Submarine-rescue system contract cancelled

Defence [not the relevant minister] has announced that a $255 million contract with Phoenix International Australia to build a new submarine-rescue capability has been terminated – three years after it was awarded and in the year before it was supposed to enter service.

FILE PHOTO: A C-130J Hercules overflies a Royal Australian Navy Collins-class submarine off the WA coast. Photo by Corporal David Gibbs.

An unattributed Defence statement said that in April 2018, following an open tender process, Phoenix International Australia was selected to deliver a deployable submarine rescue system for use with both the Collins- and Attack-class submarine fleets [though CONTACT notes this contract wasn’t announced until March the following year, when the it was, apparently, already faltering].

Following a series of delays in 2019 and 2020, the Department of Defence initiated an independent review of the project in August 2020.

Defence [not the minister] said the government had considered the outcomes and recommendations of the review and has agreed to terminate the contract with Phoenix International Australia by mutual agreement.

“The government has directed the Department of Defence and the Department of the Prime Minister and Cabinet to conduct a comprehensive investigation to inform lessons learnt into procurement practices and relevant accountabilities, which is underway.

“Defence will now work with Phoenix to reach settlement, which will include addressing arrangements with Phoenix and its subcontractors.”

Media speculation is that the contract cancellation will cost taxpayers multiple millions of dollars to get out of – and leave the ADF needing to start again on this vital-system procurement.

Defence’s statement on the subject claims the Royal Australian Navy retains a suitable submarine-rescue system supporting the Collins-class submarines – though, if it was truely suitable and not just an interim capability-gap filler, there’d be no requirement for a $300million replacement – nor an initial requirement to have the now-cancelled system delivered next year.

 

EDITOR’S NOTE: It is significant [at least to me] that Defence made this announcement rather than Minister for Defence Industry Melissa Price – especially since Defence currently issues almost zero press releases of any kind under the current regime. In fact, this wasn’t even a ‘press release’ – but a an ‘On the Record’ statement published on the Defence web site and nowhere else. I also note it was issued by “Ministerial and Executive Coordination and Communication”, not by Defence PR. I guarantee, if there was even a whiff of good news to be announced, Minister Price’s name would be all over this – but she’s very much hands off for the bad news.

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