Monday, January 18, 2021

Australian military’s $1.3 billion Hawkei contract criticisms revealed after previously sealed by the Attorney-General

Australian military's $1.3 billion Hawkei contract criticisms revealed after previously sealed by the Attorney-General

A scathing report into the Defence Department’s handling of a $1.3 billion dollar military contract has been fully released, nearly three years after the ABC exposed a high-powered legal effort to keep some details secret.

In 2018, the ABC revealed Thales Australia had applied for a Federal Court injunction against the Australian National Audit Office (ANAO) over a critical assessment of its Hawkei project to supply new armoured vehicles to the Army.

The French multinational arms company also convinced Attorney-General Christian Porter to use extraordinary powers to black out six sensitive paragraphs from the ANAO’s investigation into the light protected vehicle acquisition before it was published.

Thales was concerned about Auditor-General Grant Hehir’s finding that the Commonwealth could have saved hundreds of millions of dollars if it had instead stayed with the United States joint light tactical vehicle (JLTV) program.

In 2015, Thales had been awarded a sole-sourced contract by the Turnbull government to produce 1,100 locally built Hawkeis after successfully lobbying the Commonwealth to ditch the JLTV program.

Now the Administrative Appeals Tribunal has ruled the ANAO entire 2018 report into the Thales project can be publicly released, after a successful application brought by Independent Senator Rex Patrick.

In one previously unseen section of the report the ANAO concludes, “Defence has not clearly demonstrated that the acquisition provides value for money, as it did not undertake robust benchmarking in the context of a sole-source procurement.”

“Publicly available information suggests that the (non-audited) per-unit price difference between the Hawkei and the Joint Light Tactical Vehicle exceeds the price difference advised to the Government.”

Another previously redacted paragraph confirms that the ANAO advised Defence in August 2017 of its “preliminary finding that the Hawkei did not appear to represent value for money when compared to the Joint Light Tactical Vehicle”.

The Attorney-General has always insisted he agreed to censor sections of the ANAO report on “national security” grounds, but Senator Patrick says it is now clear Mr Porter made the wrong decision.

“What he chose to censor is criticism by the Auditor-General of the Defence Department’s failure to follow proper processes to ensure taxpayer’s got value for money in a $1.3 billion sole source acquisition contract,” Senator Patrick told the ABC.

“It is a totally inappropriate use of power. He wasn’t protecting national security, he was covering up bureaucratic incompetence.”

The ABC has approached the Attorney-General for comment.

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