The BAE Hunter Class Type 26 Frigate deal was the usual lacklustre, money-draining performance we’ve come to expect in Defence procurement. Three options were available. Two “viable” designs by Navantia and Fincantieri. Both in the water and already operating in European navies. The third, BAE’s “paper boat”. Unproven. Untried. Unbuilt.
People without the “expertise” of the Liberal National Party government and their advisors in military procurement, would probably have gone for a proven sea-going design. They would have seen the obvious performance certainty and cost benefits that would entail.
According to the ANAO, Defence records have revealed the department’s initial assessment concluded the Italian FREMM and Spanish F-100 were better options for Australia than the British Type 26 design – Source
A rookie mistake. That’s not how Defence procurement operates. The more complex and unproven a procurement plan, the more likely it will be taken up. Any upgrades or modifications that can complicate things further are the proverbial cherry on top.
“Each frigate is modified to meet Australian requirements with Aegis combat management system, Australian-designed and built CEAFAR2 phased array radar, support for Australian weapons, capacity for Seahawk Romeo Maritime Combat Helicopter and Australian communications systems.”
…and insisting on local manufacturing quotas (that rarely eventuate)…
…are an excellent means of slowing down already time-constrained projects. Everyone wants a piece of that defence project pie. It’s
mostly unaccountable money in the billions, where delays and cost blow-outs are the norm.
The argument to make defence procurement an alcohol-free exercise is gaining momentum
A lack of consequences for billion dollar blunders has bred an elite group of wastrels. Their very lush existence dependent on extracting as much money from the Australian people as possible. Imagine the red-carpet treatment – Australian weapons purchasers with the power to bequest billions – receive from weapons manufacturers while overseas.
Labor, “nothing to do with us”
Labor are doing some rapid backpedalling as the BAE frigate debacle gets more attention.
“Without going into the detail of the ANAO’s (Australian National Audit Office) report, what is clear is the Coalition government once again didn’t take defence and defence projects seriously,” (Marles) said.
“The expected time frame for the first of the Australian Navy’s Hunter-class frigates is 2031, acting Prime Minister and defence minister Richard Marles revealed.
Defence minister Marles unveiled the information during the visit to BAE Systems’ shipyard in Govan, Glasgow, (September, 2022) where British Type 26 frigates are being built. The minister visited the shipyard to see the progress on the first Type 26, HMS Glasgow.” – Australia’s first Hunter-class frigate to be operational in 2031 – by Fatima Bahtić – Naval Today
Marles wasn’t expressing any concerns back then about the BAE Frigate program, which at that stage was still an 8,800-tonne vessel. It’s closer to 10,000 tonnes now (lots of cherries) which will affect, speed, fuel consumption, etc… It will also affect draft which is important in this region.
Note that Marles is putting all the onus for the frigate costs and delays on the LNP, not BAE and other Defence contractors or consultants such as KPMG.
“Since 2013, work KPMG won was initially valued at $1.7 billion but ended up costing the federal government more than $2.6 billion. “We discovered that every KPMG invoice reviewed was incorrect … Defence had been consistently overcharged,” (the whistleblower stated) in a statutory declaration. KPMG charged for work never completed and even billed for a consultant who had not worked on a project, they added.
The whistleblower said part of the problem was the influence that the KPMG consultants – most of them former Defence Force members – had over their former colleagues. Defence dismissed many of the allegations after an investigation in 2016, despite the whistleblower providing “substantial written documentation” including emails and financial reports. The whistleblower said they were eventually forced to leave Defence.
A second whistleblower levelled further allegations, including that KPMG told staff to bill Defence for work not done. “I was instructed to record time spent on internal projects against Defence codes,” he said. – Consulting firm KPMG overcharged Defence while raking in billions of dollars, whistleblowers say – By Angus Grigg, Jessica Longbottom, Jonathan Miller and Maddison Connaughton – Four Corners – ABC
Those two trouble-making busybodies are bloody lucky not to be facing imprisonment for interfering with established Defence/Consultancy practices. Meanwhile, David McBride and other whistleblowers who have also had a problem with the way government manages its affairs, are being punished for their courage and abrasive honesty.
