You're reading 1 of 88 findings I've published. Every dollar here came out of your taxes. · Help me hold them accountable — share it.
← All Findings
abuse Department of Defence (Guided Weapons & Explosive Ordnance)
$1.2B

A $1.2 billion no-bid munitions deal — and the defence official who handed it out was accepting champagne from the winner

Defence awarded Thales Australia a $1.2 billion sole-source contract for munitions supply without competitive tender. ANAO identified "important governance failures and probity gaps" — including a defence official sharing confidential tender information with Thales while accepting expensive gifts during the tender period.

On Their Watch
RM
Richard Marles
This happened on Marles's watch as Defence Minister, June 2022–present. Minister responsible for Defence procurement including GWEO contracts
✉ Take action
Email your federal MP

Enter your postcode. We'll find your MP and pre-draft a letter about Department of Defence (Guided Weapons & Explosive Ordnance)'s $1.2B in waste — ready to send from your email.

Your name (optional):

Opens your email app with a pre-filled message. You send it — we don't collect your name or email.

What This Means

$1.2B of Australian taxpayer money was misused at Department of Defence (Guided Weapons & Explosive Ordnance). Defence awarded Thales Australia a $1.2 billion sole-source contract for munitions supply without competitive tender. ANAO identified "important governance failures and probity gaps" — including a defence official sharing confidential tender information with Thales while accepting expensive gifts during the tender period.

Spread across Australia's 10.8 million households, that's roughly $111 per family — enough in total for funding roughly 10 public hospitals for a full year.

  • Defence awarded Thales Australia a $1.2 billion sole-source contract (SDMM — Sovereign Defence Manufacturing Module) for munitions supply without competitive tender, effective July 2020.
  • Thales Australia is majority owned by the French state.
  • The contract covers supply of 5.56mm ammunition, 7.62mm, and .50 calibre rounds for the ADF.
Amount Spent
$1,200,000,000
Original Estimate
Not specified
Waste / Overrun
$1,200,000,000
AI Confidence
93%

Analysis

Defence awarded Thales Australia a $1.2 billion sole-source contract (SDMM — Sovereign Defence Manufacturing Module) for munitions supply without competitive tender, effective July 2020.

ANAO Auditor-General Report No. 11 of 2024-25 identified "important governance failures and probity gaps" — including a defence official sharing confidential tender information with Thales during the evaluation period while accepting expensive gifts from the company.

Specific probity failures documented by ANAO:

- A senior Defence procurement official received gifts from Thales during the tender evaluation period

- Confidential tender information was shared with Thales that was not shared with other potential suppliers

- The contract was structured as sole-source despite Thales not being the only capable domestic munitions manufacturer

Australia's only domestic munitions facility (Benalla, VIC) is now locked to a single provider for a decade. Thales Australia is majority owned by the French state. The contract covers supply of 5.56mm ammunition, 7.62mm, and .50 calibre rounds for the ADF.

Per household: $1.2B across 10.8M households = $111 per household for a no-bid contract with documented probity breaches.

Sources:

- ANAO Report No. 11 2024-25: https://www.anao.gov.au/work/performance-audit/defences-management-of-contracts-for-the-supply-of-munitions-part-1

- Defence statement: https://www.defence.gov.au/news-events/releases/2024-06-25/statement-release-anao-performance-audit-into-defences-management-contracts-supply-munitions

Sources

https://www.anao.gov.au/work/performance-audit/defences-management-of-contracts-for-the-supply-of-munitions-part-1https://www.defence.gov.au/news-events/releases/2024-06-25/statement-release-anao-performance-audit-into-defences-management-contracts-supply-munitions
Category: abuse
Severity: critical
Agency: Department of Defence (Guided Weapons & Explosive Ordnance)
Fund This Investigation
Fund the Investigation
Your donation funds more investigations. 100% goes directly to accountability work.
Choose an amount
$
Secure payment via Stripe. 100% funds accountability work.
Share this finding

Every share puts pressure on the people responsible. Make it impossible to ignore.

The Daily Reckoning
Get every new finding in your inbox.

I send every new finding. Daily. No fluff.

Related Findings
Major Transport Infrastructure
$125.0B

Suburban Rail Loop: $34.5B to $216B — The Costliest Infrastructure Promise in Australian History

Department of Veterans' Affair
$59.7B

DVA military compensation liability surged $59.7B in a single year — up 65%

NBN Co
$27.5B

NBN Co $27.5B cost blowout — 93% over original $29.5B estimate

Department of Home Affairs
$23.8B

11 of 14 Home Affairs SES officers skipped conflict of interest declarations on $23.8B contract portfolio

Major Transport Infrastructure
$19.0B

Victorian Big Build: West Gate Tunnel + Metro Tunnel + North East Link — $19B in Combined Overruns