Update to the Defence torpedo debacle

Defence has responded to the earlier story by the media which claims that Defence received manuals for its MU-90 torpedo (or Eurotorp) in French.

Here is the full release.

Defence
MEDIA RELEASE


26/08/2011 MECC 358/2011

Response to Criticisms of MU90 Torpedo Project


An article in some Fairfax media papers today (Lost for words, a Navy all at sea, 26 August 2011) and more widely reported in the electronic media contains information that is wrong in fact and misleading.

The article refers to the need to translate technical documents and instructions for the MU90 Light Weight Torpedo into English.

This is not correct.

As a condition of contract all key project documentation including technical instructions from the supplier has been delivered in English.

The MU90 torpedo is a complex anti-submarine warfare weapon and is a joint French and Italian development.

Defence is taking advantage of additional test data from these countries as a way to reduce costs and minimise the number of formal ship trials for the Australian MU90 program to finalise the acceptance into ADF service process.

Torpedo trials are very expensive and each test firing is a significant exercise in its own right. Being able to examine and use the results of other countries’ trials saves the Australian taxpayer a lot of money.

To date the French and Italian Navy testing programs have involved the firing of over 200 MU90 torpedoes. It is the reports and data from these tests - conducted by the French and Italian Navy for their own purposes and provided to Australia - that is in French and Italian and needs to be translated into English.

As a Project of Concern the MU90 Light Weight Torpedo replacement project receives Government, Defence and equipment supplier oversight.

There is that "complex" word used again by Defence/DMO. One has to wonder though, that if everything is fine, what is the purpose of the contract for $100,100 that the earlier article claimed was for translation? Does the contract exist or not? Should be easy to find out. Its existence by itself isn't classified.

Let us go through some of the history of Australia's attempt to field the Eurotorp. 13 years to field an anti-submarine warfare (ASW) torp is a long time. This from over a year ago.

But what they did in trying to recover from a mismanaged effort to buy a new lightweight torpedo system, amounted to a "double-up" and it was done with wad of taxpayer dollars so large, most jaw muscles don't extend far enough for the required drop.

In polite terms, the Auditor-General says as much in a report on the program to install the MU90 anti-submarine torpedo on naval vessels and aircraft.

Approved more than 12 years ago, the program "is yet to deliver an operational capability".
From the start, this new tool for shooting enemy subs was far more explosive for those trying to buy it than the foreign navies it was supposed to frighten.

Defence and the Howard government thought they were buying a proven torpedo. They "believed the MU90 to be an off the shelf acquisition . . . already in service with the other navies. This was not the case" says the Auditor-General.

How do you get that wrong? Who knows, but the Auditor-General notes "it took several years . . . to identify this".

"Planning and management was inadequate," the report says. There was "an underestimation of . . . risk".

Risk became an even more critical issue in August 2005 when Defence asked the government to approve the project's third phase.

Consider the equation that confronted John Howard's cabinet. The cost of stage three alone: $264 million. The progress to date: ". . . no torpedoes had been delivered under Phase two, and the integration of the torpedo onto the (frigates and naval aircraft) had made limited or no progress."

So what did they do? They doubled up.

According to the Auditor-General, when the government committed $264 million to the project's third phase in August 2005, Defence already felt it was "in a such a weak negotiating position (with those selling the technology) . . . it was necessary to use (the) commitment to Phase three work as leverage to improve Defence's poor overall contractual position".

Andrew Davies, the director of operations and capability at the Australian Strategic Policy Institute, has another name for it — "the sunk cost fallacy".

"I don't think anyone wants to be the person who stands up and says, 'Look we've spent this amount of money and this many years, but we should stop this now,' " Davies says.

"They tend to limp on and limp on and limp on and nobody wants to cut their losses."

It's not a bad description of a small-time gambler, ratcheting up their bets and ignoring the risks.

Twelve years on, the Auditor finds almost $400 million of taxpayers' money has been sunk into the anti-submarine missile program.

Even when the $665 million budgeted cost is finally spent our Navy will not have "the capability originally sought by the ADF, with uncertainty surrounding what will be delivered".

The purchasing process used by Defence has changed since this debacle. In the years ahead we will find out whether the new process neutralises the risk that embarrassed bureaucrats will sometimes "double up" with staggering amounts of money.

So does it seem to be a good idea to have a new ASW torpedo to replace old technology? Yes. Except that back in 2008, Defence Minister Fitzgibbon canned the idea of the integration to drop the Eurotorp from our aircraft as "too risky".

I am pleased that we have been able to make the MU90 work off the navy’s warships,” Mr Fitzgibbon said. “However, I was not prepared to follow the previous government’s practice of gambling with taxpayers’ money by proceeding with the allocation of $300million to fit the torpedo to various aircraft while doubt remained that it would work properly in that role.”

The Defence Department had planned to fit the torpedo to up to five separate platforms starting with the Anzac frigates, adding to the overall risk of the project..

“A complicated systems-integration task involving old aircraft sets off several bright-red warning lights for me, especially when Australia would have been the only country attempting to make that aircraft and weapon combination,” he said.

Last week, the navy successfully test-fired the MU90 from the Anzac frigate HMAS Toowoomba – the first time the torpedo had been fired from an Australian warship. The MU90 has been acquired in three phases, and all eight Anzac frigates are now capable of launching the weapon.

Here is how industry was hoping on the project just a few months before Fitzgibbon's 2008 announcement.

The torpedoes were ordered from Eurotorp under Joint Project 2070, and managed through the ‘Djimindi Alliance’.

This Alliance groups Australia’s Defense Materiel Organisation (DMO), Eurotorp and Thales Australia. Further torpedoes will be partially manufactured and fully assembled in Australia. The torpedoes will replace Mk 46 lightweight torpedoes aboard the RAN’s Adelaide-class and Anzac-class frigates.

This year will also see a MU90 torpedo maintenance infrastructure facility opened by the Djimindi Alliance at HMAS Stirling (near Perth) and the MU90 exercise firing program commence in Australian waters.

Australia is now seeking an advanced ASW torpedo from the U.S. that can do this mission and it already works. (Thanks anon) While it is to support an American helicopter requirement, it is possible that it is the only kind of weapon in this class that will work.

The Mark 54 is carried by the US Navy and the Royal Australian Navy. In October 2010, Australia ordered 200 more torpedoes.

Source: Mark 54 MAKO Lightweight Torpedo



So again, the Australian taxpayer has had money robbed from them. The fact is Defence, DMO and this Navy do not have a clue what they are doing with your money. Further, it is evident from looking at the long history of Defence procurement goof ups, that this portfolio can take a haircut of about $2B per year or more--right off the top--and not miss any defensive value for this nation.

China? Terrorists? Again, it seems the biggest enemy to the defence of this nation is right in the halls of Defence who act like substance abusing addicts.

A good treatment for these addicts would be to start cutting off the money supply.