By outdoor-nature-child.com In a recent interview, we delved into the critical insights from the latest U.S. Congressional Research Service (CRS) report regarding the AUKUS submarine program, specifically focusing on the risks of cost overruns that Australia may face.
The report, published on October 18, 2024, warns that the Australian government’s belief that the AUKUS partnership’s nuclear-powered submarine initiative is “too big to fail” could inadvertently heighten the risk of budget overruns. It examines the potential sale of at least three Virginia-class submarines to Australia, which is expected to commence in the 2030s, followed by Australia’s own nuclear-powered “SSN-AUKUS” submarines entering service in the 2040s.
CRS highlighted a statement from Australian Defense Minister Richard Marles during his 2023 appearance on the Australia Guardian’s political podcast. Marles asserted that the U.S., U.K., and Australia are “strongly committed to each other’s success in this initiative,” framing the project as something that, due to its magnitude, “cannot fail for any of the three countries.”
However, the CRS report cautions that this perspective might serve to exacerbate budgetary challenges. It references the concerns of some observers who believe that viewing the procurement plan as “too big to fail” poses a risk of increased costs, which may diminish the intended cost-effectiveness.
The report cites a 2020 study that noted when a project is perceived as “too big to fail,” managers often allocate more funds to ensure its completion. Additionally, it references testimony from a former NASA inspector general in 2018, who indicated that a similar mindset permeated the agency during significant missions, leading to cost overruns and delays in other projects.
Moreover, the report draws on a 2012 congressional opinion piece from retired Australian Air Force Brigadier E.J. Bushell, who criticized the management of Australia’s F-35 procurement program. He pointed to a string of increasingly severe reports from U.S. oversight bodies, highlighting a retreat into the narrative of “too big to fail” and “no alternatives,” neither of which should apply.
The Australian Guardian further reported that the CRS questioned whether rigorous cost-benefit analyses were conducted prior to the announcement of the plan by the three nations in 2021. It also reiterated Marles’s comments indicating that Australia had not made any pre-commitments as an AUKUS partner regarding joining the U.S. in a potential conflict with China arising from a Taiwan situation.
The CRS emphasized that this could lead to a situation where Australia transforms these submarines from assets potentially available for U.S.-China crises or conflicts into resources that may not be available for such scenarios. The implications of this report could significantly shape the strategic landscape and funding decisions regarding Australia’s defense capabilities moving forward.