ANAO Report – Future Submarine Program – Transition to Design

Department of Defence

ANAO Report – Future Submarine Program – Transition to Design

Australia is fully committed to working with France and Naval Group to deliver the Attack Class Submarine fleet, which remains a strategically vital capability for our Defence Force into the future.

The ANAO has previously reported that Defence effectively designed and implemented the process to select an international partner for the Attack Class Submarine Program (ANAO Report No.48 2016-17). Through a robust and comprehensive selection process, Defence determined that Naval Group was the most suitable partner to design and deliver a regionally superior submarine that will best meet our demanding capability requirements. Nothing has altered this assessment. Defence stands by this judgement.

Contrary to media interpretations of ANAO’s latest report on the Future Submarine Program, Defence was not advised to ‘walk away’ from Naval Group by the Naval Shipbuilding Advisory Board. In line with best practice and following the advice of the Advisory Board, Defence has continued to assess all of the risks that attend this highly complex program.At each stage, we are adopting relevant risk mitigation strategies. The ANAO acknowledges that Defence has taken steps to manage risks.

The ANAO also concluded that Defence established a fit-for-purpose strategic partnership framework with Naval Group. Having done so, Defence continues to actively manage its contractual arrangements with Naval Group as both parties work closely to meet the inevitable challenges that will arise with a program of this scale and complexity.

Following signature of the Strategic Partnering Agreement in February 2019, a schedule for design of the Attack Class Submarine was agreed and implemented under the Submarine Design Contract. This schedule reflected Defence’s requirement for high levels of design maturity at defined points during the design phase.

Defence has continued to ensure that design of the Attack Class has progressed to the required high levels of design maturity, providing greater certainty that our capability requirements will be met, and avoiding costly and lengthy delays that would otherwise eventuate during the construction phase of the Program.

While the first scheduled major milestone under the Submarine Design Contract was reached five weeks later than planned, Defence and Naval Group are working towards the recovery of this delay by the next contracted major milestone in January 2021. Importantly, the delivery of the Attack Class Submarine has not been delayed.

Defence has remained open in reporting the high risks that accompany the Attack Class Submarine Program, and has been diligent in working with its industry partner to manage pressures. As many lessons from major projects clearly indicate, taking the time required to establish strong foundations at the earliest stages of the Attack Class Program will underpin our longer-term ability to deliver the Attack Class fleet to schedule.

Acknowledging the scale of this Program, we remain confident that our work on the Attack Class Submarine Program with Naval Group and Lockheed Martin Australia is progressing thoroughly and will result in the delivery of a regionally superior submarine capability for Australia from the early 2030s, establishing a truly sovereign capability as we maximise the involvement of Australian industry.

/Public Release.