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"From Collins to Force 2030: the challenge of the future submarine": speech to the Sydney Institute.



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THE HON. GREG COMBET AM MP Minister for Defence Personnel, Materiel and Science

www.defence.gov.au

“FROM COLLINS TO FORCE 2030: THE CHALLENGE

OF THE FUTURE SUBMARINE”

SPEECH TO THE SYDNEY INSTITUTE

Wednesday 4 November 2009

CHECK-AGAINST-DELIVERY

Director of the Institute, Mr Gerard Henderson, Ladies and

Gentlemen.

I would like to talk to you tonight on the topic of “From Collins to

Force 2030 - the Challenge of the Future Submarine” in order to

highlight the importance of this project and deal with some of my

roles and responsibilities as the Minister for Defence Personnel,

Materiel and Science.

Submarines represent incredibly challenging demands in the

combined fields of personnel, acquisition and procurement, and

science.

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The future submarine project is itself perhaps at the margins of

Australia’s present scientific and technological capacity. We

should not ignore the demanding nature of this project, which will

require every bit of scientific, technological and industrial capacity

that Australia can muster. And we will inevitably require

assistance from our allies to succeed.

For this reason, I thought that you might be interested to know how

we envisage setting about this challenging task.

But firstly some Australian submarine history.

Submarines in Australian Defence

Just on 100 years ago, Andrew Fisher, Australia’s second Labor

Prime Minister, introduced legislation to create the national

defence capabilities that would be tested a mere five years later.

Only two years before, Alfred Deakin - against the advice of his

Commander of Commonwealth Naval Forces, Captain William

Creswell - had decided that Australia would purchase a force of

nine submarines.

As costs escalated, nine quickly shrank to two, and on Sunday 24

May 1914 the submarines AE1 and AE2 completed their record-breaking journey from Portsmouth to Sydney.

Following the loss of AE1 on 14 September 1914, AE2 was

dispatched to Suez late in 1914, and then assigned to the

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Dardanelles campaign. On 25 April 1915, as Australian and New

Zealand forces were preparing their assault on the beaches of

Gallipoli, AE2 slipped through the Dardanelles and into the Sea of

Marmora where, a couple of days later, she was scuttled having

“run amok” to the consternation of the Turks, but inflicting little

damage.

Thus ended Australia’s first experiment with submarines, an

experiment that would take some five decades to repeat.

World War Two saw submarines come into their own. With John

Curtin as Prime Minister, Fremantle, with 170 submarines home-ported there, became the second largest operating base for the

US, UK and Dutch forces fighting in the Indian and Pacific Oceans.

Following the war, the Royal Navy continued to maintain a

submarine squadron in Australia.

Advances in submarine technology, together with dramatic

changes in the operating complexity of surface fleets, led to the

recognition in Australia that submarines would be a significant

strategic asset.

Accordingly, in 1963 the Naval Board decided to re-establish the

Australian submarine service with the purchase of four, later six,

Oberon class submarines. These highly effective vessels laid the

foundation for the submarine force we have today.

In 1985, the Defence Minister Kim Beazley commissioned a major

review of Australia’s defence needs, and in 1986 the Hawke

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Government initiated the Collins project to deliver six state-of-the-art submarines based on the successful Kockums design for the

Swedish navy.

The technological and industrial achievement of the Collins project

was immense. It is a matter of very considerable regret that public

confidence in the Collins class was undermined in the late 1990s,

just as the submarine was proving its formidable war fighting

abilities in international combined exercises coordinated by the US.

Given the fundamental importance of our submarine force this has

been very damaging.

The Strategic Argument for our Future Submarine

In May this year, the Rudd Government released the 2009 White

Paper. This outlined a force structure - Force 2030 - that will

enable Australia to meet the strategic challenges of a rapidly

changing region.

The White Paper reaffirms the long-held view that the primary task

of the ADF is to deter and defeat armed attacks against Australia.

To this end, the White Paper recognises that the aim of

establishing sea and air control in our primary operating

environment does not entail a purely defensive or reactive

approach. Rather, we must be able to conduct proactive combat

operations at a distance from our shores.

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This demands a mix of intelligence, defensive and strike assets to

ensure both deterrence and, if that were to fail, an ability to impose

unacceptably high costs on any potential adversary. Put simply,

we need to be able to take warfare to an adversary’s front door.

The White Paper identified the need for Australia to develop and

maintain a force that has a capability advantage and can provide

protection against strategic uncertainty.

Submarines are able to stop an adversary from deploying its’ fleet

by maintaining sea denial. By imposing disproportionate costs on

an adversary, submarines represent an asymmetric threat well

suited to Australia’s defence.

