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 (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