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Defence must combat project overruns

dcns future sub

In the wake of the latest Future Submarine contract signing and the release of the Major Projects Report from the Australian National Audit Office, which confirmed cost overruns and delivery delays, calls have been made to change the way Defence does business.

In the wake of the latest Future Submarine contract signing and the release of the Major Projects Report from the Australian National Audit Office, which confirmed cost overruns and delivery delays, calls have been made to change the way Defence does business.

As previously reported on Defence Connect, major defence projects are averaging delays between 14 and 54 months, while project of concern AIR 5431 Phase 3 Civil Military Air Traffic Management System (CMATS) will be seeking extra funds from the government next month.

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Nick Xenophon Team senator Rex Patrick, a former submariner and project manager, said the latest ANAO report and evidence provided to the Senate presented serious concerns about the current state of operations within the Department of Defence.

"Defence's management of major equipment procurement is bleeding billions of dollars," said Patrick.

"While the government has been cutting cost to welfare, health, education and other important community programs, major blowouts in Defence are almost going unnoticed."

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The latest $700 million contract awarded to Lockheed Martin Australia has been welcomed by the Nick Xenophon Team, however Senator Patrick has raised concerns over the cost of the contract and the lack of transparency.

"We have no idea what's included in the $700 million contract. That's something we'll have to unpack at [Senate] estimates," he said.

"Noting this work is for integration and installation, the number seems high." 

Former senator Nick Xenophon asked questions at a 2015 Senate estimates hearing about the actual tactical weapon control system that Lockheed Martin will integrate but no answer was given.

"On the evidence, the government has not established a price for the actual tactical weapon control system that will be installed and integrated by Lockheed Martin," Senator Patrick said.

"It seems we've committed to a system where we don't understand the price. That approach is somewhat cavalier."

Defence must combat project overruns
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