Minister for Defence - Expert Advisory Panel on the Future Submarine Competitive Evaluation Process

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The Hon Kevin Andrews MP

Minister for Defence

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5 June 2015


Thank you ladies and gentlemen.

With France, Germany and Japan now having confirmed their participation as potential international partners in the Australia’s future submarine programme, the Government today announces the establishment of the Expert Advisory Panel, which will oversee the competitive evaluation process.

The Expert Advisory Panel will assure the Government that the competitive evaluation process remains sound, is conducted in accordance with probity and accountability principles, and that participants have been treated fairly and equitably.

The members of the Expert Advisory Panel are:

• Professor Donald Winter, who is a former Secretary of the United States Navy;

• The Honourable Julie Anne Dodds Streeton, a former Justice of the Federal Court of Australia;

• Mr Ron Finlay, one of Australia’s leading infrastructure specialists with very extensive legal experience; and

• Mr Jim McDowell, who was a member of the First Principles Review team with very extensive Defence experience.

Collectively, these advisers share experience in complex military acquisition programs, legal and probity matters, and major projects.

As noted earlier this year, Defence advises that Australia will need an international partner to deliver the future submarine programme and that a competitive evaluation provides the best opportunity for Australian industry to maximise their involvement in the programme without compromising capability, cost, schedule or risk.

The Government expects that significant work will be undertaken in Australia during the build phase of the future submarine including combat systems integration, design assurance and land based testing. This will result in the creation of at least 500 new high-skilled jobs in Australia, the majority of which will be based in South Australia.

I note that over the last few days that there has been a suggestion by the Labor Party and Senator Xenophon that the Competitive Evaluation Process being conducted by the Department of Defence is not robust.

To the Labor Party, let me say this:

The Labor Government, the previous Labor Government under Mr Rudd and Ms Gillard, risked critical capability gaps by refusing to make a decision on the replacement for the existing Collins class submarines for six years.

In fact, the previous Labor Government didn’t commit to building a single naval ship in Australia in their six years in Government – not one.

They cut the Defence budget by $16 billion – reducing Defence expenditure to the lowest percentage of GDP since 1938.

Their poor management led to 119 defence projects being delayed, 43 projects being reduced and eight projects being cancelled all together.

Under them, Australian defence industry shed more than 10 per cent of its workforce because of budget cuts and deferrals, procrastination and lack of opportunity for Australian suppliers.

And Labor is also responsible for what is now widely known as ‘Labor’s Valley of Death’ in the shipbuilding industry and creating job losses and uncertainty for the shipbuilding workforce in this country

In contrast to what Labor failed to do over six years in Government, we are now acting responsibly.

We are putting Defence expenditure back on track towards two per cent of GDP.

We are working to reduce the impact of ‘Labor’s Valley of Death’ in the shipbuilding industry.

We are ensuring that Australia obtains the most capable conventional submarines in the world while avoiding a capability gap after the current Collins class submarines.

We got a clear pathway to maximise Australian involvement in the Future Submarine Programme.

And I’ve now appointed an Expert Advisory Panel to ensure probity in this process is maintained.

Put simply, the first priority of this Government is the safety and security of its citizens. And that’s something that when we say that, we mean it.

Any questions?


How long does this panel have to report back?


The Panel will report back at the conclusion of the process but in the meantime they will provide interim reports to me. They will also be available to Defence if they wish to ask question of them to ensure that the process, which is being undertaken is undertaken in a proper way.


Will this take weeks, months or years?


Well the panel will be in place immediately and this competitive evaluation process is due to have the bids finalised by the three potential partners – Germany, France and Japan – by the end of the year. In the first part of next year we expect to make a decision about the preferred international partner.


Is that too long a time line given more uncertainty to the submarine industry, particularly in South Australia?


Well the uncertainty to the shipbuilding industry in South Australia comes about because of six years of inaction by the previous Labor Government. This is a timeline, which the Defence Department advises me is an appropriate timeline. It’s a timeline, which gives each of the industries, and the Governments of the three countries concerned, time to put together the material for their bid and for us to then make an assessment of it.

Thanks you very much.


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