Insiders say much-mocked Competitive Evaluation Process delivered best submarine deal

THE ridiculed Competitive Evaluation Process for the $50 billion Future Submarines is what eventually delivered the best result, insiders say.

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THE ridiculed Competitive Evaluation Process for the $50 billion Future Submarines is what eventually delivered the best result, insiders say.

Former defence minister Kevin Andrews faced a contemptuous reaction to the CEP when he announced it in Adelaide in 2015.

Barely anyone had ever heard of a CEP, and it was seen as a hastily assembled framework to overcome accusations of a secret handshake deal with Japan on the submarine project.

But sources from all bidders — France, Germany and Japan — have told The Advertiser that the process matured and strengthened to become robust.

Peter Jennings is executive director of the Australian Strategic Policy Institute, which advises the Government, and was on the expert panel overseeing the Defence White Paper.

He credits Mr Andrews with starting the process that was an “absolutely critical step” in developing the recommendation to Cabinet’s National Security Committee that Australia should partner with French shipbuilders DCNS to build the submarines.

Prime Minister Malcolm Turnbull announcing the submarine deal in Adelaide flanked by Industry Minister Christopher Pyne and Defence Minister Marise Payne.

“(The CEP) was pretty strongly criticised but ... it had a number of really important qualities,” he said.

“It was competitive; it put the onus on companies and countries to tell Australia what they had to offer. It forced an evaluation on the Government so it couldn’t just be a ‘captain’s pick’ (and) it was a process.

We hadn’t had one up until then.” The 15-month CEP culminated in the recommendation to the NSC, which then met three times before presenting their findings to Cabinet on Tuesday morning. NSC meetings also included Industry Minister and South Australian MP Christopher Pyne.

Immediately after Tuesday’s Cabinet hook-up, Prime Minister Malcolm Turnbull and Defence Minister Marise Payne were driven to ASC to announce the deal and head off further leaks. Mr Jennings said the French had put together a “significantly superior” offering, one that was the least risky.

But he also said it was surprising how swiftly Japan was ruled out.

After Japan was ruled out, the battle was between Germany and France, with some government sources telling The Advertiser Germany was ahead by a nose at one point. However, France emerged as favourite.

Mr Jennings said it was because “they put together a really compelling industry package that supported the whole build”.

“In contrast to the Japanese, who were really struggling to work out how to move the capability offshore, and the Germans, who were not as committed to the idea of a shared enterprise,” he said.

Senator Payne also credited the CEP with delivering the right outcome. “It has been rigorous. It has been methodical and it has enabled us to select the right international design partner,” she said.