Defence drops Deloitte from $1.8m nuclear submarine advice contract
Deloitte has been dropped from a $1.8m contract with the Department of Defence to advise on the country’s nuclear submarine program.
Defence has torn up a $1.8m contract with a senior Deloitte adviser to Australia’s nuclear submarine program amid concerns over the person’s links to foreign military interests.
Defence exercised a convenience clause in its contract with the consulting giant to end the engagement less than two months after it began.
The department told The Australian the decision to axe the 12-month contract was not related to any perceived or actual conflict of interest, but refused to detail the reason for the termination. Multiple sources said Defence had been probing possible links between the Deloitte adviser and foreign defence interests.
Deloitte’s 12-month management advisory services contract with the recently established Australian Submarine Agency had been scheduled to run until June next year.
The Defence contact point for the contract was Defence Chief Angus Campbell’s personal support office, suggesting the adviser was engaged in high-level strategic planning work.
A Defence spokesman said: “The Australian Submarine Agency engages a range of advisers to assist from time to time, and will continue to consider its requirements and engage advisers where appropriate.”
A convenience clause allows either party to exit a deal without the need to show if one party is at fault. The Australian government’s various submarine programs, from the now-cancelled Attack-class program to its Virginia and AUKUS-class procurement plans, have been swarmed by consultants.
Defence secretary Greg Moriarty has declined multiple interview requests by The Australian to discuss the department’s long-running issues with its use of consultants and contractors.
Austender data shows that in the three months since it was
established, the Australian Submarine Agency has advertised 63 different tenders.
The many consultants engaged on the program include KPMG, which has faced allegations that it over-charged Defence.
A number of retired American military officers have been contracted to advise on the AUKUS submarine program and other major naval procurements.
They include retired US admiral John Richardson, a career submariner who is paid $US5000 ($7736) a day plus travel and accommodation as a part-time consultant under a contract with Defence struck last year.
Another former US vice-admiral, William Hilarides, has been paid almost $2.5m for serving on Australian shipbuilding advisory panels since 2016.
Vice-Admiral Hilarides, who is conducting a review of Australia’s surface fleet, charges a reported $US4000 a day.
The US has been alert to such conflicts, publishing documents revealing that former senior military officers have been earning big money providing advice to foreign defence departments.
Deloitte was contacted for comment.
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