2.1
The Department of Defence (Defence) seeks approval from the Committee to proceed with the LAND 121 Stage 5B Facilities Project. The project proposes to deliver works at the following six locations:
Derwent Barracks (Tasmania
Campbell Barracks (Western Australia)
Lavarack Barracks (Queensland)
Puckapunyal Military Area (Victoria)
Robertson Barracks (Northern Territory)
Gallipoli Barracks (Queensland)
2.2
Defence state that the aim of the proposed LAND 121 Stage 5B Facilities Project is to ‘provide fit for purpose facilities and infrastructure to support and sustain vehicles, modules and trailers being procured for the Australian Defence Force under the LAND 121 Vehicle Acquisition Program.’
2.3
The estimated cost of the project is $183.3 million (excluding GST).
2.4
The project was referred to the Committee on 27 November 2019.
Conduct of the inquiry
2.5
Following referral, the inquiry was publicised on the Committee’s website and via media release.
2.6
The Committee received two submissions, one supplementary submission and one confidential submission. A list of submissions can be found at Appendix A.
2.7
On 6 May 2020, the Committee conducted a project briefing, public and in-camera hearing via teleconference. A transcript of the public hearing is available on the Committee’s website.
2.8
The project briefing, public and in-camera hearings for the project were not held until May 2020 following a request from the Department of Defence.
Need for the works
2.9
The purpose of the LAND 121 Vehicle Acquisition Program is to replace the Australian Army and Royal Australian Air Force ageing vehicle fleet.
2.10
In their submission Defence state that:
The LAND 121 Vehicle Acquisition Program is being delivered under four phases spanning a 13 year period, and is delivering over 7,000 vehicles, over 5,500 trailers and over 5,000 modules. The new vehicles, trailers and modules will provide the Australian Army and Royal Australian Air Force with a highly capable light, medium and heavy vehicle fleet, consisting of protected and unprotected variants. The new vehicle fleet is capable of supporting combat operations, humanitarian assistance and disaster relief operations, and training to ensure the Australian Defence Force is prepared for both current and future operations.
2.11
At the public hearing Defence told the Committee that the LAND 121 Stage 5B Facilities Project would ‘provide the facilities and infrastructure to support the medium, heavy and simulation components of the LAND 121 capability program’.
2.12
In their submission Defence noted that it could not use its existing facilities as:
Existing facilities were generally designed to support the outgoing vehicles and trailers. Many of the existing facilities are not able to accommodate the new vehicle and trailer types as the incoming LAND 121 vehicle fleet is larger and heavier than the outgoing vehicles. The Project proposes to construct new facilities, and where practical, refurbish existing facilities and infrastructure to accommodate the new vehicle types and meet operating, training and maintenance needs at six locations.
2.13
Defence told the Committee that ‘simulation represents the future of defence training, and suitable facilities with appropriate networking and connectivity are required to enable this requirement.’
2.14
In response to the Committee’s questions regarding how Defence plans to use the proposed simulation centres, Defence stated that:
Defence is seeking to tie in simulation as a core piece of our training, both for individuals and how they operate the pieces of equipment that are being delivered and in the collective sense about how, say, a convoy of those vehicles are operated in an operational setting. Historically, how we would have done that was we would've taken all of those vehicles to a range some distance away from the barracks and we would've deployed a number of people in all of those vehicles to achieve that. By utilising simulation, we can improve the individual qualities of the people who operate those vehicles. More importantly, in a collective sense, we can start to do some of that collective training that incurred huge amounts of cost—in terms of relocating people and equipment to training areas—and actually do that in-barracks in those simulation facilities.
Options considered
2.15
Defence state in their submission that considered the following three options for the project:
Option 3: priority scope elements
2.16
Defence state that option 1 (do nothing) was not a viable course of action as it did not meet the maintenance needs as ‘many existing facilities are [currently] unable to accommodate the new vehicle types and as a result will not be able to facilitate maintenance of the vehicles to a serviceable condition…’ Additionally, Defence stated that option 1 did not meet the required training needs as the ‘existing facilities are unable to accommodate the LAND 121 Vehicle Acquisition Program simulation training requirements…’
2.17
Option 2 (full scope) was discounted as it was assessed as unaffordable.
2.18
Option 3 (priority scope elements) was assessed by Defence as the preferred option as it represented the ‘best value for money for the Commonwealth, addressing the capability need from a whole of life perspective’.
2.19
Defence state that option 3:
…assessed a reduced scope solution where lower priority scope elements were removed. This was achieved through a value management process that considered scope priorities, impact on capability and stakeholder input. Vehicle hardstand and shelters at RAAF Base Williamtown and Porton Barracks and vehicle shelters at Gallipoli Barracks were assessed as a lower priority and their removal from scope a lower impact to capability.