The Rudd Government has announced its decision to acquire 12

next generation submarines. The future submarine builds on our

experience with the Collins class, aims to offer greater range,

endurance and payload.

As I noted earlier, this is an extraordinarily complex task, imposing

ground-breaking demands on both science and industry. But the

Rudd government is confident that Australian industry can again

rise to the occasion, as it did with the Collins Project 25 years ago.

But it is important to recognise that the future submarine’s

development and delivery is intimately dependent on our

continuing ability to manage, crew and operate the Collins class.

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As they approach middle age, the Collins submarines are throwing

up a series of engineering and operational problems that impose

real demands on the Navy, the DMO and the ASC. The

Government is working together with each of these to address

these problems.

The Navy is currently examining ways of building up the submarine

personnel force in order to ensure that the future submarine is

properly crewed. The DMO is looking to the improvement of its

contract management to ensure that the technical problems that

Collins confronts from time to time can be managed quickly and

well, and the ASC is about to take on a new CEO.

So, within all of that context, I now want to highlight some of the

challenges we face in the future submarine project, in the areas of

my own responsibility including industry, acquisition, personnel and

science.

The Industrial Challenge

Without a doubt, the key challenge for the future submarines will

be the industrial challenge, which also presents the greatest

opportunity of the program.

The challenge to industry covers facets of the design, construction

and eventual maintenance of our future submarine.

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The Government is carefully considering the issues that are raised

under each of these phases in order to inform the acquisition

strategy to be utilised for this program.

The Design Challenge

Firstly, on the design stage of the project.

A constant criticism of the Collins experience was the decision to

design a submarine around an evolved Kockums platform rather

than simply purchase an existing ‘Off the Shelf’ submarine.

It is worth asking the question would Australia be in a better

situation if it had simply built one of the existing designs offered in

the tender competition for Collins or invited someone else to build

it for us?

The available evidence says no; the lead boat of the Dutch

submarine design, Walrus, was delayed 3 years due to a fire. The

British Type 2400, the initial favourite for the tender, suffered a

three year delay due to construction faults and safety concerns.

The first Thyssen TR 1700 to be built in Argentina was only 52 per

cent complete before it was abandoned. The two HDW submarines

built in India were delivered 5 and 6 years later respectively.

It should also be noted that none of these submarines matched the

Collins in terms of performance, then or now.

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In planning for the future submarine, we need to consider a range

of engineering and production solutions, ranging from the

acquisition of a Military Off The Shelf (MOTS) design, options

consistent with the Kinnaird/Mortimer reforms, to a developmental

solution designed indigenously.

Another issue for the Collins was the failure to adequately consider

through life support issues in concept, design and construction

phases.

I recently visited the US Navy’s Centre of Excellence for Ships and

Ship Systems at Carderock and Electric Boat. A key lesson

reinforced during these visits was that design development must

be very mature before construction commences.

Electric Boat have a rule known as the ‘law of 1:3:8’, that is, a task

that takes an hour in module construction takes 3 hours when the

hull has been assembled and 8 hours when the submarine is in the

water. In other words, make sure the design is mature before you

start cutting steel.

The Construction Challenge

Which brings me to the construction of the future submarine.

The design and construction of a fleet of 12 new advance

submarines will be without doubt the largest defence acquisition

this country has ever engaged in. I would go as far as to say that it

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is possibly the most complex and sophisticated industrial project

ever pursued in this country.

Some commentators have begun to estimate costs in excess of

$30 billion for the project. It is too early for this. However these

estimates give some idea of the potential scale of the project

depending on what choices are made.

To put this in perspective, the entire Snowy Mountains Scheme

cost around $7 billion in today’s dollars. This project will be among

the largest industrial project ever contemplated in Australia. If

managed properly, in addition to providing the Navy with 12 highly

capable submarines, it will contribute to the modernisation of the

Australian manufacturing industry.

Submarines are extraordinarily complex systems. For example,

each Collins Class Submarine has over 3,800,000 parts, 75

kilometres of cable, 200,000 on-board connections, 23.5

kilometres of pipe, 14,000 pipe welds and 34.5 kilometres of pipe

welding. This complexity is akin to building a space shuttle.

The construction of the Collins Class submarines in Australia

provided the catalyst for the rapid modernisation of significant

sections of our manufacturing industry.

When the Collins project began, there were only 35 Australian

companies certified to the quality levels required for defence work.

By 1998 there were 1500.

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The Collins construction involved 70 major subcontractors in

Australia and overseas. It created over 2,000 jobs and more

importantly the project drove more than 100 Australian companies

to achieve the ISO 9000 quality assurance standard.

