Antinuclear

Sinking billions: undergunned and overpriced

Missing records, billions in over-runs, conflicts of interest, and flawed ships. How the Defence Department’s new frigates project is a boondoggle for a British weapons-maker.

MICHELLE FAHY, JUL 3, 2023,  https://undueinfluence.substack.com/p/sinking-billions-undergunned-and?utm_source=post-email-title&publication_id=297295&post_id=132705738&isFreemail=true&utm_medium=email

Part one of a two-part series.

In this two-part investigation, Declassified Australia examines the flawed contracting process that led to a $46 billion naval ship-building deal that has been found to be suffering what an investigative audit described as ‘corruption vulnerabilities’.

The company at the centre of the scandal, UK arms giant BAE Systems, is revealed to have lied to Australia’s Defence Department about the planned ship’s design.

Crucial departmental records of key decision-making meetings have gone missing, while no overall assessment of whether the selected BAE design was value for money was ever made.

The Australian National Audit Office (ANAO) reported in May its findings on the multi-billion dollar contract Australia signed in December 2018 with BAE Systems to build nine Hunter-class frigates.

The ANAO found that BAE had overstated – bureaucratic language for lied – the level of development of the frigate’s design, which meant cost inflation and schedule slippage were severely under-estimated.

BAE exaggerated the maturity of its design to get around a key government objective requiring the ship to be based on an existing military-off-the-shelf design with a minimum level of change.

Defence selected the BAE Systems frigate even though the two other ships on its shortlist were considered the two most viable designs.

Business as usual

Conflicts of interest, secret consulting deals, and revolving door appointments all undermine democracy, yet this is business-as-usual at the Defence Department, the nation’s biggest procurement agency.

Former senior BAE executives have been placed at the heart of Australia’s naval procurement. They have helped write government shipbuilding policy, 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, making this a story about state capture as well, when a corporation has the power to bend governments to its will.

When combined with departmental corruption or incompetence, or both, the result is defence procurement projects that are billions of dollars over budget and running years late. As a result, the navy is facing massive capability gaps.

Continue reading this story at Declassified Australia…

March 25, 2024 - Posted by Christina Macpherson | AUSTRALIA - NATIONAL, weapons and war