Today, The AFR and The Australian are reporting that the Coalition’s submarines policy is in a state of confusion after Prime Minister Abbott promised South Australian senators that the Australian Submarine Corporation (ASC) would be allowed to compete in a “competitive evaluation process” for the submarines contract, in exchange for their support at Monday’s leadership vote.
The side deal reversed the Government’s previous policy, which dictated that the contract for the subs would not be put out to a competitive open tender because the Government doesn’t “have time to go through a speculation process”, and has caused confusion amongst Coalition ministers.
According to The Australian, Finance Minister, Mathias Cormann, has repeatedly insisted the Government’s policy on procuring the submarines had not changed following the Prime Minister’s deal. Likewise, Defence Minister, Kevin Andrews, has struggled to explain the meaning of the new “competitive evaluation process”, and refused to answer questions about who invented the “competitive evaluation” terminology.
According to the talking points prepared for Coalition members by the Prime Minister’s Office:
“Decisions on a design partner and construction of the submarines will be based on a competitive evaluation process managed by the Department of Defence that takes fully into account capability requirement, cost, schedule, technical risk and value for money considerations”…
“Any Australian company that can credibly meet these criteria will be considered on merit, as will potential international partners.”
Regardless of the terminology used, the Prime Minister’s backflip over submarine procurement, which has allowed ASC to compete openly for the contract, is a good outcome.
A competitive tender is the only way to ensure that Australia gets the best submarines at the best price. Moreover, given the submarines are unlikely to be delivered for another decade, there is ample time to find an appropriate supplier that provides the best deal for taxpayers.
Excluding ASC from tendering for the new subs was always stupid policy, and Abbott’s deal with the South Australian senators rights the wrong, even if the decision was based on his own self-interest.
