|Patrick Walters, National security editor | June 18, 2009
Article from: The Australian
MORE than $1.4 billion of taxpayers' money was wasted on the Defence Department's botched acquisition of the Super Seasprite helicopter, 47 per cent more than the $953 million claimed by the Defence Department last year.
The Auditor-General is highly critical of the Defence Materiel Organisation's management of the US-manufactured helicopters, which were ordered for the navy's Anzac frigates but were never accepted into operational service.
The long-awaited final report by the Australian National Audit Office found the Seasprite had a potential catastrophic failure rate calculated at 20,000 times greater than the US aviation standard.
The Seasprite's crash worthiness was below contemporary standards, it could not be flown in bad weather, the pit was too small for some crewmen and the advanced computerised combat system never worked properly.
But most worrying, the computerised flight control system tended to make unpredictable movements of flight controls, known as hard-overs. During flight testing, that occurred four times in 1600 flying hours. The aircraft design specification was for one potentially catastrophic failure in a million hours.
The Rudd government cancelled the project to give the navy an anti-submarine capacity in March last year, terminating the prime contract with US firm Kaman Aerospace Corporation and handing the Seasprites back to them for an eventual sale.
The project ran for 12 years, with a $746m contract for 11 Seasprites being signed by the Howard government in 1997.
Equipped with Penguin anti-ship missiles, the Seasprites were designed to operate from the Anzac frigates, providing maritime strike and surveillance for the RAN's surface fleet.
The ANAO report reveals that extra expenditure of at least $448m was incurred by Defence in establishing the Seasprite capability on top of the $953m spent on the prime contract. This included $201m spent on Penguin missiles, which cannot be used on any other aircraft, and $135m on in-service support. An extra $59m went on spare parts and $47m on last year decommissioning 805 squadron, which was destined to operate the Seasprites.
The handling glitches and stability issues led to the Seasprite's grounding by the navy in March 2006 after it had been provisionally accepted by the RAN.
The ANAO found the decision to cancel the project could not be attributed to any individual factor.
"If there is an overriding message from this project it is that risks to project outcomes need to be better managed and related accountability for managing project performance strengthened," it said.
The DMO's Seasprite project office had experienced "ongoing difficulties in attracting and retaining appropriately qualified personnel which inhibited its capacity to manage a large and complex project".
Right from the start, an inadequate understanding of the risks associated with the acquisition was not attained through the requirement definition and tender-evaluation processes.
"Poor contract management practices within Defence and DMO, over the life of the project, contributed to ongoing contractual uncertainty," it said.
The Auditor-General said the risks associated with the project were increased by the decision to fit upgraded systems "into a smaller helicopter than the Anzac ship is designed to operate".
The navy is now looking to buy a fleet of up to 24 combat helicopters at a cost of well over $1bn to replace the junked Seasprites and provide its surface fleet with a capable anti-submarine warfare platform.
Defence Materiel Minister Greg Combet said last night that Defence had accepted all seven recommendations from the ANAO designed to prevent a repeat of the Seasprite.
"The lessons learned from the Seasprite project have already been incorporated in reforms which have enhanced Defence project management practices and are taken further in the implementation of the Mortimer review as recently announced by government," Mr Combet said.