In this final report, the Joint Committee of Public Accounts and Audit considers the future conduct of the Defence Major Projects Reports, as well as issues raised in the ANAO’s audit of the Hunter class frigates program.

Failings in the procurement of the Hunter class frigates were clearly identified in the Auditor-General’s report yet only belatedly accepted by Defence after its own internal review. The Committee understands the significant pressure and risks that resulted from the then government’s sudden decision to accelerate the project and subsequent supply chain issues. Demonstrating value for money and compliance with the Commonwealth Procurement Rules (CPRs) are nevertheless non-negotiable requirements, particularly when expending tens of billions of dollars of taxpayer money.

It is simply inexcusable that no value for money assessment was ever conducted before the former government selected BAE for the then $35 billion project.

Five recommendations are made in relation to the Hunter class frigate program. Four of these request updates from Defence on changes arising from its internal review, progress with the project, how it will assess design maturity in the future, and the implementation and impact of its new recordkeeping framework. The Committee is also recommending changes to the CPRs that will explicitly require a value for money assessment in a tender evaluation plan as a default option and that the Department of Finance must determine and then advise the procuring entity whether this has been completed appropriately.

Key recommendations

• The Committee recommends that for future inquiries into Defence Major Project Reports the Australian National Audit Office provide a confidential submission regarding information required to be withheld from publication in Project Data Summary Sheets due to national security with appropriate handling procedures, and the Department of Defence organise confidential or classified briefings as required.

The Committee recommends that Commonwealth Procurement Rules be amended to explicitly require:

• that a value for money assessment must be included in a tender evaluation plan unless the accountable authority approves an exemption from this requirement, and
• that the Department of Finance must determine and then advise the procuring entity whether these value for money assessments have been completed appropriately.