The Collins Submarine Development Scandal (1999-2000)

Subs Are Out Of Depth The Sun-Herald 20/2/2000
$500m To "Save Our Subs" The Australian2/7/1999
Defence Management Out Of Its Class
Sub-Standard To Off The Shelf

Subs Are Out Of Depth
By Fia Gumming The Sun-Herald, February 20th, 2000

STAINLESS steel welded pipes used throughout the new Collins class submarines could corrode and collapse in a deep dive.

As a result, four of the billion-dollar submarines have been put under restricted operations.

The Defence Department has admitted that all of the suspect piping on the first of the submarines, HMAS Collins, has been secretly replaced.

But because of the scale of the job, the Navy's other two submarines will not be fixed for some time.

"Some accessible piping ha been replaced in these submarines," the Department said in response to questions from The Sun-Herald. "As each submarine undertakes its post delivery (maintenance) docking the remaining pipework will be replaced."

In 1963, the US Navy submarine Thresher was lost at sea with all crew due to a pipe failure.

The 1998 Auditor-General's report on the Collins project highlighted the high risk posed by the faulty pipes. It said the Federal Government, not the Australian Submarine Corporation (ASC) —the private company building the submarines — would be held responsible for "consequential loss of or damage to a submarine" because of faulty welds.

The auditors said the ASC had chosen the pipes although Collins specifications banned stainless steel in any pressure boundary.

They said the Navy raised concerns about the pipes as early as 1990. Tests in 1995, 1996 and 1997 had confirmed that some of the seam-welded pipes were "high risk". But the Navy's submarine project office left it to the ASC to remedy the problem.

The Sun-Herald also revealed recently that serious corrosion was found in three vital valves of HMAS Collins just before Christmas.

The submarines have been plagued by noise problems, engine failure, propeller cracks and an inoperable weapons system.

Of the six ordered, only three have been delivered to the Navy and none is considered fully operational.

The submarines' total cost is put at more than $6 billion, compared to the $3.9 billion stated in June 1987 when they were commissioned by the Hawke Government.

$500m To Save Our Subs: Minister Orders Project Overhaul
by Robert Garran (Defence writer)

TAXPAYERS face a $500 million bill to replace fatally flawed computer combat systems in the Collins class submarines, and the Government has agreed the $5 billion defence project needs a complete overhaul.

A report to Defence Minister John Moore yesterday outlined excessive noise, cracking propellers, vibrating periscopes that do not focus, faulty communications and a computer combat system that will never work properly.

"Not only has no submarine yet gone to sea with anything like its full complement operational capabilities, but each invariably returns with even less. The rates of failure are far too high,"

the independent report, by CSIRO head Malcolm Mcintosh and former BHP chief John Prescott, found.

Dr Mcintosh illustrated the complexity of the system last night, saying:

"The sorts of things you can do by clicking your mouse on one icon of a personal computer at home can take 49 keystrokes on the current combat system."

Mr Moore acted immediately, announcing a far reaching shake-up of the Defence Acquisition Organisation, foreshadowing a new head, junior only to the Defence Secretary, and a more senior officer to head the troubled submarine project.

The report found circumstances would have to be "extremely serious indeed" to risk sending the submarines into action in their present state.

Mr Moore said the Government would immediately allocate $80 million for a computer solution system, prepared by the US Navy, to provide an interim fix and get two submarines fully operational by early next year.

The report says a completely new combat system should be installed as soon as possible.

Mr Moore told The Australian that could cost between $500 and $600 million. "It's a big hit and it's all extra (to the $5 billion budget)," he said. Cabinet had been told of the likely cost, some of which may have to come from cuts to other defence programs, Mr Moore said.

But Australia could still have the world's best submarines if it fixed the problems, he maintained.

The Collins class submarines are one of Australia's biggest defence and industrial investments.

They were commissioned in the 1980s and the first signs of problems emerged in 1993, although the report found the difficulties had been known about earlier.

It accuses each party involved in the Collins project of having a bunker mentality — the Navy, the project office, the in-service support team, the ASC and the principal subcontractors.

All were "certainly far more antagonistic, defensive, uncooperative and at cross-purposes than should be the case in a project like this" the report says. But, despite all the problems, "we have found few design deficiencies for which a remedy is not fairly readily available, although some will be substantial and costly"
"Once the deficiencies are remedied, the Collins class has the potential to be an extremely potent strategic and tactical defence asset for Australia, which should serve the country well and retain a technical edge, with periodic upgrades, for decades."

