Defence blew $1.8 billion over budget on IT projects — and they still don't work properly
Defence's 12 biggest IT contracts all went over budget, by an average of 47%. The total blowout: $1.8 billion above what was approved. 11 of 12 contracts had no proper performance targets. Average project delay was 22 months. Vendor lock-in on 9 contracts, with no plan to get out.
On Their Watch
RM
Richard Marles
This happened on Marles's watch as Defence Minister, June 2022–present. Minister for Defence when ANAO audited the 12 overrunning contracts
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What This Means
What happened
$1.8B of Australian taxpayer money was wasted at Department of Defence. Defence's 12 biggest IT contracts all went over budget, by an average of 47%. The total blowout: $1.8 billion above what was approved. 11 of 12 contracts had no proper performance targets. Average project delay was 22 months. Vendor lock-in on 9 contracts, with no plan to get out.
Why it matters
Spread across Australia's 10.8 million households, that's roughly $167 per family — enough in total for funding roughly 15 public hospitals for a full year.
What the evidence shows
The ANAO performance audit of Defence ICT contracts found systemic failures in cost estimation, vendor management, and project governance.
Vendor lock-in was identified as a risk in 9 of 12 contracts with no mitigation strategy in place.
The $1.8 billion in overruns represents taxpayer funds spent beyond what was originally approved, without commensurate increases in delivered capability.
Amount Spent
$5,600,000,000
Original Estimate
$3,800,000,000
Waste / Overrun
$1,800,000,000
Cost Overrun
47%
Analysis
The ANAO performance audit of Defence ICT contracts found systemic failures in cost estimation, vendor management, and project governance. Average schedule delays were 22 months. Vendor lock-in was identified as a risk in 9 of 12 contracts with no mitigation strategy in place. The $1.8 billion in overruns represents taxpayer funds spent beyond what was originally approved, without commensurate increases in delivered capability.