Defence Minister Defends Procurement Amid Criticism

“I don’t think that there is a systemic issue within Defence in relation to the way in which defence contracts are managed.”

Defence Minister Richard Marles, June 30, 2024


Defence Minister Richard Marles defended the defence procurement function after the Auditor General criticized probity issues in a long-term explosives and munitions contract. An official solicited champagne and later worked for the contractor, Thales, under a $1.2 billion contract. Marles, interviewed on ABC’s Insiders, was questioned about the unethical behaviour.

The $1.3 billion munitions factory contract scandal with Thales deepened as police raided Thales offices in France, the Netherlands, and Spain, investigating bribery linked to submarines and a naval base in Brazil. There is no suggestion of bribery in Australia. Thales has over 3,000 defence contracts worth over $3.3 billion since 2020, including $920 million in 2023-24.

Marles emphasized Thales’ importance to the Australian Defence Force and denied systemic issues in contract handling, despite numerous Australian National Audit Office reports criticizing defence contracts, including:

  1. Health Services: Shortcomings in contract management affecting ADF personnel welfare.
  2. Hunter-class Frigate Procurement: Lack of value for money focus and ineffective expenditure.
  3. Defence Industry Security Program: Ineffective administration and monitoring compliance.
  4. LAND 200 Combat Management: Inconsistent documentation and questionable capability fulfillment.
  5. ANZAC Class Frigates: Inefficiency and lack of competitive processes.
  6. Base Services Management: Higher-than-estimated expenditures and unmet savings goals.
  7. Fuels and Lubricants Contracts: Effective tender process but lacking value-maximizing negotiation strategy.
  8. Private Contractors Management: Policies in place but effectiveness unproven.
  9. Inventories Management: Inefficiency in general stores inventory management.

Even positive audits, like the Cape-class patrol boats contract, noted delayed probity risk assessments. Marles’ reassurance contrasts with these critical reports, raising questions about his awareness and action on defence contract management issues.

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  • Ken.T. July 2, 2024   Reply →

    I am sorry but any way you look at it the Government from both sides of the Fence is inept in Security or dealing with any form of Business or Negotiating. Career Pollies are just that. There for the money the Prestige of the Gongs at the end of term, and the Dizzy Hight’s of Stardom. I don’t know of any Pollie who doesn’t have his/her head up their clacker and is unable to find anything wrong with anything mentioned at the time.
    The state of the Nation and the Economy are a good starting point. Don’t try to give me the crap about it is everywhere, and every country is having troubles. Think = Who told you that? if you take that as gospel, you must not mow your lawns because your neighbors don’t bother mowing theirs. We need a Government that WILL TAKE RESPONSIBILITY for their decisions and actions.

    We desperately need Leaders and Doers. Not the inept rabble we have today. How many in Government, State, and Federal have held jobs and worked out Family Budgets?? There are more University Peplomers sitting in draws than there are Hanging on walls.

  • John (Jack) Snell July 2, 2024   Reply →

    Marles’ comments border on those of a delusional person. In my experience, the Audit Office seldom gets it wrong but senior Defence bureaucrats insist that they have but never offer any explanation to refute the findings. And I’m going back 40 years!

    Despite umpteen reviews, the process just becomes more and more bureaucratically constipated. The Services made a much better fist of things before Whitlam’s introduction of the Tange Review recommendations that tried shoving everyting together under the supervision of civilians who had no idea of what the Services needed. It has only got worse since.

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