Monday, February 18, 2013

Submarine Project Overwhelmed by Technology

The $5 billion Australian Submarine project was overwhelmed by rapid developments in the IT industry from the early 1980’s. These developments occurred between the design phase and final sea trials. The McIntosh and Prescott review concluded that “the main problem is the extremely rapid rate of technological change, which can give rise to new technologies which could do the job far better emerging during the course of the contract” (McIntosh & Prescott, 1999, p. 6), which led to systems incapable of performing at the required level for military operations.

Over the life of the project, text-based computer interfaces evolved into graphical interfaces. What previously required 49 keystrokes on the systems available at the design stage could be completed with a single click of a mouse on those systems available at the time of launch. The structure of the construction contract prevented adequate adaptation to the rapidly changing environment. The project was touted as ‘on time’ and ‘on budget’, but the deliverable was technologically obsolete.

The central problem of the combat system cost US $900 million to rectify (Hawthorne, 2007) and compromised a nation’s ability to deter regional instability (McIntosh & Prescott, 1999). Perhaps a much later design freeze would have allowed the Submarine project to leverage a more current range of technologies.

It is worth reiterating Laufer’s (1997) view that it is best to proceed first with the components least subject to change, followed by the most variable components. It might be assumed this also applies to project contracts and may have been a better approach for the Collins Submarine project, by delaying the weapons system contract until later in the project. There is ongoing debate on the relative benefits of fixed price versus cost-plus contracts. On the one hand, the rigidity of the fixed price Collins submarine contract was believed to have contributed to the installation of obsolete computer systems that required immediate replacement at great cost (McIntosh & Prescott, 1999). On the other hand, there is a belief that cost-reimbursement contracts create inducements to inflate costs, or avoid cost reduction measures. As McIntosh and Prescott (1999, p. 5) asserted:

For a relatively routine product or one where the specifications are clear and unambiguous and where payment is made mostly on delivery, (a fixed price contract)…can work well. However, for a large, complex and new project, for which a design does not exist in detail and for which generous up-front payments are made, its effect can be deleterious. Particularly in the later stages, it can encourage the supplier to contest the specifications, and their interpretation, and to avoid responsibility wherever possible to protect profit…
My research participants shared ideas on suitable planning styles for dynamic environments. I'll share them another time.

Simon Collyer

Collyer, S., Warren, C., Hemsley, B., & Stevens, C. (2010). Aim Fire Aim - Project Planning Styles in Dynamic Environments Project Management Journal, 41(4), 108-121. doi: 10.1002/pmj.20199
Collyer, S., & Warren, C. M. J. (2009). Project Management Approaches for Dynamic Environments International Journal of Project Management, 27(4), 355-364
Garran, R. (1999, July 2nd). $500m To Save Our Subs Minister Orders Project Overhaul, The Australian.
Garran, R. (1999, July 2nd). Defence management out of its class, The Australian.
McIntosh, M. K., & Prescott, J. B. (1999). Report to the Minister for Defence on the Collins Class Submarine and Related Matters. Department of Defence. Retrieved from
Laufer, A. (1997). Simultaneous Management: Managing Projects in a Dynamic Environment: American Management Association.