{"id":52922,"date":"2020-01-15T14:23:25","date_gmt":"2020-01-15T03:23:25","guid":{"rendered":"https:\/\/www.aspistrategist.ru\/?p=52922"},"modified":"2020-01-15T14:23:25","modified_gmt":"2020-01-15T03:23:25","slug":"submarine-report-reveals-defence-advised-to-consider-other-options","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/submarine-report-reveals-defence-advised-to-consider-other-options\/","title":{"rendered":"Submarine report reveals Defence advised to consider other options"},"content":{"rendered":"
<\/figure>\n

The Australian National Audit Office has just released its latest report<\/a> on Australia\u2019s $80 billion future submarine capability. It set itself the task of examining \u2018the effectiveness of Defence\u2019s administration of the Future Submarine Program to date\u2019. The program\u2019s supporters and detractors will both find some validation in this report.<\/p>\n

We all are now calling an $80\u00a0billion spade an $80 billion spade, not a \u2018greater than<\/a>\u2019 $50\u00a0billion spade or a $50 billion in-constant-dollars<\/a> spade. Defence finally gave an $80 billion \u2018out-turned\u2019 number that takes real-world factors such as inflation into account at Senate estimates<\/a> in November last year. That $80\u00a0billion figure is repeated in this report.<\/p>\n

Defence says that this isn\u2019t a cost increase but just a different way of expressing the same number. But once you add the future submarine\u2019s $80 billion to the $35\u00a0billion future frigate and the $4\u00a0billion offshore patrol vessel, that increases the government\u2019s $89 billion local shipbuilding program by $30 billion to $119 billion. $30 billion here, $30 billion there; pretty soon we\u2019re talking real money.<\/p>\n

One of the program\u2019s key achievements in the past year has been the signing of the strategic partnering agreement between Defence and Naval Group to govern the design and construction of the submarine. It was originally meant to be signed in October 2017, but negotiations didn\u2019t begin until the next month, and the government agreed to the negotiated outcome only in February 2019. The good news is that the ANAO reports that the government and Defence got everything they wanted, including intellectual property rights; transparency on costing; remedial measures and protections; and acceptable levels of Australian industry participation.<\/p>\n

But there\u2019s another narrative here. Many observers suggested that the lengthiness of the negotiations indicated fundamental cultural and commercial differences between the parties. The ANAO report notes that the Naval Shipbuilding Advisory Board, a panel of experts established to give the government independent advice on the shipbuilding program, had serious concerns.<\/p>\n

Not only did the board recommend in September 2018 that Defence examine alternatives should the negotiations not succeed, but it also advised a year later that Defence should \u2018consider if proceeding is in the national interest\u2019 even if negotiations were successful. That\u2019s serious stuff. The ANAO report doesn\u2019t say what the advisory board\u2019s concerns were. We can only hope that the final rounds of negotiations addressed them, particularly since the ANAO rightly assesses that the \u2018success of the program is dependent on Defence establishing an effective long term partnership with Naval Group\u2019. Since the government agreed to sign, it must have been confident that the issues were addressed.<\/p>\n

The report also looks at aspects of the program\u2019s schedule, which it\u2019s been difficult to get a clear view of. There\u2019s a high-level diagram in the 2017 Naval Shipbuilding Plan<\/a>, and information trickles out, such as through Defence\u2019s 9\u00a0May 2018 response to the estimates committee on foreign affairs, defence and trade. Moreover, terminology for key milestones has changed, which confuses things. I\u2019d been hoping this report would provide the complete master schedule at different points in time so we could see which milestones had been delayed and where delays could be made up. That didn\u2019t happen, but the report does provide some useful data points.<\/p>\n

The report confirms, as foreshadowed at heated estimates hearings<\/a> in October, that some key design milestones have slipped. The systems requirements review was originally meant to be completed by March 2019. After the design contract was signed, that milestone moved to October, and the review started only in December (and it\u2019s not clear whether it\u2019s been completed). Similarly, completion of the preliminary design review has moved from March 2020 to January 2021.<\/p>\n

The report also reveals that Defence advised the government in February 2019 that Naval Group had proposed to extend the completion of the design phase by 15 months from July 2022 to September 2023. Ultimately, Defence agreed to a nine-month extension (to around March 2023). Construction is scheduled to start in 2022\u201323 (according to the high-level schedule provided to the Senate in May 2018 at least), so things are getting pretty tight if Defence wants to complete the design before starting construction. The ANAO hasn\u2019t assessed the impact of the extension on the start of construction and the submarine\u2019s entry into service, although at Senate estimates in November<\/a>, Defence officials said that the 2022\u201323 construction date actually meant 2024 for the start of construction of the vessel itself.<\/p>\n

Defence\u2019s position is that getting the design right will save time and money in the long run by reducing rework. With construction scheduled to start in 2022\u201323 and sea trials scheduled to begin in 2031\u201332 (according to the high-level schedule provided to the Senate in May 2018), there\u2019s potentially nine years to make up any lost ground. But, if the critical design review scheduled for June 2022 slips by the same amount as the earlier design reviews, we\u2019re already eating into construction time.<\/p>\n

The report also notes that Defence has advised that \u2018a delay in the Future Submarine Program of more than three years will create a gap in Navy\u2019s submarine capability\u2019. What that means isn\u2019t entirely clear. Based on my own analysis<\/a>, I suspect that it\u2019s saying that a three-year delay would result in the submarine force falling to fewer than six vessels, even if all six Collins boats go through a 10-year life-of-type extension to mitigate the risk of a capability gap. But what schedule baseline are those three years measured against? Have we already eaten into them? And with Defence now saying<\/a> that the life-of-type extension program is seeking to replace virtually the entire Collins propulsion system (diesel generators, main motor and DC switchboard), that looks like a high-risk risk-mitigation proposition.<\/p>\n

Overall, the report gives the impression that the program is being run according to solid project management principles and is putting integrity above expediency. It concludes encouragingly: \u2018Defence has established the formal arrangements for the effective administration of the Future Submarine Program.\u2019 But it also confirms that, under those arrangements, the first new submarine won\u2019t be in service before 2034. That\u2019s still a long way off.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Australian National Audit Office has just released its latest report on Australia\u2019s $80 billion future submarine capability. It set itself the task of examining \u2018the effectiveness of Defence\u2019s administration of the Future Submarine Program …<\/p>\n","protected":false},"author":767,"featured_media":52925,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[720,2436,304,223],"class_list":["post-52922","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-anao","tag-attack-class","tag-royal-australian-navy","tag-submarines"],"acf":[],"yoast_head":"\nSubmarine report reveals Defence advised to consider other options | The Strategist<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.aspistrategist.ru\/submarine-report-reveals-defence-advised-to-consider-other-options\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Submarine report reveals Defence advised to consider other options | The Strategist\" \/>\n<meta property=\"og:description\" content=\"The Australian National Audit Office has just released its latest report on Australia\u2019s $80 billion future submarine capability. 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