As a war breaks out between the Defence Minister’s Office and his Department, and as the Auditor-General hands down another scathing annual Defence Major Projects Report, Rex Patrick examines the Future Frigate Farce and explains why Richard Marles and the Defence Diarchy has to go.
A shambles in Defence leadership
On Tuesday, we saw media reports that the Future Frigate Program will likely be reduced from nine ships to three.
On Wednesday, Senator Lambie stood up in the Senate chamber and summed up the Defence Department as a “very, very expensive basket case”.
Here’s @JacquiLambie in the Senate this morning discussing the “very very expensive basket case” that is @DefenceAust procurement. Calling it how it is. #auspol pic.twitter.com/AWsdGE8uPZ
— Rex Patrick (@MrRexPatrick) February 7, 2024
On Thursday there were more reports in the media, this time triggered by the blame game that’s erupted between Defence Minister Richard Marles’ office and the most senior officers of the Defence Force and his department.
Competitive leaking has surged on both sides of Lake Burley Griffin, the likes we haven’t seen since Joel Fitzgibbon lost his job as Defence Minister back in 2009.
On Friday, the Auditor-General released his annual report into the 20 current major Defence projects revealing, “The total approved budget for the 20 Major Projects has increased by $22.8B (39%) since initial Second Pass Approval by government” and the “total schedule slippage was 453 months (23%) when compared to initial project planning”.
Something has to happen with the dysfunctional Defence leadership, and what’s required is not what happened on Australia Day with the award of the Order of Australia to the Secretary of Defence, Greg Moriarty, on Australia Day. For the past six years he’s presided, with a bloated salary of almost a million dollars per annum, over what can only be described a shambles. Talk about devaluing the honours system.
I’ll come back to what needs to happen.
Frigate trim
It’s an old joke from the BBC TV series “Yes Minister” that the ship of state is the only ship to leak from the top.
It’s nowhere truer than in our Defence Department.
This week, another leak coming from inside Defence indicated that the Government may take the troubled nine-ship future frigate program and chop it down to just three ships.
That could only be described as just plain stupid.
Most of the cost of designing and producing a new class ship comes with the first ship. Most of the cost of fixing problems with a new class of ship comes with the first, second, and third ship. It makes no sense at all to limit an order to three ships.
If Defence thinks that the future frigate ship design is good enough to buy three to put our sailors in and send it in harm’s way, then they should continue with the nine-build program so that they can bring the unit cost down over a large build.
If Defence thinks the ship is a dud, it should cut our losses now and move to an off-the-shelf design, built here in Australia starting later this year.
Of course, such a decision would involve admitting to another massively embarrassing failure.
But it looks like dumb and dumber are again in charge.
Dumb Ways to Buy: Defence “shambles” unveiled – former submariner and senator Rex Patrick
Selection incompetence
It’s worth looking into the Future Frigate program.
When the program first became a topic of discussion inside Defence way back in 2014 (yes, to go from an initial thought to still having no future frigates at all has taken Defence the length of World War I and World War II and then some) the plan was to go with an off-the-shelf design – that is, a design that was already at sea working.
They set a budget at an eye-watering $30B dollars.
When the tender came out in 2016, the position of the Department was clear – they wanted a military-off-the-shelf design with minimal change.
Source: Future Frigate Tender Document
Subsequent investigations by the Auditor-General and Senate have revealed that Defence departed from that tender requirement without any process. They selected a design, BAE’s Type 26 frigate, that was not off-the-shelf and involved significant engineering, weaponry and other technological changes (into what is now referred to as the Hunter Class).
We now know from an Auditor-General audit and formerly Secret – Australian Eyes Only independent review that the down-selection process was fundamentally flawed. All the focus was on capability – paper capability as opposed to fielded capability – and, contrary to law, there was no value for money assessment.
Documents recording the decision-making processes of senior defence leadership do not exist. Defence Secretary Greg Moriarty AO can’t explain any of this.
At down selection, the program’s cost had risen to $45B – a fifteen thousand million dollar increase – and the program is now more than 18 months behind schedule. Even with a $45B budget, the Auditor-General has found further bureaucratic shambles and run-away costs.
Source: Internal Defence ‘Independent’ Report
Overweight and other problems
One of the big problems with the Hunter Class is weight. It went from around 8,800 tonnes to 10,000 tonnes.
Significantly extra weight means the propulsion system can no longer achieve the planned top speed, and for any given speed, more strain will be put on the propulsion system, lowering the ship’s range and meaning that the ship is nosier. That’s not a good thing for an anti-submarine frigate.
The new Auditor-General’s report details the ongoing concern, “There is a risk that [the Hunter Class Frigate] design may exceed the naval architecture limits on weight and stability at the completion of the [design and productisation] scope, which may limit or provide in-service growth margins that substantially limit future capabilities.
There are a range of other technical problems that were discussed in the Senate in February 2022 after an internal Defence report was leaked to the late Senator Kimberly Kitching.
So far, the project has spent $2.6B dollars, and we haven’t started building a ship yet. By the time Defence gets a ship in the water, if one bravely assumes there will be no further delays, it will be after four World War timeframes.
While the taxpayer is now suffering, and national security has been harmed, the person who was instrumental in pushing the BAE option, Tim Barrett, has left his job as the Chief of Navy and taken up work as a paid advisor to BAE.
Groundhog Day – including for AUKUS
So, Defence contracted BAE to build a frigate that was not off-the-shelf. The first was to be built in the United Kingdom, and the second was to be built in Australia.
With all that has happened, have we not learned? Apparently not, our Defence leadership are true masters of the flat learning curve.
The five AUKUS SSN submarines Defence proposes to acquire from the UK are not even paper boats. The first will be built in the UK, and the second will be built in Australia. The only difference is that with a budget of $368B, the outcome will be so much worse.
If Defence looked at the future Frigate program honestly, they’d cancel the AUKUS subs. But self-reflection and honesty are rare characteristics among our bloated Defence top brass.
Instead, they’ve doubled their bets again and again, each time hoping they have something that’s too big to fail, or at least that they’ll have moved to a cushy consultancy before the proverbial hits the fan.
No doubt some of our admirals, generals, air marshals and top Defence bureaucrats believe that AUKUS is too big to fail.
But rest assured in the real world of military strategy, conflict and international relations, failure can come fast and hard.
Services no longer required
Over and over, Defence is failing the public when it comes to procurement.
The diarchy at the top of Defence needs to go, and so does the uninspiring Defence Minister. Services no longer required, gentleman!
We need to bring project management discipline into procurement decision-making. Right now, we have admirals, air marshals and generals with little project management experience making recommendations on procurement to cabinet ministers who have no project management experience.
The Defence Department often looks back to the First World War as the source of Australia’s military traditions.
But it’s not the Diggers of ANZAC that our Defence elite today resemble.
They have much more in common with the medaled fools of the creaking Austro-Hungarian Empire; incompetent marshals and generals, commanders who preened themselves in peace before leading to catastrophe a military force bereft of adequate munitions, equipment and logistics.
Without radical reform, our current Defence leadership will, at best, cost us dearly in procurement ineptitude and financial waste. They may well cost us much more than that.
Drastic change is needed for the sake of servicemen and women who are being asked to defend us with aged and obsolete capabilities and for the sake of our national security.
The scam within a scam. US, UK officials are flying high on the AUKUS teat.
Rex Patrick is a former Senator for South Australia and earlier a submariner in the armed forces. Best known as an anti-corruption and transparency crusader - www.transparencywarrior.com.au.