An audit of the Department of Defence’s procurement and contract management of its Offshore Patrol Vessel (OPV) program has found the Department to have been largely effective and supporting the achievement of a value-for-money outcome.
Following his audit, Auditor-General Grant Hehir 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.
Mr Hehir said Defence was acquiring 12 new OPVs and associated support systems for the Royal Australian Navy at an approved cost of $3.58 billion.
Three OPVs were under construction as at September, in two shipyards with a 59 per cent Australian industry content commitment reported to have risen to almost 63 per cent.
“The OPV program is intended to enhance Australian Defence Force maritime capability and is one of three interrelated components of the Australian Government’s Continuous Naval Shipbuilding program,” Mr Hehir said.
“The Government has identified the OPV program as having an important role in mitigating identified risks to workforce continuity at the Osborne shipyard [in South Australia].”
The audit concluded that Defence had conducted a largely effective platform selection process which supported the achievement of a value-for-money outcome.
“Defence surveyed the market for an appropriate OPV design and implemented a well-documented process to select three designs for detailed evaluation,” Mr Hehir said.
“Defence has largely established fit-for-purpose contracting and program governance arrangements for the OPV program.”
The Auditor-General’s report can be accessed online at this PS News link and in a 99-page printed document at this link.
The Audit team was Esther Barnes, Leo Simoens, Alex Wilkinson and Sally Ramsey.
