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would be nation benefiting, the discussion was much
On the positive side of the ledger, constructing
submarines in Australia serves as a useful mechanism
for building a knowledge and expertise base for the
future sustainment and evolution of the submarine
force. This brings both national security benefits and
potential savings into what is the most expensive
element of total through-life cost. It also provides
a means of injecting not only fiscal, but intellectual
capital and capability into the economy; perhaps also
spurring local innovation investment.
On the negative side of the ledger, lack of
competitiveness is the primary detractor. The
economic theory of ‘comparative advantage’ (a theory
that suggests pursuit and funding of inefficient
enterprises only occurs at the expense of those that
are otherwise efficient) serves as the biggest enemy
of a local build program. And it must be recognised
that there is strong support for ‘comparative
advantage’ theory in Government; hence its decision
to let the South Australian car industry collapse upon
itself, its decision to reject a $25 million assistance
request from SPC Ardmona and a refusal to lend
assistance to Qantas as it shed 1000 jobs and its
share price fell to $1 in December 2013 (notably
more than $3.50 today). Of course, the theory of
‘comparative advantage’ falters in periods other than
full employment and fails to recognise the general
proposition that it would be economic negligence
to promote a consuming nation in preference to a
The 2013 article concluded “the case for a local
build is not strong, with politics the main driving
factor”. Noting what has happened over the past 12
months whereby there was a political shift away from
Australian assembly to a ‘captain’s call’ Japanese
built submarine to a leadership spill inspired (as
opposed to merit) Competitive Evaluation Process
(CEP) where an Australian build is left competing
with a hybrid and overseas build, the conclusion
reached is validated.
If there is to be any chance of an Australian build
making it through the submarine CEP successfully,
especially noting Tony Abbott’s recent rebound in the
polls, it is critical that the build cost premium issue
THE PUBLISHED CAUSES
To tackle the problem, one must look at the causes.
Any one of a number of reports into the AWD program
can be parsed to reveal their published reasons.
They include 1) Immature design selection and low
change resistance, 2) poor program management
structures, 3) poor productivity, 4) lack of visionary
oversight and 5) inadequate government oversight.
Unfortunately none of these target the root cause
and one of them may simply be wrong.
We now look at each of these reasons in more
detail, reveal the root cause and discuss submarine
relevant aspects and implications.
CAUSE ONE IMMATURE DESIGN
SELECTION AND LOW CHANGE
One cause of problems on the AWD program is
the fact that, unlike the Adelaide class and ANZAC
class vessels, the design baseline of the ship was
not sufficiently mature at the start of the project.
Design modifications are much simpler and more
cost effectively changed on paper well before they
ever get near a hull or manufacturing workshop.
Additionally, once the design has been baselined, all
change should be kept to a minimum.
What must be recognised here is that one of
the principal root causes of this problem lies fairly
and squarely with Government (where Government
includes the political leadership, who often weigh
into equipment selection on grounds ulterior to strict
defence capability procurement, and the Defence
leadership). It is the totality of government that makes
the selection, with inclusions of design changes
centring about ‘unique’ grounds, and then sets about
introducing change to the agreed design baseline.
A 09 May Article in The Australian entitled “Rebuff
for Navy on Super Warships” is instructive. “Navy
chiefs have been ordered to scale down their
demands that the planned future frigates be a fleet
of super warships twice as large and with twice the
firepower as the navy’s current Anzac frigates”.
It is interesting at this point to pause and reflect on
where the totality of government is taking the future
submarine project; down a concept (i.e . immature)
design pathway necessary to enable the submarine to
meet so called Australian ‘special’ requirements. One
must concede that using conceptual designs from the
experienced submarine design houses as the basis
for the CEP reduces risk to the project compared
to the previous ‘indigenous design’ proposition; it
may now come down to how resistant each CEP
contender will be at refusing to move from their
design comfort zone as they try to win the job (e.g .
shoehorning a nuclear powered submarine command
and control system into a conventional submarine that
would otherwise have a highly capable and totally
integrated combat system).
CAUSE TWO POOR PROGRAM
The AWD program has been criticized in the Winter
White report for its “alliance structure, which seemed
incapable to manage issues”.
Admiral Rickover, father of the [US] nuclear navy
and a most successful ship program controller, once
stated “Unless you can point your finger at the man
who is responsible when something goes wrong,
then you never really had anyone really responsible”;
a tenet seemingly lost within the Defence Department
and Government at the time.
The first Air Warfare Destroyer block to arrive in Adelaide.
28/05/2015 3:43 pm
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