2.20
Defence further note that option 3 ‘also allows flexibility to re-invest savings into the Project, delivering an improved capability outcome.’
Scope of the works
2.21
The proposed scope of the LAND 121 Stage 5B Facilities Project includes:
1
Project element 1 – Derwent Barracks (Tasmania):
a.
workshop bays, including one 15 tonne gantry crane, vehicle maintenance bays and a general engineering / welding bay
b.
working accommodation, meeting room, lunch room and ablutions
c.
general storage areas to meet the vehicle requirements for repair parts, tools, petroleum, oil and lubricants and hazardous materials
d.
external fire tank and fire pump shelter; and e. hardstand, associated civil and infrastructure services
2
Project element 2 – Campbell Barracks (Western Australia):
a.
workshop bays, including a ten tonne gantry crane, vehicle maintenance bays and a general engineering / welding bay
b.
working accommodation, including training, meeting rooms and lunch rooms
c.
general storage areas to meet the vehicle requirements for repair parts, tools, petroleum, oil and lubricants and hazardous materials
d.
ablutions, change facilities and a laundry
e.
hardstand, vehicle shelters, fencing, gates, associated civil services and infrastructure services
f.
demolition of existing facilities
2.22
Defence states in their submission that the proposed facility for project elements three and four supports the LAND 121 capability requirements for simulated training, however the works ‘comprises a dedicated space with in the Armoured Vehicle Simulation Site’ and ‘is intended to be delivered thorough the Armoured Fighting Vehicles Facilities Program’. The scope of works for the Armoured Fighting Vehicles Facilities Program is outlined in Chapter 3 of this report.
3
Project element 3 – Lavarack Barracks (Queensland):
a.
protected mobility tactical trainer rooms for simulated driver and crew training
b.
desktop tactical trainer rooms containing desktop stations for simulated driver training
c.
syndicate rooms to allow for tactical planning;
d.
classrooms for group training
e.
ablutions, kitchenette facilities and breakout areas
4
Project element 4 - Puckapunyal Military Area (Victoria):
a.
protected mobility tactical trainer rooms for simulated driver and crew training
b.
desktop tactical trainer rooms containing desktop stations for simulated driver training
c.
after action review rooms for debriefing and further learning
d.
syndicate rooms to allow for tactical planning
e.
classrooms for general teaching and learning areas
f.
ablutions, kitchenette facilities and breakout areas
5
Project element 5 – Robertson Barracks (Northern Territory):
a.
combined protected mobility tactical trainer and after action review room for simulated driver, crew training and to allow for debriefing and further learning
b.
desktop tactical trainer room containing desktop stations for simulated driver training
2.23
Defence state in their submission that ‘the proposed works at Gallipoli Barracks will address facility shortfalls at the 1st Signals Regiment and the 2nd General Health Battalion.’
6
Project element 6 – Gallipoli Barracks (Queensland):
i.
workshop bays, including a ten tonne gantry crane, vehicle maintenance bays, general engineering/welding bay and an electrical bay
ii.
working accommodation, including meeting rooms, lunch rooms and ablutions
iii.
construction of a new quartermasters store
iv.
general storage areas to meet the vehicle requirements for repair parts, tools, petroleum, oil and lubricants and hazardous materials
v.
hardstand, fencing, gates, associated civil services and infrastructure services
vii.
demolition of existing facilities
b.
2nd General Health Battalion:
i.
workshop bays, including a ten tonne gantry crane, vehicle maintenance bays, general engineering/welding bay and an electrical bay
ii.
construction of a new quartermasters store
iii.
general storage areas to meet the vehicle requirements for repair parts, tools, petroleum, oil and lubricants and hazardous materials
iv.
working accommodation, meeting rooms, lunch rooms, ablutions and a laundry
v.
pharmacy and a pathology laboratory to replace displaced facilities
vi.
hardstand, fencing, gates, associated civil services and infrastructure services
vii.
gas storage shelter and fire tank shelter
viii.
demolition of existing facilities
2.24
Defence noted it had identified three additional project elements that had been approved by Government for delivery but were not able to be delivered within the project’s available budget.
2.25
Defence stated that:
Should any savings become available within the approved budget, achieved through competitive tendering and/or retired risk provision, it will be re-invested to deliver additional project elements listed below in priority order:
1
Vehicle Shelters within the 1st Signals Regiment compound at Gallipoli Barracks (Queensland)
2
Vehicle Shelters within the 2nd General Health Battalion compound at Gallipoli Barracks (Queensland)
3
Vehicle Shelters and Hardstand compound at Porton Barracks (Queensland)
2.26
When asked by the Committee if to what degree the project would be compromised if the additional elements were not funded, Defence stated that:
There are no compromises in the ability to do simulation training or compromise of maintenance; it’s compromises in the number of shelters, which we can live with for now. It's not ideal, but it is manageable.
