The Australian Department of Defence has ordered twelve new submarines with French Naval Group. Yet, even while still only in the design phase, the project has already run into a nine-month delay. Naval Group is also one of the companies contending for the Dutch submarine order.
The twelve submarines are to replace the fleet of six Collins class submarines currently operated by the Royal Australian Navy. These vessels reach the end of their service life in 2036. At a reported cost in the order of 49.5 billion euros (80 billion Australian dollars), it represents the largest Defence procurement in Australia’s history.
Although French Naval Group was chosen to design the submarines, construction is to take place at the Adelaide shipyard to secure jobs and a large role for Australian suppliers.
Audit report
The Australian National Audit Office (ANAO) has now published a performance audit report about the platform design phase. According to this organisation, ‘the decision not to acquire a military‐off‐the-shelf submarine platform, and instead engage a “strategic partner” to design and deliver the submarines with significant Australian industry input, has increased the risk of this acquisition.’
Within the project, the platform design phase represents the largest material component of the program to date (approximately 47 per cent of all program expenditure as of 30 September 2019). From the audit, it follows that two key mandated design milestones have been extended. ‘Program success is dependent on the timely and cost-effective delivery of major design milestones,’ warns the ANAO in its report.
Eye-catching finding of the ANAO is that the programme is already being faced with a a nine-month delay in the design phase against Defence’s pre-design contract estimates. The two key mandated design milestones extended are the Concept Studies Review and the Systems Requirements Review.
Capability gap
Defence has identified that a delay in the Future Submarine Program of more than three years will create a gap in Navy’s submarine capability and would require a life-of-type extension for its Collins class submarines. The Australian government still expects the commencement of construction activities in Australia, and the delivery of the future submarines may still make the set deadlines.
Dutch submarine order
The problems Naval Group has run into in Australia come at an inconvenient time as the company is also vying for the Dutch submarine order. The Dutch Government has plans to replace its Walrus class submarines with four new ones. In addition, Naval Group has also suffered delays in the construction of submarines for the French Navy.
It cannot be said these delays will be taken into account in the Dutch tender process, but of course it does not improve their track record. Other contenders for the Dutch submarine order are German ThyssenKrupp Marine Systems and the Swedish-Dutch combination of Saab and Damen.
Picture: A Walrus class submarine (by the Dutch Government).
