Australia Future Submarine audit and programme outcome
- Auditor
- Australian National Audit Office
- Report date
- 14 January 2020, Report 22 of 2019 to 2020
- Subject
- Future Submarine programme transition to design
- Contractor
- Naval Group Australia, with Lockheed Martin Australia as combat system integrator
- Status
- resolved
- Last checked
- 19 October 2026
What the audit found
ANAO found that Defence had established formal administration through its agreement with Naval Group. The agreement addressed 11 of 12 documented contract goals, with Defence stating that the remaining goal was covered 1.
Two key design milestones were extended. The design schedule was nine months behind Defence's pre-contract estimate, and Defence could not demonstrate that $396 million in design spending had fully achieved the two planned milestones by the audit date 1.
The report recorded Defence's overall risk rating as high. It found active risk management and warned that a delay longer than three years could create a submarine capability gap 1.
The official response
Defence acknowledged the findings. It said the extra design time sought greater maturity before construction and drew on lessons from earlier shipbuilding programmes 1.
Defence said the first concept review was completed within its allocated resources and the second review began on 5 December 2019. It said the five-week delay at that stage could be recovered and that construction and delivery dates had not then changed 1.
Parliament
The Senate received evidence in November 2019 that acquisition cost was in the order of $80 billion, with sustainment estimated at $145 billion to 2080 1.
A parliamentary accounts committee had earlier reviewed naval construction and asked Defence for updated cost estimates. Defence replied in August 2019 that the $89 billion estimate for the group of naval construction programmes was unchanged 1,3.
Follow-up audits and recommendations
An earlier 2017 ANAO audit found that Defence had effectively run the partner selection process. It warned that selecting one partner removed later design competition and placed the burden on Defence to obtain value during design and build 2.
A 2018 ANAO audit of naval construction found high to extreme risk across the concurrent shipbuilding plan and recommended updated affordability advice to government. Defence did not agree with that recommendation 3.
The 2020 report made no new recommendations. It set out procurement lessons on risk advice, records, contract review points and active management 1.
Courts, tribunals and investigations
No court judgment or criminal investigation deciding the ANAO findings was found as of 19 October 2026. The programme change and contractual consequences were government and commercial matters, not a court ruling on the audit 1,4.
Where it stands now
The diesel-electric Future Submarine pathway audited in 2020 is no longer Australia's delivery plan. The Australian Submarine Agency now describes a nuclear-powered programme under AUKUS 4.
The agency's October 2026 public record plans eight conventionally armed nuclear-powered submarines by the early 2040s and lists investment of $71 billion to $96 billion for the decade from 2026 to 2027 through 2035 to 2036 4. Those figures belong to the replacement pathway, not the audited French-designed programme.
Timeline
| Date | Event |
|---|---|
| 27 April 2017 | ANAO reports on the partner selection process 2 |
| 14 May 2018 | ANAO reports on naval construction mobilisation 3 |
| 11 February 2019 | Defence and Naval Group sign the strategic agreement 1 |
| 1 March 2019 | Submarine Design Contract is signed 1 |
| 14 January 2020 | ANAO publishes the transition-to-design audit 1 |
| September 2021 | Australia announces the AUKUS nuclear-powered pathway 4 |
| 19 October 2026 | Australian Submarine Agency records the current nuclear-powered plan 4 |
Common questions
What did the 2020 submarine audit find?
It found sound formal administration, but delayed milestones and no proof that $396 million had fully achieved both planned design milestones 1.
Did Defence accept the findings?
Defence acknowledged them and said the added design time reduced later construction risk 1.
Is the Naval Group programme still active?
No. Australia's current public plan is the AUKUS nuclear-powered pathway 4.
Did the audit recommend cancellation?
No. The 2020 report made no recommendations and did not call for cancellation 1.
Audit cases move on. Each page shows the date we last checked it. Spotted an error or a newer official record? Email hello@auditoutcomes.org with the official link.
Sources
- Australian National Audit Office: Future Submarine Program, Transition to Design (14 January 2020)
- Australian National Audit Office: Future Submarine, Competitive Evaluation Process (27 April 2017)
- Australian National Audit Office: Naval Construction Programs, Mobilisation (14 May 2018)
- Australian Submarine Agency: nuclear-powered submarine programme and pathway (checked 19 October 2026)
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