$5.9bn delivery of 211 Boxer combat reconnaissance vehicles offers ‘value’

An audit has found the Army’s $5.9bn purchase of 211 Boxer combat reconnaissance vehicles was competitive.

THE army’s largest and most expensive acquisition has been “largely effective” and holds the “potential to achieve value for money” according to an audit of the Queensland-based project.

An Australian National Audit Office investigation of Rheinmetall’s $5.9bn delivery of 211 Boxer combat reconnaissance vehicles found the tender process was “competitive” and resulted in procuring the “desired capability”.

The audit also contained an assessment from the German defence giant that COVID-19 had delayed the overall project by a minimum of two months, with delivery of some vehicles delayed from 2020 to 2021.

The Australian Army’s first Boxer vehicle at Enoggera Barracks, Brisbane.

The first 25 vehicles are being built in Germany and were all due for delivery by the end of this year before full manufacturing is transferred to the company’s military vehicle centre of excellence at Redbank, west of Brisbane.

Auditor-General Grant Hehir assessed the Land 400 phase two project as being on track to create value for money for the army if the “identified risks and issues are managed appropriately and the contracted quality and quantity of goods and services are delivered according to the agreed schedule and cost”.

The audit found Defence’s “request for a tender process” was only partly effective after the minister had not been provided with all the required information needed to guide decision making.

“The approach to market, including the cost of tendering and schedule constraints, might have caused some potential bidders to not participate in the tender – potentially reducing competition and limiting the options available to the Australian Government,” the report says.

Minister for Defence Senator, the Hon Linda Reynolds and Major General David Coghlan at the launch of the new Combat Reconnaissance Vehicles Boxer Vehicle Land 400 in Brisbane. AAP Image/Glenn Hunt

But the report found Defence conducted a largely effective tender valuation and had established largely effective project governance and contracting arrangements.

The report said the tender process was “competitive and resulted in a procurement of the desired capability” but the outcome was the result of a higher risk approach than had been approved.

Of 49 milestones due by the end of June 2020, Rheinmetall had delivered 27 on time and 13 late, including six within a month of being due and seven more than a month late.