At the National Press Club in Canberra on 27 September 2017, Hugh White, Professor of Strategic Studies at the ANU, launched an independent report by Insight Economics on Australia’s future submarine (FSM). The report, Australia’s Future Submarine: Getting This Key Capability Right, was commissioned by Gary Johnston, a Sydney businessman and owner of the website, submarinesforaustralia.
This final post (of three) focuses on the criticisms of our report and our response to them. The main substantive, as opposed to ad hominem, criticisms are around:
- The report’s finding that the competitive evaluation process for the FSM was deeply flawed
- Our proposal to acquire a modified military off-the-shelf (MMOTS) submarine as an interim solution to avoid a capability gap and provide insurance should the FSM design be unsatisfactory
- Our proposal for the acquisition of a submarine tender ship to reduce the transit time experienced by RAN submarines, increase productivity and act as a force multiplier.
These are considered below.
The competitive evaluation process (CEP)
In our report, Insight Economics made some major criticisms of the CEP. In response, Minister Pyne said:
“The Future Submarine competitive evaluation process was overseen by an independent expert advisory panel chaired by former US navy secretary Don Winter and peer-reviewed by former senior submarine program managers from the US — retired US Navy vice-admiral Paul Sullivan and rear admiral Thomas Eccles. In addition, the Australian National Audit Office has also ticked off on the process.”
Regardless of who ‘ticked off’ on the CEP, the fact is that it was a novel process that enabled Defence to evade every single hurdle that had been established, as a result of several expert inquiries, to reduce the chances of further acquisition disasters like the Super Seasprite and Tiger helicopters, as well as the FFG upgrade. They did not run a competitive process between two or more contenders to produce a project definition study (PDS) and a fixed price tender. They weren’t required to have a MOTS alternative as a reference point. Because the government was choosing a design partner rather than a platform, all these checks and balances could be set aside.
But while ostensibly the process was to select a design partner, all the publicity around the announcement of the success in the CEP of the French company DCNS (now Naval Group) was about the design concept for a particular platform. The Shortfin Barracuda would be what the previous Defence Minister, David Johnston, said he wanted – a nuclear submarine with diesel engines. The nuclear version of the platform, we were told, would be converted to diesel-electric propulsion. Like nuclear submarines (SSNs), it would also have pump jet propulsion rather than propellers, which, according to a DCNS advertisement, were now obsolete. This apparently gave the French submarine a significant advantage over the German contender, which was said to have an unacceptable acoustic signature. This came as a surprise to the Germans, who pride themselves on the quiet operations of their submarines and who were only advised of this after the completion of the CEP, with no opportunity to respond.
Since the announcement of the Shortfin Barracuda the story has changed significantly. First, the submarine will not, after all, be an adaptation of an existing SSN but will be an all-new design. We are also advised that pump jet propulsion may be discarded in favour of a propeller. Since the pump jet was a major selling feature of the Shortfin Barracuda, this, if true, adds further significant doubts to the integrity of the CEP.
Acquiring a MMOTS submarine
We have been criticised for proposing to acquire MOTS submarines modified for a longer range. The criticism centres on the view that adding additional range is more complicated than it seems and removes the main benefits of a MOTS acquisition while adding risk.
We acknowledge, to some degree, the validity of these criticisms. However, additional range is not critical to the MOTS acquisition and not just because our proposed tender vessel would significantly reduce transits. The MOTS submarines would have air-independent propulsion and/or Lithium-Ion batteries. Both of these technologies effectively provide additional range for the same amount of diesel fuel. In the competitive tender process additional diesel fuel bunkerage could be a desirable feature that would be worked through in the competitive project definition study process but would only be specified if low risk.
Another criticism relates to the option of building the MOTS boats in Adelaide. The same industrial risks would apply to building the MOTS boats there as to the FSM, and given that Naval Group is finding it difficult to recruit sufficient tradespeople to meet its own requirements for the FSM, it may well be that there would be insufficient resources to be building two different submarines at the same time. Although contenders should be asked to provide a tender price for building the MOTS boats both in Adelaide and overseas, it may well make more sense to build them overseas, where the risks would be lower and the cost for six boats should be no more than $6 billion. There would be no impact on the FSM, which on present plans would still be built in Adelaide.
Removing the expectation that the MOTS submarines would necessarily be built in Adelaide could also bring the Japanese Soryu back into play. We now propose a three-way funded PDS and fixed price tender process between submarine builders from France, Germany and Japan.
Acquiring a submarine tender
Our proposal for a submarine tender ship has been criticised mainly on the grounds that it would be vulnerable to attack in wartime. This is true, but the same argument applies to all surface ships in general and in particular to other naval support vessels. In the event of any conflict, the submarine tender could be withdrawn to the mainland but still operate from harbours in northern Australia, much closer to areas of operations than Fremantle. It could also be designed to deploy a battery of ESSM point air-defence missiles and the accompanying systems.
Finally, it is worth recording that projects of this nature are extremely difficult to undertake, not only because of their extreme complexity from a technical perspective but also because much of the necessary information resides within Defence. Some of it is classified and not all unclassified material is readily available in the public domain. This may be why the media in Australia generally fails to hold government and the Defence department to account even when many billions of dollars of taxpayers’ money are at risk.