We’ve all seen reports of Defence acquisition costs blowing out (PDF 6.55MB), of programs slipping to the right (in other words, being delayed), of capability requirements not met. Is it really as bad as this, or is this a case of perceptions being incorrect? If it is as bad as the popular press is making out, then what is the problem, and how should it be addressed?
Let’s think about some of the major acquisitions or upgrades that have taken place over the last few years. There was the purchase of the Manoora and Kanimbla, two ships that had significant rust and came into service late and well over budget. We have had the Super Seasprite debacle, which many in industry warned Defence about years ago. A billion odd dollars later, it appears that the project will be scrapped. Then there’s the fast frigate (FFG) upgrade, years overdue and also way over budget. There is also the ARH (Tiger attack helicopter) that was supposedly an off-the-shelf system, yet it’s late and the specified requirements still have not been met.
And that is before we even get to the most expensive purchase in Australia’s history, the New Air Combat Capability (NACC) …
Defence tends to acknowledge problems in the past (if they didn’t, there wouldn’t even be the pretence of being reasonable), but they also go on state that the problems are in the past, and that things are now on track. The problem is the present (and future) tends to replicate the past. Yet, when Defence gives these assurances that all is well, they tend to be believed again and again. This is not just an issue for the Government; the Opposition is fed the same story, with the same result.
The Australian National Audit Office (ANAO) tends to be the only organisation that holds Defence to account through detailed studies. Yet Defence holds this body in contempt and suspicion. Defence often pushes the line that ANAO does not have the requisite detailed understanding of the complexities to analyse their programs correctly.
There is also an inherent problem in the funding model applied to the Defence Science and Technology Organisation (DSTO), in that the funding for research is under the direction of various two-star officers. As such, DSTO is not truly independent of their Defence masters - research efforts and direction are not as independent as they should be. I understand this model came about so that the research undertaken by DSTO would remain relevant to Defence requirements. While I applaud the reason for this policy, it does not serve us well. How can DSTO provide frank and fearless advice when some of the research activity they should conduct is not funded?
New Air Combat Capability - the F-35 Lightning II
The NACC provides a good illustration of how all of the above factors can go wrong at once. This is an acquisition that will cost each man, woman and child in Australia about $1,000 each!
As Project AIR 6000, DSTO Air Operations Division was to conduct a comparative analysis of the various contenders. They had barely set up an analysis methodology before Defence recommended to Minister Hill that the JSF was the appropriate capability for Australia. Minister Hill accepted that advice, and from that moment analysis of all other contenders was “switched off”. A mere semblance of a watching brief has followed since.
There were analysts and other interested parties that were concerned about this decision. They voiced their concerns both on the fundamental capability questions and the risks that were likely to eventuate from this program. The Defence leadership not only did not accept or listen to the criticism, they were very aggressive in their approach and at times used ad hominem attacks on those criticising the decision.
At that early point they decided to “situate the appreciation” as opposed to the desirable (in fact essential) process of “appreciating the situation”. What this means is that the Defence leadership decided that the JSF was the answer, and then built up the question premised on this required outcome.
Early on, for example, the conventional take-off and landing (CTOL) F-35 variant that we opted for only had space in the internal weapons bays for 1,000 lb weapons, as opposed to the 2,000lb internal weapons capability in the F-111. As the Defence leadership had decided to kill the F-111, they stated at the time that the 1,000lb JDAM and the small diameter bomb could do all of the jobs required, and the 2,000lb capability was not necessary.
Fast forward a few years, and the CTOL JSF now has a 2,000lb class weapons bay, even though we don’t yet know which 2,000 lb weapons it will be able to safely eject. Much criticism has pointed to the F-22 as the better solution for Australia, compared to the JSF. The F-22 does only have a 1,000lb class internal weapons bay. Result? Suddenly, the ability to carry 2,000lb weapons internally becomes important.