3. Russell Offices Buildings 5 and 6, Infrastructure Upgrade Project

The Department of Defence (the Department) seeks approval from the Committee to proceed with the proposed Russell Offices Buildings 5 and 6, Infrastructure Upgrade Project at Russell in the Australian Capital Territory.
The estimated cost of the project is $75.4 million (excluding GST).
The project was referred to the Committee on 2 March 2017.

Conduct of the inquiry

Following referral, the inquiry was publicised on the Committee’s website and via media release.
The Committee received two submissions and one confidential submission. A list of submissions can be found at Appendix A.
On 5 May 2017, the Committee conducted a public and in-camera hearing. A transcript of the public hearing is available on the Committee’s website.

Need for the works

Russell Offices Building 5 (R5) and Building 6 (R6) and their annex, house the Australian Signals Directorate (ASD) which maintains a 24 hour per day, seven days per week operations to provide signals intelligence and information security to Australian Government and the Australian Defence Force.
ASD has a range of computing capability including systems which support the provision of signals intelligence, geospatial intelligence and intelligence assessments which are supported by the building infrastructure.1
R5 is a hub for many secure Government communication services including those which support Australian Defence Force units which are deployed and also those which provide connectivity with Australia’s international allies. R5 also holds Australia’s cryptographic key material (keymat) production which supplies keymat to all Australian Government secure communications systems.2
The Department notes that there is no possibility of expansion to address potential increases in staff numbers:
The building population has reached its limit and ASD consider that further growth in building occupancy is unlikely due to the current building services capacity and spatial constraints.3
Both buildings have undergone a number of refits and refurbishment works over time to address office accommodation deficiencies. There have been no comprehensive upgrades to critical engineering services during the life of the buildings.
The base building engineering infrastructure, both mechanical and electrical, has been assessed to have reached end of life at best and at worst, have passed their design life. The Department notes:
The age and condition of existing building services infrastructure presents a significant operational and capability risk to ASD.4
As well as the service infrastructure, the existing foyer of R5 is not compliant with Defence security requirements and is a source of congestion for staff at peak times.5
The Department highlighted the risk from not taking any action:
If the infrastructure upgrade works are not undertaken, there is a significant risk of a major failure to critical systems and the consequent shutdown of ASD capability and operations. There is also an increasing risk to service and maintain the existing aging systems due to the high risks and costs associated with reactive maintenance.6
A representative from the Australian Signals Directorate explained what would be likely if there was a shutdown at R5 and R6.
This would mean that we could no longer provide signals intelligence and, to a large extent, geospatial intelligence to the Australian government and the Australian Defence Force. It would also mean that many of our secure communications links would be shut down. Lastly, our workforce of around 1,900 personnel in those two buildings would not be able to perform their functions and that would have an impact on the signals intelligence mission.7

Scope of the works

The Department’s submission outlined the project objectives, which are to provide new and upgraded infrastructure to R5 and R6 to provide reliable and efficient services that are fit for purpose, compliant and provide value for money to support the mission critical operational requirements of ASD for the next 20 years.8
The Department outlined the scope of works required to upgrade the infrastructure of R5 and R6:
Emergency power systems upgrade (new diesel generator building and infrastructure), which will improve reliability, increase generating system capacity and support critical services;
Electrical distribution infrastructure replacement and upgrade to replace specific components of the electrical infrastructure that has reached or exceeded end of design life and cannot be assured to function safely or effectively. This includes upgrade to the main switchboards, distributions boards and uninterruptible power supplies;
Building works to upgrade and modify the layout of the main entry foyer compliance, improve accessibility and security controls / management;
Security system, access control and closed circuit television (CCTV) systems upgrades to rectify existing aged systems infrastructure and devices that limit capability for incident identification, investigation and response;
Mechanical systems upgrade to provide appropriate levels of cooling to critical ICT systems within the communications rooms throughout the building;
Fire system protection upgrade including replacement of fire indicator panel and installation of smoke detection system for critical spaces; and
Provision of on-site water storage to serve as a back-up water supply in case of town supply failure to maintain the required temperature for the critical IT facilities.9

Cost of the works

The estimated cost of the project is $75.4 million (excluding GST). It includes the construction costs, management and design fees, furniture, information communications technology, fitting and equipment, contingencies, escalation and professional fees.
The Committee received a confidential supplementary submission detailing the project costs and held an in-camera hearing with Defence on the project costs.
The Committee is satisfied that the costings for the project provided to it have been adequately assessed by the proponent entity.

Committee comment

The Committee did not identify any issues of concern with the proposal and is satisfied that the project has merit in terms of need, scope and cost.
Having regard to its role and responsibilities contained in the Public Works Act 1969, the Committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit for purpose, having regard to the established need.

Recommendation 2

The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed work; Russell Offices Building 5 and 6, Infrastructure upgrade project.
Proponent entities must notify the Committee of any changes to the project scope, time, cost, function and design. The Committee also requires a post–implementation report be provided within three months of a project completion. A report template can be found on the Committee’s website.

  • 1
    Department of Defence, Submission 1, p. 4
  • 2
    Department of Defence, Submission 1, p. 4
  • 3
    Department of Defence, Submission 1, p. 5
  • 4
    Department of Defence, Submission 1, p. 5
  • 5
    Department of Defence, Submission 1, p. 5
  • 6
    Department of Defence, Submission 1, p. 5
  • 7
    Mr Jim Mapeltoft, Australian Signals Directorate, Transcript of evidence, 5 May 2017, p. 1.
  • 8
    Department of Defence, Submission 1, p. 10
  • 9
    Department of Defence, Submission 1, p. 6

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