The Australian Defence Department has announced plans to spend up to A$6bn ($4.13bn) arming its new fleet of 12 submarines with next-generation weapons, despite a potential government inquiry by the Australian National Audit Office (ANAO) to review the A$50bn ($35.94bn) contract for the procurement of the fleet.

The Australian Defence Department confirmed it will spend between A$5bn and A$6bn on arming the fleet over the course of its operational life, with technology such as unmanned underwater drones and anti-aircraft missile systems. The submarines are expected to enter into service by the mid-2030s on a staggered basis of a new submarine every two years. The last submarine will enter service by the mid-2050s.

French company Naval Group is the leading manufacturer of the nuclear-powered Shortfin Barracuda submarine, and will deliver 12 conventionally powered variants of the Barracuda to the Royal Australian Navy.

Naval Group (formerly DCNS) chairman and CEO Hervé Guillou said during the announcement of the contract: “DCNS is looking forward to a strategic and sustainable partnership with the Commonwealth of Australia, Lockheed Martin and Australian Industry.

“This is a significant step forward in the programme. This contract will allow DCNS to commence the initial phase of Australia’s Future Submarine. DCNS is committed to ensuring that Australia has a regionally superior submarine constructed in Adelaide and develops a sovereign naval industry.”

Potential second inquiry

The ANAO announced at in December 2018 that it could launch a second government inquiry into the contract to examine the Australian Defence Department’s progress in meeting the Future Submarine’s Program’s milestones.

The ANAO said on its website: “This audit would examine Defence’s progress in meeting the scheduled design milestones for the Future Submarine Program. The deliverables under the program include the design and construction of 12 diesel-electric submarines, and the development and acquisition of the submarines’ support systems for the Royal Australian Navy at a cost of over $50bn.

"This audit would examine Defence’s progress in meeting the scheduled design milestones for the Future Submarine Program."

“The ANAO’s April 2017 audit of the programme reviewed the competitive evaluation process used to select a partner for the design of the submarine. The audit would be the second in a series of audits to be undertaken over the life of the programme to provide assurance on its progress.

The contract for Naval Group to deliver the submarines was awarded more than two and a half years ago, but there has been very little progress on the programme. A decision on whether the ANAO will purse audit has not yet been made.