The Hawke-Keating Governments sought a minimum local content

target of 70 per cent for the platform. This was a very ambitious

target compared to the 30 per cent participation that was the

defence project average at the time. That this was eventually

exceeded is a tribute to all participants. Of the $5.1 billion cost of

the original Collins project, $4 billion was spent in Australia.

However, we have found it difficult to maintain the industrial

capacity built around this level of local content. Some of the

ongoing maintenance problems of the Collins are driven by this

issue. Accordingly, we are giving serious thought to what industrial

capabilities must be supported within country to sustain this

project.

The Sustainment Challenge

Finally, we should also consider the issues that we will face in

maintaining our future submarine fleet.

Sustainment of submarines is always a challenge given the

complexity of each boat.

However, on this front, Australia has come a long way over the last

25 years.

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For the Oberon class submarines the Navy was dependent on

overseas suppliers for some 85 to 90 per cent of the support and

the refit of the first Oberon class submarine cost 76 per cent of its

purchase price.

The maintenance of the Collins Class, while not perfect, has

obviously improved on that. But significant challenges remain.

Quite simply, we must lift the availability of our current submarines.

It is one of my top priorities and is at the top of the project of

concerns reports that I oversee each month.

Acquisition Strategy

Our ability to get on top of the design, construction and

maintenance phases will largely determine our acquisition strategy

for the future submarine.

Studies have shown that 90 per cent of the discretionary decisions

that affect the outcome of a project are made in the first 7 to 12 per

cent of the project’s life.

There are three things that we must get right:

• We must adequately define the operating concepts and

requirements for the future submarine. The consideration of

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this must involve a full understanding of the trade offs

between different aspects of capability.

• We must develop a sophisticated acquisition strategy that

has the flexibility to solve any problems, but maintains focus

on delivering the agreed outcome. The contracting strategy

is a very important element of this.

• Finally, we must understand the interaction between

capability and the acquisition strategy. It is often the

interaction between these two processes that leads to

trouble.

One of the matters that we will need to tackle early in the project is

the need to invest in and develop a sustainable industrial base that

is capable of designing, constructing and maintaining 12 large

submarines.

On this subject, some commentators have recently canvassed the

concept of rolling production. Although it is far too early for the

Government to consider a detailed acquisition strategy, two

contrasting models would appear to provide the boundaries within

which an acquisition strategy could be designed.

In many instances building 12 identical submarines may be the

cheapest way to build the future submarine. If you can ensure that

you can acquire all the sub-systems for each boat, building 12

submarines on the same design allows the boat builder to make

huge savings on the ‘learning by doing’ curve.

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However, there are good capability and industrial reasons why that

strategy may be questioned. For instance, it is almost certain the

12th submarine to be delivered will be at least 15 years behind the

latest technology. From a technological currency point of view,

there may be certain advantages to building batches of

submarines.

For example, designing and building in batches has been found

elsewhere to support a more sustainable industrial design, skills

and maintenance base - leading in turn to a greater capacity to

develop a subsequent project and/or to deliver upgrade programs.

Moreover, to sustain the necessary design and engineering skills,

it is critical that we factor in an appropriate throughput. However,

let me repeat that no decision has been made, but building 12

identical submarines or a few batches or blocks is one of the key

choices that Government will need to consider.

Selecting the right contracting model will be an essential part of a

successful acquisition strategy. The Collins submarines were built

using a fixed priced contract. A rigid, inflexible commitment to the

terms and conditions of the contract set in train many of the

subsequent problems. An adversarial relationship between

customer and builder was enshrined from the start.

This is not to say that we should choose a cost plus contract. I was

interested to learn in my recent trip to the United States that even

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the Pentagon is moving away from cost plus contracts to more

fixed priced contracting when the acquisition is in a mature stage.

Nevertheless, we must be imaginative when looking at contracting

options.

One of the lessons from the Collins build was that there must be

very close cooperation between the navy, the project manager, the

combat systems integrator and platform builder. I am closely

following the Alliance structure that is central to the Air Warfare

Destroyer acquisition.

The “People” Challenge

Of course, we cannot discuss the future submarine force without

also focusing on the workforce that is needed to support it.

Demographic trends indicate that Australia's population is getting

older. Accordingly, Defence will face increasing competition for our

young recruits, particularly those in high-skilled and technical

occupations. Therefore, we need to focus on retaining our good

people, while at the same time, continuing to attract quality

candidates across all three Services.

The submarine force is one area where significant improvements

are needed.

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Navy continues to experience shortfalls in qualified submariners.

This is a significant vulnerability as Navy transitions from the

Collins Class submarines to the new submarine.

To assist in addressing these shortfalls, the Government has

budgeted for additional positions to support the future maritime

force.

I would like to touch on some of the reasons for these shortfalls

and how we intend to resolve them.