Marles also neglects to mention, the myriad executives and senior public servants charged with the responsibility for these decisions and the Labor opposition supposed to keep government honest.
The Rudd/Gillard/Rudd Labor governments and the Albanese Labor government which share culpability for our long running Defence procurement wastage, are also overlooked by the myopic Marles.
The indispensable Declassified Australia share our views on the complicity of the Labor and Liberal parties.
“Former senior BAE executives have been placed at the heart of Australia’s naval procurement. They have helped write government shipbuilding policy, have overseen the Navy’s largest tenders, and have even been hired by the government to negotiate on its behalf with their former employer on a deal now found to be riddled with probity concerns.
Granting preferential access to certain arms industry insiders escalated under previous Liberal-National Coalition governments and since 2022 has continued under the Albanese Labor government. So this is also a story about state capture – when a corporation has the power to bend governments to its will.” – SINKING BILLIONS – UNDERGUNNED AND OVERPRICED – by Michelle Fahy – Declassified Australia
Labor on BAE, more spin than an ANZAC two-up game
Labor seemed enthralled with BAE (back in October 2022) a company they chose to “optimise the capability of the Royal Australian Navy’s Hobart class destroyers“. Cool organisational buzzwords abound and there’s no indication of anything but confidence in BAE taking on “a new, innovative sustainment role“.
The (Albanese) Australian Government has signed a six-year contract with BAE Systems (from 2022) to take on a new, innovative sustainment role designed to optimise the capability of the Royal Australian Navy’s Hobart class destroyers. Extending our partnership with BAE Systems for our Hobart class destroyers will ensure the vessels are fit-for-purpose, reliable and available when and where they are needed.
The new approach will see a Capability Life Cycle Manager installed for the Hobart class destroyers – the first of its kind for a major in-service asset, as part of the realisation of the Future Maritime Sustainment Model under Plan Galileo.”
This is impressive sounding stuff.
Under the new approach, BAE Systems will steward the destroyers through life, including a significant upgrade to their combat management system in 2025. The Capability Life Cycle Manager will work with Regional Maintenance Centre East, which as part of the new approach is being established to maintain multiple asset classes.
“We’re committed to investing in our local Defence industry and our assets with an upgrade to our Hobart class destroyers valued between $3.4 and $5.1 billion to be delivered at the Osborne Naval Shipyard, which will create 300 jobs (Editor: about $16,600,000 per job) in South Australia.” – Defence industry partner announced to optimise Hobart Class Destroyers – The Hon Pat Conroy – Labor MP – Minister for Defence Industry
Labor must not have seen the earlier reports on BAE’s “activities”
Due diligence by Labor might have seen some concern over padding by BAE worth “tens of millions of dollars”. However, as the French submarine fiasco has shown, the ethics of weapon’s manufacturers are rarely considered of import, by our compliant neoliberal governments.
“Then there is yet another key supplier to Defence, the UK multinational BAE Systems, which in 2018 won the $35 billion future frigate contract to build the navy’s nine new anti-submarine warships. The new contract was awarded even though there had reportedly been “long-running concerns” inside Defence about alleged inflation of invoices by tens of millions of dollars by BAE for its work on the navy’s elderly Adelaide-class of frigates (now decommissioned). An internal audit by Defence reportedly found BAE’s Adelaide contract “riddled with cost overruns, with the British company consistently invoicing questionable charges”. By May 2019, Defence had launched a fresh investigation.” – SINKING BILLIONS – UNDERGUNNED AND OVERPRICED – by Michelle Fahy – Declassified Australia
In reaction to recent bad publicity, Labor MP Julian Hill is questioning, “…why BAE Systems was awarded the procurement contract by the Turnbull government in June 2018 without a “value for money assessment” for a “ship that didn’t exist”. 1
The spin is dizzying.
It gets even more convoluted.
