Australian Senate inquiry into Defence procurement problems

A Senate inquiry will focus on time and cost overruns and a perceived lack of transparency in the Defence Material Organisation (DMO) after a series of significant procurement problems.

It will be the third inquiry into procurement in the past three years.

The DMO buys everything from basic stationery to submarines for the Australian Defence Force, with Greens Senator Scott Ludlum and Liberal counterpart Helen Kroger this week triggering the inquiry.

The move comes after the recent botched $40 million Landing Craft Mechanised (LCMs) project which did not fit on to their amphibious ships.

In December, the Sydney Morning Herald also revealed that the new fighting vehicles for elite soldiers had been plagued by poor electronics and were too heavy for army helicopters. They are still not used in Afghanistan, despite being bought more than two years ago for nearly $50 million. 

The most troubled project is the navy's $4 billion multi-role helicopter, which has been marred by engine problems, and is the subject of a high-level review.

The DMO's most recent annual report showed that of the top 30 projects on its books, only eight are on time.

The Defence Minister, Stephen Smith and the Defence Material Minister, Jason Clare, refused to condemn the hierarchy of the DMO when discussing these problems, however recognised that there were serious “institutional” problems in Defence.

"This is an area that requires continuous improvement. There's been some good work done in this area, but there is more work to do and the Minister for Defence and I are working on the next stage of reforms," Mr Clare said.

"I welcome the committee's work in this area and I look forward to working with them," he said.

Mr Smith recently told senior Defence officials that big projects were being poorly handled and that government was being deprived of vital information by the sprawling organisation.

The members of the Foreign Affairs, Defence and Trade Senate sub-committee will study public submissions to the inquiry, and then travel around the country holding hearings into the workings of the bureaucratic behemoth.

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