Procurement: The Fewer, The Better And Cheaper


October 17, 2021: In mid-September Australia cancelled a $65 billion contract with a French firm to build twelve Attack class subs. These new subs were a non-nuclear version of the new French Barracuda class SSN (nuclear attack subs). Simultaneously it was announced that Australia had formed a military cooperation coalition with Britain and the U.S. called AUKUS. This made Australia a member of an exclusive club, one that long consisted of only two members; the United States and Britain. This special arrangement dates from the late 1950s when the U.S. agreed to provide Britain with access to military tech that America shared with no one else. This included nuclear submarine tech, including reactor design and SLBMs (Sea Launched Ballistic Missiles). France was offered access to submarine nuclear reactor tech but declined and developed its own. In the case of the Attack-class subs, Australia was concerned about the growing delays and escalating costs. The contract contained numerous opportunities for Australia to terminate the deal, with minimal cancellation fees, for failure to meet deadlines. Australia exercised one of those termination opportunities, which the French never expected.

France reacted with denunciations against Britain and the U.S. for conspiring with Australia to steal the contract. That made for great headlines, but wasn’t true. Australia was already paying a lot of money to deal with the delays already incurred. For example, two months before the French deal was cancelled Australia decided to spend over $4 billion to refurbish all six, instead of just three, of its current Collins class diesel-electric submarines. This was necessary to deal with delays in the construction of the twelve new Attack class boats. The Attack class are diesel-electric versions of the new French SSNs and are smaller because they have no nuclear reactor and all the additional equipment needed to support it. Part of the problem was that the Barracuda SSNs took longer than expected to enter service and that delayed equipping the Australian shipyard selected to use French SSN tech to build the non-nuclear “Shortfin Barracuda”. As a result of the delays in France and Australia the cost of developing and building the Attack class boats in Australia had increased by over fifty percent. Extending the life of all six Collins class boats was seen as a cheaper and safer alternative than scrapping the innovative Shortfin Barracuda project and looking elsewhere.

One likely replacement would be the German 216 class boats, which came in second in the competition to replace the Collins class. The 216s are smaller and less effective, on paper, than the Shortfin Barracuda but can be delivered on time and at half the original cost of the French design. France was aware of this possibility but did not expect the AUKUS deal which would enable Britain and the U.S. to share nuclear submarine tech with Australia. This appeals to Australia because the Americans share nuclear sub tech with Britain, not construction contracts, and continues to do so. Britain designs and builds its own SSNs and SSBNs. While Britain uses American SLBMs (Sea Launched Ballistic Missiles), Britain supplies its own nuclear warheads. Much, if not most of the tech in British SSNs and SSBNs is British and Australia would like to purchase American and British tech for the six to eight SSNs Australia plans to build to replace the French Barracuda design.

The Collins class boats entered service between 1996 and 2003 and were expected to retire after 30 years of service. That long service life was attained by giving each Collins class boat one or more expensive refurbishments when the boats got older. By refurbishing all six Collins class boats one more time, all will have a useful life of 37 years and retire much later, sometime in the 2040s, giving the Attack class enough time to enter service to replace the six retiring Collins class subs. The first Attack class boat was supposed to be in service by 2035. By 2021 Australia had doubts that the Attack class subs would be ready before Collins class boats were too old to be operated safely. Australia had been discussing this with the British and Americans for over a year and the AUKUS proposal came out of that. There would have been an AUKUS agreement no matter what happened to the Barracuda project. The Australian naval officers had long been interested in the British switch to an all-nuclear sub force in the 1990s. Since the 1960s Britain had maintained a mixed nuclear/diesel-electric submarine force but when they put their first SSBNs into service during the 1990s they found it practical to go all nuclear rather than continue developing and building nuclear and non-nuclear subs. Now Australia plans to make the same switch.

The non-nuclear Barracuda began in early 2016 when it was agreed that the French firm DCNS would design and share construction of twelve new diesel-electric submarines. Australians preferred the French design because it was a larger boat than those offered by Germany and Japan. The French proposal was a diesel-electric version of their new Suffren (Barracuda) class SSNs. This non-nuclear “Shortfin Barracuda” design was about 20 percent smaller (in surface displacement) than the 4,700-ton nuclear powered Suffern but was otherwise very similar with a crew of about 60, four 533mm torpedo tubes and 24 torpedoes, missiles or mines.

A major selling point for the Barracuda was the proven silencing technology France had developed for their SSNs. This would now be added to an inherently quiet diesel-electric design. The Shortfin Barracudas were to be built in Australia as the Attack class and cost about $2.4 billion each. This included an AIP (Air Independent Propulsion) system that would allow these boats to operate submerged for two weeks at a time. French firms were to only control about half of the construction budget, with much of the rest going to American firms that would provide the electronics and weapons. The RAN (Royal Australian Navy) Attack subs were to begin construction in 2022 and enter service in 2035. That did not happen because of problems in France.

In mid-2019 the first of six new French Barracuda type SSNs was launched. Called the Suffren, it officially entered service in late 2020 but will not be completely operational until sometime in 2021. All six will enter service by the late 2020s. Back in 2006, France decided to buy six new Barracuda class SSNs, for about $1.5 billion each. The 4,700-ton (surface displacement) boats are smaller than America's new 7,300-ton Virginia class subs (which cost about $2.8 billion each) and use different nuclear power plant and silencing technologies. The unique French tech works but since they develop it themselves, without relying on the use of American tech, like the British do, getting a new class of SSNs into service usually takes longer than British or American designs and, in this case, took much longer than expected.

Construction on the first Barracuda began in 2007 and it was supposed to be launched by 2012. That launch date was tentative and was delayed until 2019 because development of the Barracuda nuclear power plant began in 2003 and soon ran into problems. Problems with the power plant were no surprise because France, unlike Britain, did not license the American SSN power plant. This would make it more difficult to export French nuclear subs, which France has never been able to do because of a lack of customers. The French chose a different power plant design that used commercial (not military) grade nuclear fuel. This meant French nuclear subs had to be refueled more often but this was made easier by building the hull with special large hatches that could be quickly opened once every 7-10 years for refueling then sealed again. France is the only nation using this type of ship power plant and had to handle development and maintenance procedures itself. With a small fleet of nuclear subs, this increased the cost per sub. Britain, by licensing the American tech, gets the benefit of a much larger American nuke fleet and the larger budget for work on the power plants. Ever since the first Barracuda began construction, the delays have come from power plant problems. By 2012 it was believed that launch date could be 2017 but delays perfecting the power plant continued. The sub could not be launched until the power plant was completed and the hull made watertight.

Delays in getting the Barracudas into service added more delays in completing the Attack Class design and getting construction going. Australia exited the Attack Class agreement because it appeared that AUKUS provided a more reliable and affordable solution that also enabled a switch to an all-nuclear sub force. Britain and the U.S. also provide crew and construction staff training in a common language and the option to lease one or more American or British SSNs that are about to retire. This would have the Australian crews ready by the time the first Australian SSN entered service. By building these subs in Australia, American and British nuclear subs would have access to some repairs or maintenance for their nuclear subs operating in the Western Pacific. The U.S. currently has over half its SSNs operating in the Western Pacific.

One critical factor in how many SSNs Australia will build is the problems Australia already has finding enough qualified recruits for their diesel-electric subs. Britain and the U.S. have similar problems with their nuclear subs, as does China with its diesel-electric and nuclear subs. That might make it easier for Australia to settle for four or six nukes rather than the eight currently discussed.




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