There were three sub-classes or types that evolved as missions for the boat changed. Originally designed for anti-submarine warfare (ASW), all 36 boats in this class were built at the United States Coast Guard Yard in Curtis Bay, Maryland. Austal applied for a new DISP membership on 24March2021. The Cape Class Patrol Boats will be able to: Undertake 28 day patrols; Sail 4,000 nautical miles before having to refuel; Combat the full range of maritime security threats; Carry a larger crew to more effectively and safely manage boarding operations; Guardian Class Patrol Boat (Austal Patrol 40) Further options can be exercised by the Australian Border Force for In-Service Support for the life of the Cape Class Patrol Boat Fleet. The audit report, which tabled on 18 December 2019, noted that as at October 2018, the fleet had not been finally accepted, capability and support system deficiencies remained, and the project had not successfully transitioned to the in-service support phase. The DPPM also states that if a procurement is exempt from Division 2 of the CPRs, Defence officials are still required to undertake their procurement in accordance with Division 1 of the CPRs. (DPPM, p. 34). Defence has recognised the risk and complexity of these non-standard administrative arrangements, with the anticipated benefits expected to outweigh the risk. The Cape-class patrol boats were 95-foot (29m) steel hull patrol boats with aluminum superstructures of the United States Coast Guard. 2.11While the procedural pathway for unsolicited innovative proposals referred to by the Secretary and Chief of the Defence Force is outlined in the DPPM, the DPPM does not provide a definition of innovative or unsolicited innovative proposal to aid decision-making for handling unsolicited proposals. 109The final Contract Master Schedule was submitted to Defence but was not submitted as per contract requirements. As of July2021 net additional costs arising from projected delivery delays for the delivery of the evolved Cape class and the Offshore Patrol Vessels are estimated by Defence at $43.9million. 3.24Table3.2 below outlines the relevant governance, oversight and coordination arrangements for the project, which include a combination of project-specific governance and oversight groups as well as higher-level oversight and coordination arrangements for Defences naval shipbuilding activity as a whole.85, Table 3.2:ANAO mapping of governance, oversight and coordination arrangements for the evolved Cape class patrol boat acquisition. 82The Assistant Secretary (SES Band 1/1 Star) Specialist Ships Branch also manages the sustainment of the Armidale class patrol boats and the two leased Cape class boats through the Patrol Boat Systems Program Office and one other acquisition project. 129In May 2021, Navy was advised by CASG of a six-month delay for the first two Arafura class vessels (OPVs): delivery of Arafura moved from December 2021 to June 2022; and delivery of Eyre moved from September 2022 to March 2023. PDF YARD NO & 381 - Austal CPR paragraph 4.5 provided that: Price is not the sole factor when assessing value for money. Although not required by the TEP, five of the nine advisors did complete conflict of interest declarations. 2.91The directive expressly limited the authority of the CDP team, noting that it did not have authority to: deviate from normal Commonwealth policies; agree to any significant changes to the draft contract outside of guidance provided in the directive without first obtaining agreement from the delegate; or sign any document or give verbal undertakings on behalf of the Commonwealth committing it to a position until all specialist reports had been received and a section 23 commitment approval delegation had been exercised. Until June2020, this reporting was through the Quarterly Performance Report (QPR).105 Subsequent to the QPR, SEA1445-1 was reported on as a key acquisition project in the Project and Sustainment Report (PSR) for the period July2020 to September2020. Note a:As at contract signature, 30April2020. In October 2006, Customs Manifest Newsletter published an article summarising the 10 year service history of the Austal- built Bay Class patrol boat fleet. Launch two Tender Response Vessels simultaneously. Both committees recommended that the proposal proceed, and that a contract for the acquisition of six evolved Cape class boats be collaboratively developed with Austal for delegate consideration.37, 2.33On 21February2020, the delegate (Assistant Secretary Specialist Ships) issued an engagement directive instructing the Project Director SEA 3036 to undertake a Collaborative Development Process (CDP) with Austal.38 The directive outlined that the collaboratively developed acquisition contract was to be funded through a finance arrangement with a finance institution and a charter back to the Commonwealth.39. 2.18CNSAC noted that the proposal: was affordable (noting that a leasing arrangement had been put forward); may need additional build requirements to provide the capability required23; and was highly ambitious in terms of the timeline. Accordingly, Defence officials need to be cautious when using this circumstance to justify undertaking a limited tender. 