While the life of a submariner can be one of excitement and

professional satisfaction, it is not without its challenges. Recent

reviews undertaken by Navy confirm some systemic problems

within the submarine workforce that have impacted on morale and

job satisfaction, and consequently, on retention.

They include insufficient support to families, a lack of posting

stability, high stress, extreme fatigue and widespread concerns

about the sustainability of the current submarine force. There has

also been difficulty in finding the right balance between the need to

conduct effective training at sea and the need for respite while on-shore.

We also should not underestimate anecdotal community

perceptions that a career at sea is unappealing. Unfortunately,

some young people may be quickly discouraged from a life in the

Navy by the prospect of what they see as long periods away from

family, friends and broader social networks.

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Navy is committed to developing a positive cultural shift and

enhanced employment conditions that will help stabilise the

submarine workforce.

Our key competitive advantage is the unique nature of military

work which comes with a comprehensive package of pay,

conditions and services. In short, the ADF is a rewarding

profession in every sense.

Through sensible recruitment and retention measures, we can

build a framework for a more sustainable workforce culture.

The Science Challenge

Another challenge for the future submarine will be to lock in the

scientific support that will be critical to the long-term sustainability

of the future submarine.

If Force 2030 is to have a capability edge over other forces, we

must have submarines with advanced technology and systems.

This capability edge will be science driven. To this end, we are

very fortunate to have the Defence Science and Technology

Organisation (DSTO).

The DSTO provided research in all phases of the Collins

Submarine build. It played a vital role in the development of a new

high-strength, low-alloy steel. The consistency offered by this steel

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and the ability to weld it was an essential element in the successful

construction of the Collins.

Just as significant was DSTO’s development of advanced

anechoic tiles that render the submarine “invisible” to enemy

sonars and are at the leading edge of stealth.

The DSTO also made an invaluable contribution to the

development of the active sonar for the Collins.

The DSTO was instrumental in identifying the propeller and water

flow around the hull as key drivers of the noise problems that

affected HMAS Collins after launch.

The US Navy’s Centre of Excellence for Ships and Ship Systems

at Carderock also provided invaluable support. We will be highly

dependent on the US to provide science and technology support

for the future submarine.

We need to start early on developing the science to underpin the

future submarine. We have already begun investing in these

efforts.

For example, the Government has invested $1 million in a new

underwater test facility that will be used for experiments to control

underwater noise.

The DSTO has also partnered with the Australian Maritime College

to develop world class hydrodynamic facilities.

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The DSTO is also looking at a range of additional technologies that

will be key drivers of future submarine operation; these include

energy storage, payload deployment, communications,

autonomous systems, Air Independent Propulsion and submarine

habitability.

The Management Challenge

The final challenge we face is the management challenge.

Project management performance during the design and

construction of the Collins class was variable. The project

management unit was split between Canberra and Adelaide with

the prime contractor located in Adelaide. This led to poor

communication at times with issues taking longer than they should

to resolve.

It’s also fair to say that there was poor risk mitigation and

inadequate contingency allocated. There was also insufficient

recognition of the ‘Parent Navy’ challenge and an underestimation

of through life support costs. Moreover, the through life support

contract was not in place early enough.

A further issue that the Government is mindful of is the need to

ensure, in light of the Collins experience, that there is clarity over

the ownership and use of intellectual property.

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One of the things that the Government will need to consider is a

dedicated policy cell located in Canberra that could translate the

strategic guidance into the actual detailed requirements of the

future submarine. This will involve a deep understanding of the

various tradeoffs between desired capabilities and the impact on

cost, schedule and risk.

Additionally, consideration will need to be given to an appropriately

resourced design and project management cell located in

Adelaide. This cell must be located in Adelaide close to the builder.

We have seen the benefits of this approach with the AWD project.

The ongoing upgrade of the Collins Class submarines will also be

crucial to the successful management of the future submarine.

Managing these upgrades well potentially provides a development

path to the future submarine.

Conclusion

The future submarine project is evidently ambitious.

In the view of the Rudd Government, it is also achievable.

The combination of Australian scientific, technological and

industrial know-how, potential technical support from Allies, sound

project design and robust contract management should deliver an

unparalleled strategic asset.

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In this enterprise, we will strengthen our ties with the US, which

places great value on the role that the RAN’s submarine force is

able to play in combined operations. The ability of Australia and

the US to operate our submarines together is critical to our

combined success.

Australia’s ability to conduct successful defence operations in

theatres distant from our shores will be enormously strengthened

by the surveillance, intelligence and strike capabilities of a long-range submarine.

That is what we plan to deliver.

Thank you for your time this evening and I am happy to take your

questions.