Defence blasted by audit report into comms costs blowout

Delays still continuing

Despite repeated delays since 1997 and costs blowing out by more than $111 million, an Australian Defence Force (ADF) communications project still does not have a firm completion date, according to a report from the Australian National Audit Office (ANAO).

The implementation of a high frequency communication network and the upgrade of communications equipment on selected mobile platforms was awarded to Boeing Australia as the prime contractor in December 1997 for completion in May 2004.

Defence requires a HF comms network as an alternative to satellite communications.

It was originally approved with a budget of $505 million. However, by June 2006, the budget had increased by $111 million to $616 million.

The ANAO report said requirements were not clearly defined in the original contract with software development issues creating serious problems. In fact, the contract schedule was extended three times.

For example, the core communication system was finally delivered in October 2004, instead of November 2001.

"The core system which provides the majority of the contracted functionality has been operational for over two years and is providing excellent service," according to a defence spokesperson.

"The HF modernisation project is a complex, software intensive, high risk project involving geographically diverse sites at five major locations around Australia."

Meanwhile, the final communications system is yet to be finalised.

It was supposed to reach completion in April 2004 but is now due for completion in November 2007.

Even taking into account this delay, the ANAO report warns "this schedule is largely contingent on a critical software development milestone being met in mid 2007."

In other words, delivery is not guaranteed. But there has been a lot of changes since the project was first announced.

For example, the type of mobile platforms to be upgraded was altered significantly in 1999 following a review by the Defence Capability Committee.

As a result a significant number of platforms were removed from the prime contract.

But by early 2007, arrangements for the majority of mobile platforms are yet to be incorporated into a new contract.

In the ANAO report Defence warns it is not sure if the mobile upgrade program will even meet the late 2010 deadline, which was set when the contract was totally revised in 2004.

Significant scope changes led to the contract being rebaselined in 2004. As the ANAO report states: "From 1997 to 2003 contract management issues were problematic taking several years to resolve and a series of contract milestones were not achieved. The ongoing inability to achieve targets especially those associated with systems engineering and software development, resulted in the Defence Material Organisation (DMO) suspending earned value payments in April 2003."

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More about Australian Defence ForceAustralian National Audit OfficeAustralian National Audit OfficeBoeing AustraliaMilestoneNational Audit Office

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