3. The vessels can operate in more rigid sea conditions and travel longer distances than the current customs fleet. Austal commenced production on 6 April 2020. 3.30Prior to approval and signature of the contract variation, Jacobs Australia Pty Ltd performed production monitoring work on Austals construction of the Cape class boats as the Defence representative. 130As a result of the delays in the delivery of the evolved Cape class boats, Defence has had to negotiate a delay in the delivery of their sea boats from Britton Maritime Systems Pty Ltd. 131There are currently 12 Armidale class patrol boats in-service. As noted above, Defences acquisition contract for the six evolved Cape class patrol boats includes provisions for the payment of liquidated damages. Between April and September2019, prior to receipt of Austals unsolicited proposal, Defence records indicate that Austal personnel provided Defence personnel with information and modelling relating to the idea of acquiring additional Cape class boats as an alternative to the Armidale class LOTE, to support Navys transition to the Arafura class vessels. 1.16Defences Capability Acquisition and Sustainment Group (CASG) is responsible for managing the acquisition (through project SEA 1445 Phase 1) and sustainment of the six evolved Cape class boats on behalf of Navy. Defences contract with Austal includes 20 milestones, with clear entry and exit criteria and due dates. The minutes from these six meetings indicate that the following matters were routinely considered by the group with regard to SEA 1445-1: Maritime Mine Warfare, Patrol and Geospatial Program Two Star Program Governance Board. 124The other five milestones had either been met and payments made, or Austal had notified completion. 2.14By 26September2019, the lease of six additional Cape class patrol boats was considered a live option within Defence, and it was decided to present this alternative proposal at the Chief of Navy Senior Advisory Committee (CNSAC) on 4October2019. Defence advised the ANAO in October2021 that the IPMP had been drafted but not yet endorsed. 3. While the ANAO did not identify direct evidence of joint development of the unsolicited proposal before it was formally received, and Defence advised that joint development did not occur, in such circumstances care needs to be taken to avoid the perception of joint development of a proposal which may result in procurement action, so as to avoid any perception that potential suppliers enjoy an unfair advantage. VIEW DATA SHEET. Following receipt of the response, the recommendation included in the draft audit report was amended. The Department of Defences website refers potential sellers back to the guidance from Finance and to Defence and the Private Sector an ethical relationship, the link to which is also no longer valid. 4. 3.32The Defence Capability Manual91 identifies a set of key documents that are required to be in place to support project governance. Defence has undertaken an appropriate range of activities to date to manage project milestones. It would have been prudent for Defence to consider its probity arrangements for its personnel earlier than it did. These management-initiated reviews consider a projects status while sufficient time remains for corrective action to be implemented. 113For example, on engineering, integrated logistics support, Lifecycle Upkeep Sustainment Intelligence (LUSI) and configuration management. 3.96Defence advised the ANAO in October2021 that: There are no stop payment milestones in this Contract (which typically prevent payment of later Milestones due to the contractor not achieving an earlier Milestone). The customs and border protection issued a request for tenders in July 2010. Less than 2 years later, the company has delivered the first of the Evolved Capes, the ADV Cape Otway (314), and continues to construct the remainingfive vessels due for delivery over 2022-23; On 18 April 2022 Prime Minister The Hon Scott Morrison announced that a further two Evolved Cape Class Patrol Boats would be ordered by the Australian Department of Defence in FY2023, bringing the total number of vessels ordered for the Royal Australian Navyto eight. HMAS Maitland is scheduled for withdrawal from service in April 2022. Browse our range of publications including performance and financial statement audit reports, assurance review reports,information reportsand annual reports. 2.66In its April2020 assessment of value for money, the TEB considered a number of non-financial factors, including: Austals past performance of contractual obligations; the proposed corporate structure and proposed approved subcontractors; the financial and corporate viability of Austal; the extent to which the tendered solution for the Mission System and Support System would meet end user and operational capability needs and requirements set out in the draft statement of work; and the extent to which Austal could deliver the supplies necessary to meet the requirements of the draft statement of work. These vessels,TTSPort of Spain(CG41) and TTSScarborough(CG42) were delivered in May 2021. Defence concurs with the findings that the procurement arrangements and decision making processes were largely effective. Note d:Meetings were held approximately every six to eight weeks, consistent with the Terms of Reference. . Between June2020 and late April2021, the Project Working Group met on 17 occasions (approximately every two weeks). 