Once again Budget papers provide more information about the state of the union than almost any other document released by the Department or government. With firm dollar figures, timelines and actual project numbers, the portfolio statements are the cornerstone of how we can hold both the government and department to account. Our full budget coverage starts on P26 this month.

Having said that, the policy framework brought out by the government since the 2016 trifecta of the White Paper, Defence Industry Policy Statement and Integrated Investment Program (IIP) is expanding. The National Shipbuilding Plan, Defence Export Strategy and now the Defence Industrial Capability Plan (see P10 for more on this) complement the suite of guiding documents. All that is missing now is the IIP website. After two years of solid questioning about when it will appear, the promised site is still under development apparently.

The official recognition of defence industry as a Fundamental Input to Capability is beginning to be felt at every level of the Defence community. Large programs now accept, on both sides, that an industry roadshow to get the lay of the land is standard practice. Engagement early and often throughout the new capability lifecycle is expected, if not demanded. It is the new normal.
News as this edition went to bed that Austal will have no part in the OPV build (but congratulations are in order for the roll out of the company’s first Guardian class boat for the Pacific Patrol Boat program last month) is a shame for the WA-based builder but hardly unexpected. There are no doubt sound reasons that Luerssen and Austal did not team together in the first place. In this case government did what it said it would do; it gathered everybody in a room to talk about the art of the possible in the support of goals outlined in the National Shipbuilding Program. The fact that a mutually satisfactory commercial arrangement could not be reached is through no fault of any of the players; the stars have aligned the way they did and the build will now progress.
Details of the 2015 AIC plan for the Future Submarine from DCNS, now Naval Group, have been released under Freedom of Information, though heavily redacted in places. The document speaks of nine Transfer of Technology (TOT) measures that Naval Group will be working towards. Unfortunately, what those nine measures look like are redacted, as is what the intellectual property flow will look like.

What can be seen however is that Naval Group sees the significant role of Centres of Excellence and Innovation Clusters across numerous areas as a key plank of their TOT/AIC program. The initial five centres proposed by the company are:

  • Hull Material and Welding
  • Hydrodynamics
  • Composite Materials
  • Energy Optimisation
  • Marine Growth Corrosion

One would argue that many of these elements are already in place in Australia under bodies like DMTC (see this month’s From the Source interview with DMTC CEO Dr Mark Hodge), various CRCs and work being done by DST Group in partnership with academia. The document also states that Naval Group intends to become part of the formal Global Supply Chain program with Defence. Once again, the redacted sections do not allow us to see what reporting mechanisms are in place to make sure that promises made turn into promises kept.

Amongst many other details, the Commonwealth and Naval Group are currently hammering out the finer details of the AIC elements in Strategic Partnership Agreement (SPA). ADM understands that this umbrella agreement should be signed off later this year, enabling further work on the design itself to progress both in France and Australia. Hopefully this agreement will include reporting measures on AIC elements.

Otherwise, we will all have to wait for the inevitable ANAO reports on the most complex mega program the nation has ever attempted. 

This article first appeared in the June 2018 edition of ADM.

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