^[1]Over the next couple of days, Australian and French think tank, industry and government officials will participate in the ASPI Australia–France Defence and Industry Dialogue. Peter Jennings will be along later to talk about some of the big picture strategic issues which will be discussed, so I thought I’d make some observations about the defence acquisition and industry issues which will come up, with a focus on Australian defence acquisition.

The early 2000s Australia was a reasonably happy hunting ground for the business development folk in European defence companies. That decade saw sales of trooplift and armed reconnaissance helicopters and air-to-air refuelling aircraft, as well as the engagement of Spain’s Navantia to design the navy’s air warfare destroyers and to partly build the two new amphibious ships now well underway. As well, weapons systems such as the MU-90 anti-submarine torpedo ^[2] and the Penguin anti-shipping missile ^[3] were acquired for integration onto the ADF’s platforms.

‘Going European’ wasn’t entirely novel, as Australia had previously sourced some major capabilities from European suppliers—not least of which the Mirage aircraft which were the backbone of the ADF’s air combat capability for 20 years. But there was a relatively large burst of activity that saw many major projects running concurrently. From the point of view of harnessing market forces, there’s an incentive for keeping the number of potential suppliers as large as possible. If we want to maximise our bargaining power in commercial negotiations with American suppliers, for example, then being able to credibly point to alternatives can only be a positive.

But I think it’s fair to say that the experience of the recent European acquisitions hasn’t been a particularly happy one. Through a combination of factors—some due to the performance of the suppliers themselves and some due to poor decision making or mismanagement in our own acquisition processes—the highest profile acquisitions have had an alarming tendency to be greatly delayed and several have ended up on the ‘projects of concern list’. Conversely, several equally high profile acquisitions through the American Foreign Military Sales system have delivered seamlessly, on time and even a little under budget.

To be fair, part of the problem has been that the European systems being acquired were still developmental (in some cases perhaps more so than appreciated by the DMO at the time) and that inherently raises the risks. American-sourced developmental acquisitions haven’t gone particularly smoothly either—the Wedgetail early warning aircraft and Super Seasprite helicopters falling into that category. So it’s more accurate to say that the acquisition of equipment from European sources has only reinforced a lesson that should’ve been learned long ago—avoid developmental solutions unless there really isn’t a credible alternative.

Of course, sourcing hardware is only part of acquiring military capability. All of the hardware pieces have to work with each other and with allied and partner systems when required. For Australia, the most important partner is the United States. Most European-sourced equipment will have a degree of interoperability with American systems built in due to NATO standards, especially for communications and data links. But European platforms often have European weapons integrated as part of the package. That’s not necessarily a show stopper for us, but they have their own supply chains, which complicates logistics. And having American and European weapons in service simultaneously makes it harder for the ADF to manage its inventory. That’s especially true for ‘smart weapons’ which require integration onto delivery platforms, which in turn requires software support and version careful configuration management across the fleet.

A good example of the sort of complications that can arise is the recent reporting ^[4] that the navy’s new Romeo model Seahawks won’t be able to routinely operate with the Mk 54 anti-submarine torpedo which is a standard fit in USN service. The vessels that the Seahawks will embark upon have the European MU-90 lightweight torpedo as part of their weapon suite, and therefore have storage, support and fuel handling systems required by that weapon, but which are incompatible with the American torpedo. This was a predictable situation ^[5] once the decision was taken to buy an American helicopter after the MU-90 had (eventually) been successfully integrated on Australian warships. (Though quite why it will also apply to ships that aren’t even built yet is another question.) The previous attempt to integrate the MU-90 onto American aircraft failed expensively, and it’s not likely that Defence will be tempted down that route again.

The recent history of defence acquisitions seems to me to indicate that European suppliers might have a harder time of it in the Australian marketplace in the years to come. With American materiel forming a substantial part of the existing and planned ADF inventory, and with the increasingly interdependent nature of defence equipment across the board due to the demands for integration of sensors and communication systems, it should be tempting to standardise on American-sourced solutions; if you already have a Mac, you’ll be inclined to buy an iPhone rather than an Android.

That doesn’t necessarily mean that European suppliers have no future in the Australian defence market. There are areas where Europe has a comparative advantage. Not least of those is in the development of diesel-electric submarines. Assuming that there’s no about turn on the ‘no nuclear boats’ approach, the US won’t be in the game, at least as far as the basic submarine design and propulsion systems are concerned. France has a submarine industry with a proven record of designing, building and exporting boats. Given that the future submarine is the biggest future Australian defence project by far, the industry reps at our meeting have some cause for optimism.

Andrew Davies is senior analyst for defence capability at ASPI and executive editor of The Strategist. Image courtesy of Department of Defence ^[6].