The federal government has finalised an audit to quantify Air Warfare Destroyer (AWD) program cost and schedule overruns, concluding that the project will require an extra $1.2 billion to be completed.
And now, a limited tender process will begin on May 29 to seek proposals to either insert a managing contractor into AWD shipbuilder ASC for the remainder of the build, or to enhance ASC’s capabilities through a partnering arrangement.
Minister for Defence Kevin Andrews and Minister for Finance Senator Mathias Cormann stated that delivery of the three ships for the Royal Australian Navy (RAN) has been significantly delayed, with the first Hobart class destroyer not due to be delivered until June 2017.
“The Air Warfare Destroyer project was in very bad shape when we came into government, which is why we initiated an independent review into the project,” the ministers stated. “Since then, the government has initiated a series of interim reforms recommended by that review to put the Air Warfare Destroyer project back on track, pending the completion of this forensic audit.
“So far, the government has made improvements to the senior management at ASC Shipbuilding, and inserted additional shipbuilding and related capability from Navantia, BAE Systems and Raytheon Australia.”
They added that although these initial steps have led to significant improvements in labour use and productivity, there is more work to be done.