An audit examining the AIR 8000 Phase 2 capital acquisition project has found while the Department of Defence’s processes met all legislative and procurement requirements, its approach could have been better.
had bumpy takeoff
In his report, AIR 8000 Phase 2 — C-27J Spartan Battlefield Airlift Aircraft, Auditor-General Ian McPhee said based on Defence’s assessments, there was a reasonable basis for government to select the US variant C-27J as a better value for money option than the commercial version of the C-27J and the Airbus C-295.
“Nevertheless, the Department’s advice to Government during the earlier phases of the procurement did not cogently establish the case for undertaking a direct source Foreign Military Sales (FMS) procurement, and there were also shortcomings in Defence’s handling of relations with industry during the course of the procurement,” Mr McPhee said.
“Defence’s approach to industry did not transparently communicate the status of the procurement process, and resulted in a misunderstanding by the commercial suppliers that Defence had initiated an open procurement process, rather than collecting additional information for government decision making in the pursuit of a direct source procurement.
“In that respect, Defence’s approach did not have sufficient regard to the expectation in government procurement that suppliers will be treated in a fair and transparent manner.”
He said the Department had acknowledged the lack of clarity attending its approach to industry and amended its processes to improve communication with industry in the future.
“Defence has acknowledged there would have been merit in highlighting the importance of the logistics advantages of the C-27J in its advice to government, to inform decision makers of the full range of considerations which formed the basis of Defence’s longstanding preference for the C-27J,” he said.
“Given the long timeframes, cost and complexity of major Defence projects, it is important that advice to government on procurement decisions clearly identifies the key points to consider and the cost of various options to assist Ministerial decision making.”
The report can be accessed at this PS News link.
Edition 375, 20 August 2013