Saturday, November 2, 2024

Defence official sought champagne from French company during $1.2 billion munitions contract discussions

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The auditor-general has revealed a Defence employee gave confidential information to a foreign-owned defence contractor and solicited a bottle of champagne ahead of a billion-dollar munitions deal, and then joined the business after it was awarded the lucrative contract.

In a scathing report, the Australian National Audit Office (ANAO) has detailed evidence of “unethical conduct” involving a 10-year contract for French company Thales to run two Commonwealth-owned munitions facilities considered crucial for future domestic missile production.

Acting Auditor-General Rona Mellor has found the defence giant received the $1.2 billion contract to run the Mulwala and Benalla ventures in 2020, despite an assessment finding its bid was “deficient”, “high risk” and did not offer value for money.

“Defence’s management of probity was not effective and there was evidence of unethical conduct,” the ANAO report tabled on Tuesday concluded.

Domestically, the Australian military relies on supplies produced at the Mulwala Explosives Factory on the NSW-Victoria border as well as the Benalla Munitions Facility north-east of Melbourne, both of which have been run by Thales since 1999.

In 2016, negotiations began for a long-term contract to ensure “surety of supply of key munitions and components”, and involved what the ANAO described as a “complex multi-year” non-competitive procurement.

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