Community consultation
2.27
In its submission to the Committee, Defence stated it had engaged with a variety of internal and external stakeholders during the project development phase.
2.28
Defence stated in their submission that the project would benefit the local communities as:
Defence and the Managing Contractor and Head Contactors actively promote opportunities for small to medium local enterprises through construction trade packages. There may be opportunities for indigenous business involvements in accordance with the Indigenous Procurement Policy.
2.29
When questioned by the Committee as to Defence’s definition of ‘local’, Defence responded that:
Every state and territory has their own definition of local as well. For instance, for the Northern Territory, the NT government defines local as being the entire Territory. So to avoid having Defence arbitrarily put, say, a 50-kilometre radius or a 100-kilometre radius or use our own definition, we ask industry, in their consultations, to define what they feel the local is for their areas. They'll do that in consultation with bodies like chambers of commerce et cetera, so that it's a pragmatic view of what local is.
2.30
At the public hearing Defence told the Committee that its prime contractors were ‘contractually required as part of that tender documentation to include a Local Industry Capability Plan.
2.31
Defence stated that this requires the contractor to demonstrate they have ‘extensively consulted with local businesses; that they have a good knowledge of what the local business capacity and capabilities are; and that they have structured… the subcontract packages to enable the opportunity for those local firms to bid.’
2.32
The Committee received a submission from the Gallipoli Precinct Action Group in relation to the proposed works at Gallipoli Barracks, Brisbane.
2.33
At the public hearing, the President of the Gallipoli Precinct Action Group (GPAG) stated that:
The three local residential side streets adjoining Lloyd Street, which is the main access road to Gallipoli Barracks, have been used and continue to be used in unsafe ways by persons who are contractors associated with Gallipoli Barracks. This needs to remedied and can be addressed in an appropriate traffic management plan. However, it is very important to note that the local community does not wish to see projects such as this delayed and wants to work effectively with Defence, not only so projects can be delivered in a timely minimal disruption and impact on local residents' safety and amenity.
2.34
In addition, GPAG raised concerns with the ‘lack of timely community consultation’, stating that in February 2020:
…residents living in close proximity to the main Lloyd Street entrance to Gallipoli Barracks received notification via letterbox drop of community consultation regarding the LAND 121 facilities project just three days prior to the scheduled meeting time and 19 days after submissions to the Public Works Committee had closed.
2.35
Defence stated that it was ‘continuing to engage with residents surrounding Gallipoli Barracks and the GPAG through the Base Community Liaison Officer’ with regards to concerns related to construction noise and the impact of construction traffic accessing Gallipoli Barracks.
Cost of the works
2.36
The proposed LAND 121 Stage 5B Facilities Project has an estimated cost of $183.3 million, exclusive of GST.
2.37
Defence noted in their public submission that an increase in net operating costs is expected as a result of the proposed works. Defence explained that this is ‘due to the addition of new facilities and infrastructure which will increase the associated facilities maintenance, cleaning and utilities expenses’.
2.38
Defence provided further details on project costings in its confidential submission and during an in-camera hearing.
2.39
The Committee is satisfied that the costings for the project provided to it have been adequately assessed by the proponent entity.
Revenue
2.40
There will be no direct revenue generated by the project.
Committee comment
2.41
The Public Works Committee acknowledges the large amount of work Defence has already completed in facilitating the LAND 121 Vehicle Acquisition Program, and acknowledges the phased approach of the program.
2.42
The Committee recognises the important role that large scale Defence projects such as the works proposed as part of the LAND 121 stage 5B facilities project play in creating job opportunities and advancing local industry in regional areas across Australia.
2.43
The Committee encourages Defence to continue to work together with the Gallipoli Precinct Action Group, and the Defence Community Liaison Officer to resolve the issues surrounding traffic management of contractors on the base.
2.44
With regards to community consultation, the Committee reminds Defence to build into its project plans adequate time for the Community consultation process. In particular, Defence should provide members of the community adequate time to raise questions and concerns with both Defence and the Public Works Committee.
2.45
The Committee encourages representatives of the Gallipoli Precinct Action Group to provide the Committee with ongoing feedback regarding any issues that it does not feel are being adequately addressed by Defence with regards to the works at Gallipoli Barracks.
2.46
The Committee did not identify any issues of concern with the proposal and is satisfied that the project has merit in terms of need, scope and cost.
2.47
Having regard to its role and responsibilities contained in the Public Works Committee Act 1969, the Committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit for purpose, having regard to the established need.
2.48
The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed works: LAND 121 Stage 5B Facilities Project.
2.49
Proponent entities must notify the Committee of any changes to the project scope, time, cost, function or design. The Committee also requires that a post-implementation report be provided within three months of project completion. A report template can be found on the Committee’s website.