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Australian officials’ deal with weapons company Thales heads for corruption watchdog — Defence contract went from initial costing of $660 million to $1.2 billion and is now projected over $1.3 billion
Defence's handling of a $1.3 billion Thales contract has been referred to the NACC. But officials need to explain their incompetence and unethical conduct.
While Defence was considering whether to proceed with the course it eventually undertook — to throw aside all thoughts of market contestability and simply approach Thales to keep running the Mulwala and Benalla plants — the ANAO says: The team in the explosives branch prepared a paper that, according to the ANAO, pointed out the “potential merit in opening the facilities to global suppliers who could leverage their global business to achieve maximum economies of scale and offset low ADF demand; that by deciding to sole source to Thales at this stage, Defence had ‘discounted the potential benefits of another operator with a larger munitions business, without truly testing the course of action’.” Senior Defence officials had been warned repeatedly that this would happen if they left it too late — that Thales would stall and drag things out, and that the company had a history of non-compliance in its dealings with the department.
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