New Depths in Australia-US Relations: The Collins Class ...

Maryanne Kelton: New Depths 14unique platform and combat system (both of a new design), Australia's lack ofprevious experience, new consortium (ASC), separation of design centres fromproduction centres, fast track design and production 61 , the long construction phase(about 12 years), innovation (steel, ship control system, towed array, ADA software,anechoics, 62 ILS elements, etc) and the Australian industrial environment. 63Yet in 1997, after a politicised series of leaks, anecdotal evidence and pressreports criticising the progress of the project, at least three reviews were conductedto formally identify the difficulties and suggest a course of action to remedy theproblems. However, as the problems had already been identified and most dealtwith, this response revealed the pathological politicisation of the project. It is at onceironic and instructive that each of these reviews; the Joint Committee of PublicAccounts and Audit (JCPAA), the Australian National Audit Office (ANAO), and theMcIntosh-Prescott Report, had been reliant on the project office itself as the sourceof their information on the problems and the remedies.In 1997-8 the Auditor-General had completed a review into the project andexpressed concerns regarding the allocation of funds to the Project Office while asignificant number of commitments were still to be fulfilled. There were alsoquestions regarding management of quality assurance issues. As a result theparliamentary JCPAA conducted a subsequent investigation into the findings of theAudit Report of 1997-8 and submarine capability. 64 This culminated in an extensivereview that had canvassed the evidence of many of the stakeholders in the project.In response to the concerns outlined by the ANAO, the Department of Defenceadvised that the Audit Report did not focus on 'what had been done to manage andovercome the problems encountered during the development and construction of thesubmarines.' In addition, Defence saw that the risk now was substantially reducedand 'under effective management, and that the project cost remained within itsoriginal budget of $5.05 billion.' 65 Garry Jones, Defence Department's DeputySecretary (Acquisition) stated that,(f)rom the point of view of the taxpayer and the question of where we are going withthis submarine class, I am really very optimistic that the Royal Australian Navy isgoing to have an excellent submarine. We have got a few problems to work ourway through, but already a very clear outcome can be agreed. The difficulty wehave in the public arena is that to prove these claims one way or the other requiresthe disclosure of what we consider to be highly sensitive information. 6661 It was pointed out by one of the interviewees that this should not be confused with the ‘fast track’modifications to Dechaineux and Sheean in later years.62 This is a reference to the anechoic tiles as created by DSTO with ASC.63 'Response by Department of Defence', read by Robert Ray, CPD, Senate Hansard, 17 December1992, p. 5411. NB. Anechoics here refers to the anechoic tiles developed by DSTO with thecooperation of the ASC and the RAN which effectively reduced the noise of the submarines. See alsoThe Commonwealth of Australia, Audit Report No. 22, 1992-93, New Submarine Project, AGPS, 1992.64 The Commonwealth of Australia, Audit Report No. 34, 1997-8, New Submarine Project, was tabled on25 March 1998. The Audit Report suggested 12 recommendations designed to improve projectmanagement on the submarine project and other significant defence projects. The Joint Committee ofPublic Accounts and Audit, Review of Auditor-General's Report, No. 34, 1997-8, New SubmarineProject, was released in June 1999.65 Commonwealth of Australia, Joint Committee of Public Accounts and Audit, Review of Audit, pp. 2-3.Merrilyn McPherson, Acting Deputy Secretary, Acquisition, Defence Acquisition Organisation,Transcript, 29 April 1998, pp. PA 38-9. The original project cost in June 1987 was identified at $3.892billion, however, with currency alterations, inflation, and labour costs, the project expenses increased.The contingency for the project was 5 per cent. The usual 10-15 per cent was unpalatable for the thenHawke government.66 Garry Jones, Joint Committee of Public Accounts and Audit, evidence transcript, 5 March 1999, p. PA87. Also quoted in the JCPAA Review of Audit Report, p. 64.