Good practice in defence procurement

June 3, 2025

If only Australia would crib the defence document produced by the US Congressional Research Service in March, ignoring though its belligerence towards China. Pages 41-5 especially. It notes that project cost blowouts are often the result of failure to do an analysis of alternatives, and a business case (neither done for AUKUS), but projects become “too big to fail”.

Building subs in the US has a labour deficit due to the US economy’s switch from manufacturing, it says, and notes the depth of the resource and supply chain needed to build subs. The US has had to set up special labour training, and also partner, not contract, sub builders and contractors to manage their cash flow.

The report comments on whether Australia can be part of the US geopolitical stance, when Richard Marles has said we won’t automatically engage on Taiwan, yet AUKUS is posited on that. It wonders if we wouldn’t do better with a range of alternative defence outlays. In any case if we bought eight Virginia subs for US$42 billion all up at current prices we’d get them far sooner than drawing board AUKUS SSNs (US$384 billion). Yet our Vice-Admiral Jonathan Mead dismissed the report in our Senate as “academic”.