Defence’s Procurement of Offshore Patrol Vessels — SEA 1180 Phase 1
(Source: Australian National Audit Office; issued Oct. 12, 2020)
The National Audit Office says that, so far, Australia’s has been “largely effective” in managing the OPV program, and looks likely to achieve “a value for money outcome” with its procurement of 12 vessels at a cost of A$3.58 billion. (ANAO image)
Why did we do this audit?
-- Defence’s SEA 1180 Phase 1 Offshore Patrol Vessel (OPV) program is intended to enhance the Australian Defence Force's maritime capability and is one of three interrelated elements of the Australian Government's 2017 Naval Shipbuilding Plan.

-- The Government’s requirements to split OPV construction between two shipyards, and a compressed build schedule, pose challenges to Defence in managing program risks.

-- The OPV program was last examined in Auditor-General Report No.39 2017–18 Naval Construction Programs—Mobilisation, which found that Defence carried several risks into the OPV acquisition as a consequence of the compressed schedule.

Key facts
-- Defence is acquiring 12 new OPVs and associated support systems for the Royal Australian Navy through SEA 1180 Phase 1, at an approved cost of $3.58 billion.

-- On 31 January 2018, Defence signed a $1.988 billion (GST-exclusive) contract for the design and build of the OPVs with Luerssen Australia Pty Ltd.

What did we find?
-- To date, Defence’s procurement and contract management of the OPV program have been largely effective and have supported the achievement of a value for money outcome.

-- Defence conducted a largely effective platform selection process which supported the achievement of a value for money outcome.

-- Defence has largely established fit-for-purpose contracting and program governance arrangements for the OPV program.

-- Defence’s OPV program has been largely effective to date in making progress against its milestones and has contributed to delivery of the wider Naval Shipbuilding Plan.

What did we recommend?
-- The Auditor-General made two recommendations aimed at: improving Defence’s processes for the effective sequencing of Independent Assurance Reviews; and retaining evidence and advice regarding decision-making in procurement.

-- Defence agreed to both recommendations.

Click here for the report’s home page, on the ANAO website.

Click here for the full report (99 Pdf pages), on the ANAO website.


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