Thread by @redunley

I have finally got out of teaching (on Australian naval ship design!) and had time to read the ANAO report on the Hunter Class frigate. A 🧵of few highlights and thoughts 1/
anao.gov.au/work/performan…

Firstly, there is some real light shone on the decision making process, and it doesn’t look great. In Feb 2016 the Defence Secretary noted that the Fincantieri and Navantia options were considered ‘the two most viable designs’ 2/

The report points out that there is no indication as to why the Type 26 was included as the third option on the final list instead of the French FREMM alternative – Defence has no records of the decision 3/

The tender compliance eval in Dec 2017 found Type 26 had “extreme risk” for core requirements of delivering 9 ships with minimum design change, and commencement of construction date. Other options had only high or medium risk. 4/

Decision to go with Type 26 was based primarily on ASW capability, however Defence was unable to locate the records of its key assessment against 23 high level capability requirements on which it based its decision 5/

Capability requirements did not include any reference to design maturity – but 2nd pass noted that ‘the design is not yet complete’. This issue was well known at the time. 6/

Surface Ships advisory Committee later stated that it was a case of the proposal with the highest risk, but also ‘highest potential for capability/performance’. i.e. this is a classic case of Defence procurement being driven solely by capability. 7/

Throughout the CEP there was a complete absence of any discussion of value for money – the ANAO savages Defence for this 8/

In terms of deadlines, a key element of the decision criteria was that building should be able to start in 2020. But Type 26 was always seen as having highest risk for this. 9/

The delay to the first of class have now pushed acceptance date from early 2031 to mid 2032. Notably the PBS stated that Hunters were to commission from 2031 – not sure if this suggests a poss capability gap even if deadlines don’t blow out further 10/

Major shift in date for change of RAN to a 9 frigate navy. Initially the 1st Anzac was supposed to retired on delivery of 2nd Hunter – meaning the RAN would be operating 9 frigates from mid 2030s – now that won’t happen till 2044 11/

In terms of cost a Defence internal estimate in Jan 2023 put the cost at ‘significantly higher than the $44.3 billion advised to govt’ 12/

The First Assistant Sec stated that the project ‘remains unaffordable within the Integrated Investment Program’ adding that it appeared BAE had ‘underestimated the combat system design, whole ship design and construction’ 13/

Head of Navy Capability said that cost overruns were ‘so significant’ that it was a case of reducing number of vessels or cutting other projects to fund Hunter 14/

Despite these issues Defence insisted to the ANAO that it was 'inappropriate' to provide a better estimate of the project cost… 15/

In terms of wider implications from this a notable issues raised was the lack of project management skills to run the acquisition. This poses a significant risk with AUKUS and a number of other major defence and shipbuilding projects in the pipeline 16/

There are also extraordinary failings of Defence record keeping. Minutes of the key Defence Committee meetings were ‘not retained’ – this is ‘the most senior enterprise level committee within Defence’. 17/

ANAO throws some wonderful shade on Defence a***covering in this footnote on the records provided 18/

All in all this is clearly a project that remains in real trouble. The likelihood of cuts to the program in the Surface Ship Review seems even greater after this report. The real question seems to be how much. End/