The objective of the audit was to assess the effectiveness and value for money to date of the Department of Defence's acquisition of combat reconnaissance vehicles under project Land 400 Phase 2.
Why did we do this audit?
-- Comprising four discrete projects, and with an estimated combined program cost of $14–$20 billion for acquisition alone, Defence has described Land 400 as the biggest and most expensive acquisition program in the Australian Army’s history.
-- Land 400 Phase 2 was expected to address the risk of a capability gap emerging by 2020 in the Army’s ability to conduct its core business — sustained close combat.
-- This audit has been undertaken to provide the Parliament with independent assurance of Defence’s acquisition to date of combat reconnaissance vehicles (CRVs) under Land 400 Phase 2.
What did we find?
-- Defence’s acquisition to date of CRVs under project Land 400 Phase 2 is largely effective, and Defence has the potential to ultimately achieve value for money outcomes if the identified risks and issues are managed appropriately and the contracted quality and quantity of goods and services are delivered according to the agreed schedule and cost.
-- Defence’s request for tender process was partly effective.
-- Defence conducted a largely effective tender evaluation.
-- Defence has established largely effective project governance and contracting arrangements.
What did we recommend?
-- The Auditor-General recommended that Defence review the process for providing assurance to its senior leadership that agreed internal review recommendations have been implemented in a timely manner.
-- Defence agreed to the recommendation.
-- In August 2018, Defence signed a contract, valued at $4.28 billion (including GST), with Rheinmetall Defence Australia.
-- At second pass government approval in March 2018, Initial Operating Capability was scheduled for December 2022 and Final Operating Capability was scheduled for June 2027.
Click here for the full report (90 PDF pages), on the ANAO website.