Australian audit raises concerns over Land 400 Phase 3 programme

The Redback IFV (pictured above) weighs 42 tonnes and has a length, a width, and a height of 7.9 m, 3.64 m, and 3.75 m respectively. It has a maximum on-road speed of 65 km/h with a seating capacity for a crew of three. (Hanwha Defence Australia)

The Australian Department of Defence's (DoD's) procurement and contract management of the Land 400 Phase 3 programme has been “partly effective”, the Australian National Audit Office (ANAO) has said in a report.

Released on 30 March and titled Defence's Procurement of Infantry Fighting Vehicles (Land 400 Phase 3) , the report found deficiencies in the DoD's acquisition of Redback infantry fighting vehicles (IFVs) for the Australian Army.

Following a five-year tender process, Australia selected Hanwha Defense Australia (HDA) in 2023 to deliver 129 Redback IFVs to the army. According to the ANAO report, the project's approved expenditure is approximately AUD7.3 billion (USD5 billion).

Findings

The ANAO report found that the DoD's IFV acquisition strategy shifted from its initial plan to procure a “mature, proven solution” and adopted a “more developmental acquisition approach” that increased integration and delivery risks.

According to the report, these risks were not clearly communicated to the government and were not factored into tender evaluation and contracting processes.

The report noted that DoD-mandated integration requirements, combined with the move away from mature and proven design solutions, have constrained the department's ability to deliver the capability as planned.

In addition, improper handling of risk and price adjustments and a lack of focus on evaluation criteria in tender documents undermined the tender evaluation process, according to the report. “Inconsistencies in how tendered prices and risks were adjusted reduced the transparency and defensibility of the value for money assessment,” ANAO said.