The objective of this audit was to assess the effectiveness of Defence’s design and implementation of arrangements to select a preferred Strategic Partner for the Future Submarines Program.

Background

1. In February 2015, the Government announced an acquisition strategy for Australia’s Future Submarine, involving a competitive evaluation process.1 The Future Submarine will replace the Royal Australian Navy’s six Collins Class Submarines which, without an extension to their service life, are due to be withdrawn from service by 2036.

2. The competitive evaluation process was not aimed at eliciting and assessing a full design for the Future Submarine, or identifying firm cost and schedule data. These processes will be undertaken with the successful international partner subsequent to the competitive evaluation. Direction de Constructions Navales Services (DCNS) of France; ThyssenKrupp Marine Systems GmbH (TKMS) of Germany; and the Government of Japan participated in the competitive evaluation process. The Australian Government announced DCNS as the successful International Partner on 26 April 2016:

DCNS of France has been selected as our preferred international partner for the design of the 12 Future Submarines, subject to further discussions on commercial matters.2

3. The objective of the audit was to assess the effectiveness of Defence’s design and implementation of arrangements to select a preferred international partner for the Future Submarine program (SEA 1000). To form a conclusion against the objective, the ANAO adopted the following high-level audit criteria:

Defence designed a fit-for-purpose process for evaluating and selecting an international partner for the Future Submarine program, and to support the establishment of a sovereign capability to sustain the Future Submarine Fleet.

Defence effectively implemented the agreed evaluation process to select an international partner for the Future Submarine program, and to support the establishment of a sovereign capability to sustain the future submarine fleet.

Conclusion

4. Defence effectively designed and implemented a competitive evaluation process to select an international partner for the Future Submarine program.