Chris Walton has called for urgent action to prevent further cost-blowouts.
Professional Engineers Australia has called for the Minister for Defence to urgently review and invest in Commonwealth engineering capacity on the Australian Warfare Destroyer (AWD) and the Future Submarine (SEA1000) projects, after a damning Australian National Audit Office (ANAO) report found systemic failures have already resulted in a $300 million cost blowout on the $8.455 billion AWD project.
Professional Engineers Australia CEO Chris Walton said the ANAO report identified a range of problems that stemmed from the failure of the Commonwealth Government to invest in its own professional engineering capacity in the Defence Material Organisation (DMO).
Mr Walton said the ANAO findings showed that DMO, in its role as the government organisation charged with purchasing the AWD project, did not have sufficient capacity to oversee the project and as a result, the government had been rendered an “uninformed purchaser”.
“Without enough professional engineers, DMO can’t properly oversee AWD and SEA1000. In the end this means the Commonwealth pays a lot more, has to endure delays and wastes taxpayers’ money in the process,” said Mr Walton.
Mr Walton explained that currently only 95 of the +1900 AWD workforce were Commonwealth employees.
“It is difficult to imagine how five per cent of the workforce can effectively safeguard the Commonwealth’s interests on such a complex project.
“These cost blowouts show how expensive it can be when governments fall short on investing in engineering capacity, but there are also increased risks, more waste, more delays and failures.
“Not investing in engineering is penny wise, pound stupid. Any investment in engineers will repay itself many times over.”
“It's time to bell the cat on the stupidity of saving $1 on engineers when it costs the government $10 in project costs – rework, delays, project blowouts.”
However, Mr Walton said this situation was the responsibility of the Minister of Defence David Johnston to fix.
“The Minister needs to lift the government’s recruitment freeze and increase investment in engineering capacity so DMO can hire the engineers it needs to get the AWD and SEA1000 projects on track and avoid future cost blowouts or project delays.
“These projects need more engineers who know how to properly scope, design and deliver the ships and submarines that will serve our country for years to come.
Design Acceptance Representatives
The ANAO report also detailed the critical role and responsibility of Design Acceptance Representatives to scrupulously check and approve work at all stages of production. However, the report found that under current arrangements these roles were “not necessarily Commonwealth employees” (par 3.55).
“Given the critical nature of this work now, and for the working life of the AWD, we call on the Minister to ensure that all Design Acceptance Representatives are Commonwealth employees.
Engineers have reported that ASC accepted, unseen, the Chinese-made copper pipes mentioned in the Adelaide Advertiser article (6 March) on the basis of a provided Certificate of Compliance. Professional engineers report this acceptance of materials, unseen, as “naïve”.
Professional engineers have advised that if ASC had undertaken a proper inspection they would have most likely rejected the pipes as faulty.
“With more professional engineers on this project, problems like those experienced with the faulty pipes would never happen. The Minister needs to boost the government's engineering presence on these ship and submarines projects urgently, to prevent these types of problems happening again.