it regained the right to produce defensive weapons and is now building an average of one submarine per year. VADM Kobayashi surprised many by suggesting that the Soryu may in fact be capable of replacing the Collins. He said the publicly-quoted Soryu displacement was derived from a method which ignored crew, fuel, weapons and other elements, and that the actual displacement was higher.
He went on to describe Japanese submarine operations and particularly their regular close proximity with Russian and Chinese naval vessels in the Sea of Japan, which has helped hone the Japanese submarine fleet in to a practised and highly competent force.
VADM Kobayashi was later joined by Vice Admiral Yoji Koda, delayed through involvement with commissioning Japan’s latest and largest warship, the helicopter carrier Izumo, the previous day. Koda retired in 2008 as Commander In Chief of the Japanese Self Defence Fleet. A former surface warfare officer and destroyer captain, VADM Koda later served as Director General for Plans and Operations, and Director General of the Joint Staff. Since retiring from active duty he has advised the National Security Agency and has written extensively on maritime and strategic subjects.
VADM Koda spoke on the political and strategic issues surrounding a possible Soryu acquisition, confirming that while Japanese Prime Minister Shinzo Abe is in favour of a sale to Australia, he would face political opposition from others who believe sales of arms would negate Japan’s traditional pacifist stance and create new regional tensions. VADM Koda also believed Japanese industry would need to become familiar with the concept and mechanics of exporting a complex weapons system if Australia was to receive the level of support and ongoing development it would require.
Pleased at the opportunity for direct enquiry, Sub Summit delegates questioned the Japanese admirals on subjects from the efficiency of the Soryu’s Lithium Ion battery power source, to whether they perceived any major issues in building the Soryu in Australia (none, according to VADM Koda). When suppliers questioned how Australian small to medium enterprises could become involved in the Soryu program, VADM Koda suggested that it would be up to the Australian Government to decide which, if any, of the systems were sourced locally.
Japanese industry’s reluctance to export indigenous technology was also quoted as a possible source of friction, with an expert on Asian affairs later pointing out that although Shinzo Abe has actively supported a potential sale of the Japanese ShinMaywa US-2 amphibious long range maritime patrol aircraft to India for more than four years, the sale has not gone ahead.
Speaking as part of an expert panel, Retired Royal Australian Navy Commodore Paul Greenfield summed up industry’s view of the proposed competitive evaluation process. He offered that, locally built or not, Australia’s next submarine should be acquired through existing processes that encourage the best combination of capability and value for money, through competitive contract negotiation with at least two final bidders.
“They may not be built here, and we have to be prepared for that and maybe we accept that,” he said. “But at the end of the 10 months, I believe we should be down selecting, not to one, but to two for funded competitive project definition studies which will result in a concept design with sufficient detail to present fully costed fixed-price options to government at second pass.
“I am saying follow the proven method. It worked on Anzac and Collins and it should be able to work again. But don’t take shortcuts with Australia’s most strategic project ever; it’s too important for that.”
Greenfield also questioned the government’s exclusion of Sweden, and by proxy Saab, from the competitive evaluation, citing the company’s recent experience in heavy modifications to existing submarines, which involve the same essential skills as a new-build, and involvement in detailed studies for an evolved Collins design.
“They’ve been brought right up to spec with the latest standard or mod state for the Collins submarines,” he said. “They know all the Australian legislation because of it, they know the standards and specifications to use and they are at the point where the Commonwealth could easily put a contract amendment and take them forward to the concept stage.
“So they have already reached, for an evolved Collins, the place where the three contenders will be reaching in November, later this year. They are already there.”
The conference ended with consensus that the campaign for local build of Australia’s future submarine would depend on industry presenting a consistent, nationally focused message to the Australian government.
This article first appeared in Australian Defence Magazine VOL.23 No.5, May 2015