2.88Defence agrees to the recommendation. The risk of providing OFFICIAL: SENSITIVE information to Austal is assessed as low due to the clearly established need to know and long history of engagement between Austal and the Commonwealth at this level of security classification. 88Production monitoring services include schedule monitoring and physical configuration audits. 37While the February 2020 value for money assessment of the Austal proposal assessed the proposal as if it were a direct purchase, CNSAC and the Investment Committee considered it as a finance lease arrangement. Only one of the cost assessments accounted expressly for residual value on Cape class boats 9 and 10 and the evolved Cape class boats. 49The section 23 commitment approval value did not reflect the actual or expected contract value for the acquisition. 20. Milestone 12 Acceptance Boat 2 was due on 10 December 2021 but was not achieved on time and is currently planned to be met on 22 July 2022 due to delays associated with the defective aluminium and production workforce inefficiencies. 45The DPPM in effect at that time required Defence officials undertaking procurement valued at or above $200,000 (including GST) to develop a written procurement plan for the procurement commensurate with its scale, scope and risk, and which takes account of the procurement life cycle, including cost of ownership and disposal considerations.. Files are available under licenses specified on their description page. 2.94Government requires clear, accurate, timely and complete information on which to make decisions. Are uncrewed surface vehicles the future of naval combat? Provisions for corrective action are included in the contract, as are provisions for the payment of liquidated damages. Where it applies, Division 2 of the CPRs establishes conditions for limited tender (ie. Austal is required to provide these reports to Defence every month prior to the acceptance of the first boat, with contract status reports to be provided every two months thereafter.106, 3.56As of November2021, Austal had provided Contract Status Reports to Defence on 15 occasions, meeting the contractual requirements.107. Two Evolved Cape-class Patrol Boats have been delivered to the Royal Australian Navy so far: ADV Cape Otway was delivered in March 2022 ADV Cape Peron was delivered in August 2022. 3.21The Specialist Ships Branch (within the Maritime Systems Division of Defences Capability Acquisition and Sustainment Group, CASG) is responsible for management of the SEA 14451 project.82 The project is managed day-to-day by the SEA 1445-1 project team.83. Hiring activity related to social responsibility decreased by 1% in the aerospace, defence & security industry in Q3 2022, Quarterly Hiring Update: Hiring activity related to cloud decreased by 13% in the aerospace, defence & security industry in Q3 2022, Hiring activity related to robotics increased by 1% in the aerospace, defence & security industry in Q3 2022, Product Lifecycle Management solutions: the productivity silver bullet for modern naval architects, Emergency HF communications equipment in action in the Caribbean, The five productivity killers for engineers in the shipbuilding industry, Digital Helicopter Operator Surveillance System (DHOSS), Naval Technology Excellence Awards Research Guide, Command and control systems and components for the naval defence industry, Military communications systems and equipment suppliers for the naval defence industry, Yarmook-Class Offshore Patrol Vessels, Pakistan, Aksungur Medium-Altitude Long Endurance (MALE) UAV, Turkey. The section 23 commitment approval was signed by the delegate on 14November2019. Pursuant to Defence Instruction Administrative General 5, members of the Senior Leadership Group are required to provide annual declarations of interest and maintain them during the year, so that no project specific declaration was necessary. (Department of Defence, Defence Procurement Policy Manual, 1 July 2019, pp. 3LOTE refers to the work to be undertaken to extend the effective service life of the vessel beyond its original service life. Consequently, decision points listed at Annex B [key acquisition milestones] may not be applicable to every project. The vessels will be maintained at the Regional Maintenance Centre North East in Cairns, which was opened in January 2022. This page was last edited on 27 February 2023, at 05:10. The Evolved Cape-class Patrol Boats will be utilised for a wide variety of constabulary and naval missions and play a critical role in Australia's national security, as a high-performing, reliable and effective maritime asset for the Royal Australian Navy.
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