Apparently they still can’t be trusted to build a canoe

FOI Documents released to Centre Alliance Senator Rex Patrick reveal that Defence Industry Minister Christopher Pyne, as he did for the Future Frigates when Defence tender documentation precluded ASC from taking responsibility for the build, has handed complete control of the build of the Future Submarine to the French company Naval Group.

“It appears as though the Coalition still thinks that the company can’t be trusted to build a canoe,” said Rex.

“In the face of Naval Group’s preparedness to partner with ASC for the submarine build, Minister Pyne has stabbed ASC’s workers in the back. He should resign or be sacked.”

In a letter written in May 2017 to the head of DCNS (now Naval Group), Minister Pyne stated that “The Government of Australia has formerly decided that DCNS will be the builder of the future submarine fleet, which will be constructed in Australia as previously announced.”

In writing to DCNS, Minister Pyne made it absolutely clear that DCNS will have “operational control of the [Government funded] future submarine program shipyard facilities” and “will be responsible for selecting and managing its subcontractors for the for the purpose of Future Submarine Program.”

Minister Pyne’s decision flew in the face of DCNS’s longstanding interest in partnering with ASC.

DCNS’s November 2015 tender submission to the Australian Government’s Competitive Evaluation Process (CEP), used to select Australia’s future submarine design partner, made it very clear that they wished to partner with ASC in the build. This was an absolutely sensible thing to do nothing, as confirmed by ASC CEO Stuart Whiley at May Estimates, ASC has a talented workforce which includes about 300 people who were involved in the build of Collins and that, by contrast, Naval Group had no presence in Australia at the time (they still only have less than 100 people).

In the months after the CEP decision was made, Naval Group reaffirmed its commitment to use ASC in the build, offering to form a joint venture partnership.

“Although the relevant correspondence is heavily redacted, it is my strong understanding that DCNS had a keen interest in partnering with ASC,” said Rex.

“It’s now clear, however, that Minister Pyne was having none of that. In May 2017 he abruptly betrayed Australia’s premier shipbuilder and cut them out of the deal.”

“How can Pyne look ASC managers and workers in the eye? They did a great job in the build of Collins and have built the third Air Warfare Destroyer with a 60% productivity improvement from ship 1 to ship 3,” said Rex. “Sure, the company has had its problems, but the managers and workers at ASC have done a fantastic job at turning things around over the past few years. The company is now performing to world benchmarks.”

“Instead of building on the hard won success of ASC, he has secretly been working to sink them,” said Rex.

“The decision to go with Naval Group as the builder this early in the game is commercially naive and one that could only have been approved by a Minister who has spent most of his working life inside the commercially sheltered environment that is the Parliament.”

“It’s like engaging an architect to build your house and before you’ve fully developed a relationship with him or her, before you understand the design of the house or the price, you sign a contract for him or her to do the build. It’s a seriously dumb thing to do.”

“Noting what he has done, Minister Pyne isn’t fit for his responsibilities. He should release the FOI documents in full, without redactions; and then he should resign. That would be the only honourable thing to do considering the way in which he has betrayed a great South Australian company.”

NOTE: The letters provided under FOI were originally set to be released by the Defence Department in the week before super-Saturday. Just before the FOI deadline Defence wrote to Senator Patrick advising they needed a little bit of extra time. The letters were released by Defence on Monday, two days after the Mayo by-elections.

Copies of the letter and further background information can be accessed here:
Centre Alliance Senator Rex Patrick