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.
-- 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.