Labor welcomes the announcement of BAE as the successful tender for the Future Frigates program. This announcement is a significant milestone in this project, which was initiated by the former Labor Government in 2009. BAE is a world-class partner for Australia to build the next generation of frigates. They have a proud history of delivering capabilities that have helped keep Australia safe, and Labor is sure they will do so with the frigates as well.
Even Labor’s mandatory – “While we support this – we would have done a better job” – piece manages to confuse.
Today’s announcement, however, is also an opportunity lost for Australia. Today (June 2018) the Government had an opportunity to ensure a truly Australian design partner was part of the frigate program and they failed.
Labor reiterates its call for the Government to mandate that the frigate build be done in collaboration with a truly Australian design partner. Only then can we be assured that the intellectual property behind the build process will be based in Australia and maintained in Australia.
– Richard Marles MP Shadow Minister for Defence Member for Corio – Senator Kim Carr Shadow Minister for Innovation, Industry, Science and Research – Dr Mike Kelly (now working for the CIA through Palantir) AM MP Shadow Assistant Minister for Defence Industry and Support – Media Release – Future Frigates (PDF)
Austal and ASC Shipbuilding are both Australian companies and this announcement below predates Labor’s concerns about a lack of Australian input.
“Austal Limited (ASX:ASB) today (June 2017) joined ASC Shipbuilding, to announce its teaming agreement for the build of the SEA5000 Future Frigates Program, which will secure the future of naval shipbuilding in Australia for decades to come.” – Austal and ASC Shipbuilding join forces to support Government’s National Shipbuilding endeavour – ASC website
Making sense of it all
Don’t even bother trying. All you need to know is that the money made from defence procurement is why we have so many unnecessary wars. Australia’s media and politicians are all part of this murderous boondoggle and will say whatever is necessary to keep the ball rolling. How else to explain Marles’ and Hill’s media-triggered backflips?
One thing we must remember is the subtext to weapons procurement, often overlooked as we get bogged-down in value, tactics and strategy. Civilians killed in their millions. Mutations from depleted uranium ammunition. Child soldiers. Military personnel dying in agony. The destruction of infrastructure and the devolution of societies. The enormous amounts of money and resources consumed, wreaking havoc on our ecosphere.
“Pentagon spending has totaled over $14,000,000,000,000 (14 trillion) since the start of the war in Afghanistan, with one-third to one-half of the total going to military contractors.” – Profits of War: Corporate Beneficiaries of the Post-9/11 Pentagon Spending Surge – Watson Institute – Brown University
The weapons industry exacerbates the hardships of people on a planet facing Climate Disaster. All to benefit, a relatively few, entitled, voracious, psychopaths.
‘AUKUS’ is Australia paying its tribute to the USA
As to the absurdity of the French converting their Barracuda-class nuclear-powered submarine into a diesel-electric variant for Australian consumption – only for us to cancel the deal to purchase American nuclear-powered submarines? This was accomplished in a heartbeat thanks to a Labor Party abandoning Labor values for the semblance of power. Their cowardly acquiescence costing the people a mere $3,400,000,000 for zero French submarines, and a paltry $400,000,000,000 pledged to our fellow white imperialist nations.
The USA and England are looking for somewhere to dump their nuclear waste
Australia too will need a waste dump, if these nuclear submarines ever eventuate
The desperation shown by our AUKUS ‘allies’ to find a waste dump for radioactive material should concern us
Feature image: All smiles in 2018. Then Minister for Defence Industry Christopher Pyne, BAE Systems Australia CEO Gabby Costigan, then Minister for Trade Simon Birmingham, then Liberal candidate Georgina Downer, former Prime Minister Malcolm Turnbull, then Defence Minister Marise Payne, former Chief of Navy VADM Tim Barrett, Senator David Fawcett, and then South Australian Premier Steven Marshall at the BAE Systems Hunter-class frigates announcement in Adelaide. (Image: Defence Department)
FUTURE FRIGATES – ALP Media Release (PDF)