Senate Foreign Affairs, Defence and Trade Legislation Committee, , 2:48:36 to 2:52:53
Officials defend the $680 million spent on the submarine life extension project, explaining that costs cover design, engineering, and long-lead item procurement.
Topics: Government spending, Procurement
Speakers: David Shoebridge, Meghan Quinn, Mark Hammond, John Chandler, Unknown Speaker
>> Senator, that's not true.
>> Well, well, tell me what's been
even opened. So, of course, nothing has been installed on the first submarine to go into the program. And as previous testimony, there is a significant condition assessment that needs to be complete on HMAS Funkam. The boat that's conducted more sea time and has had more operational experience than the others. So Senator, this is a complex issue is one of the most complex sustainment activities that department un um undertakes and I believe that the testimony consistently over the last few years has made that very very clear. Uh there are complications in Adelaide as you are aware as the committee is aware the docking of HMAS Ranken was delayed. She continues to undergo full cycle docking activities. There's only so much workforce in Adelaide. So that there is a double parking issue. We have been absolutely transparent with that all the challenges which are which are um began with CO uh and other supply chain impacts. So, Senator, the the the the way you are characterizing this program is not accurate.
>> You say you've been so transparent about it. This whole line of questioning started because the government continues to want to hide from this committee, the oversight committee for defense expenditure, the Valdez report, which from what we do know from the audit report has been wildly critical of the capability and competence of the the corporate entity that's been set aside to do this load report. Doesn't have the engineering skills, doesn't have the capacity. This whole thing has has incredible risk. You talk about transparency. This whole thing started because this government won't release this secret report.
the Valdez report was provided to the NAO uh so they could undertake the necessary transparency as required by their legislation. We worked uh transparently and collaboratively with the NAO for them to be able to assess this program. We they have provided their assessment of of the program. We have accepted their recommendations and and have worked to undertake improvements. The program is a complex program that requires stages of development throughout the process. The characterization that I was drawing uh a differential from your your testimony was around uh the suggestion that money had been wasted. Uh money has been used on elements that are required in the work towards actually doing things on the submarine. Um that is not the start of the program. That is in the middle of
>> You you you say money hasn't been wasted. You you've bought a bunch of um bunch of diesel engines that don't even fit in the Collins class submarine. I can't remember how many tens and tens of millions of dollars. They're sitting in a shed somewhere and they're never going to fit in the in the Collins class submarine. If that's not money wasted, I don't know what is money wasted. You spent $680 million largely rewriting your homework to redesign engineering things because your original plan was wildly impractical >> and the taxpayer keeps paying for it.
>> So, Senator, the the the witness u you know, Mr. Chandler outlined a range of items that had been that the money had been spent on. It wasn't just around time taken for engineering assessments. was also pre-ordering for significant uh items of engineering that would be installed in the submarine. >> The the other item you were talking to was uh in response to a change in government policy. When there are changes in government policy, it is it is the case that the programs have to shift and then we work diligently to ensure that we reduce the financial consequences of that.
>> You know, if I was buying new engines for a boat, I'd make sure they fit. Don't you think that would be a basic basic premise before your department buys engines for a submarines? Just make sure they fit. That shouldn't be a basic starting point.
>> If I may, >> the purpose of doing the design effort is to establish how to install the equipment in the submarines and the design effort is complete. The equipment can be fitted when that's decided.