It is unclear how much of the cost of the failings will be borne by the contractor and how much by taxpayers.

The $5 billion budget for the project is so far unchanged, except for currency and cost changes, since the contract was signed in 1987.

Mr Prescott said the Government had good reasons at the time for entering a fixed-price contract.

"In those days, the Commonwealth and every other major buyer was getting screwed on cost-plus contracts, so they said they were going to have a fixed-price contract, and we're going to hold to it.
"They really drove that philosophy pretty hard, but that constrains what changes you can make."

Defence management out of its class
by Robert Garran (a Defence writer)

THEY'RE not dud subs; in fact, they will eventually be world beaters, but the management of the Collins submarine project has been a debacle. That, in essence, is the message of the Mcintosh-Prescott report, released yesterday.

The report gives a lucid and damning account of the project's troubles. It also charts a course to resolve them.

Broadly, the project's problems are twofold: technical and In Its management.

And, while the half-billion dollar bill for repairing the problems is significant, perhaps even more important is the shake-up it proposes in the management of defence projects.

Providing the rationale for this shake-up has always been a key motive for John Moore in calling for an Independent report.

The fact that he sought outside advice was a reflection of his lack of confidence in the Defence hierarchy.

Report authors Malcolm Mcintosh and John Prescott have given Mr Moore exactly what he wanted.As a senior government source said yesterday:

"Defence has not been brought to book for more than a decade."

Neither the technical nor the management failings of the project can be sheeted home to any one factor or individual.

It says there have been serious failings in key aspects of the projects management and accuses Defence and its contractors of undue rigidity.

As the report makes it clear, the project has also been a victim of its own ambitions.

It was conceived at a time when major defence and civilian projects had come under fire for big cost overruns and, as a result, Defence was determined to adhere to its fixed-price contract.

But this led to an unduly rigid response to technological changes since the contract was signed in 1987. In particular, the advances in computer technology meant the specifications for the submarines' combat system have become an unwieldy anachronism.

Twelve years later, the need to replace the combat system has become a serious and costly problem for. the submarine project, the Defence Force and the Government.

Sub-Standard To Off The Shelf
by Patrick Walters

THE billion-dollar combat system developed for the Collins class submarine does not work and should be scrapped, the McIntosh-Prescott report says.

So serious is the problem, the authors say Australia's strategic circumstances "would have to be extremely serious indeed to risk the submarines in their present state".

Fixing the combat system is the principal technical challenge that must be overcome if the navy is to have fully operational world-class submarines.

The report recommends as a first step the removal of the combat system from the prime contract with the submarine builder, the Australian Submarine Corporation, and then tendering for a wholly new off-the-shelf system.

The Defence Department faces an additional bill for a new combat system for the six Collins class boats that could run into several hundred million dollars.

As an urgent priority, the Government will spend an extra $80 million on a joint RAN-US Navy plan to help rectify key software problems associated with the combat system as well as other mechanical defects.

"The essential and the visible problem with the Collins class submarines is that they cannot perform at the levels required for military operations," the report says. "The level of performance achieved with the combat system to date is unsatisfactory and this situation will not be resolved unless new commitments are made to change the present direction."

Dr Mcintosh and Mr Prescott said an interim fix on the existing combat system developed by Boeing was just a "short-term band-aid" to get some necessary capability quickly and that modifications being made to the contracted system would not lead to a satisfactory outcome.

"Put simply, the Boeing system being installed cannot be transformed to an effective performance level without much of the software and some of the hardware being replaced or superceded."

The challenge was to keep the submarines in service while the software package and some hardware was progressively updated.

"A preferred new system would be configured with less-integrated architecture and would utilise more robust commercial off-the-shelf equipment," the report says.

It says new tenders could be called specifying only proven in-service systems that could be installed relatively quickly.

"It should be possible to recover some of the cost from the present contractors, as a share of what is left to pay and as compensation for failure to deliver to time and cost, and the damage that failure has done to the navy."

The report concludes:

"The submarine project requires a much stronger commitment and involvement by the navy from now on, which would bring together procurement, in-service support, the personnel authority and the operators."