The National Audit Office has slammed the Commonwealth Environment and Energy Department procurement process for Australia's next icebreaker.

In a damning report, the auditor found the replacement for the ageing Aurora Australis was poor value for money.

In April last year, Sydney-based DMS Maritime was awarded the $2 billion contract to operate and maintain the new ship over 30 years and oversee its construction in Romania.

The report showed the department's tender process was largely non-competitive and the delivery of the new ship was now due in 2020, years later than first envisaged.

Among several concerns was the department's decision to adopt a "design, build, operate and maintain" (DBOM) model, which resulted in just one tender.

Key findings of the report:

The procurement process was largely non-competitive resulting in costs exceeding benchmarks established by the department. The department, therefore, cannot demonstrate it provided value with public resources.

The procurement process was largely non-competitive resulting in costs exceeding benchmarks established by the department. The department, therefore, cannot demonstrate it provided value with public resources. There was no consultation with the shipbuilding industry on its appetite for participating under a DBOM procurement approach.

There was no consultation with the shipbuilding industry on its appetite for participating under a DBOM procurement approach. The request for tender (RFT) process prevented industry from submitting any alternatives to the department's preferred DBOM. This resulted in two of the three shortlisted respondents withdrawing.

The request for tender (RFT) process prevented industry from submitting any alternatives to the department's preferred DBOM. This resulted in two of the three shortlisted respondents withdrawing. Substantial changes to contract provisions were made during negotiations. The initial operate and maintain contract term was reduced to 10 years and delivery was switched from Hobart to Europe.

The Aurora Australis has been serving the Australian Antarctic bases for 25 years. ( Supplied: Australian Antarctic Division/Tony Fleming )

Icebreaker delivery twice as long as expected

The report also noted that with icebreaker not due to become available until 2020, the whole process will have taken twice as long as originally expected.

The audit said the department presented design and build cost estimates to the Government that were up to four times higher than of a comparable vessel, the South African Agulhas II.

The price tag for the new ice breaker is $530 million, not including its operating costs, whereas the South African ship cost $150 million to build in 2012.

The audit also revealed criticism from P&O Cruises, which owns the existing icebreaker the Aurora Australis.

"As we have communicated previously, we believe there are substantial flaws in the procurement philosophy that will not allow P&O Maritime to deliver a competitive and value for money proposal," P&O Maritime said when it withdrew from the RFT stage in December 2014.

The Department has defended the cost, saying its process was robust and of a high standard.

"Department does not consider the process was largely non-competitive and the outcome was excessively higher than its benchmarks," the response said.

"Department would point to the comprehensive scrutiny and consideration given to the procurement and the cost modelling by Government agencies."

Waste of taxpayers' money: Greens

Greens senator Peter Whish-Wilson accused the Government of wasting taxpayers' money.

"I'm very angry because this Government has done nothing but cut funding to Antarctic and Southern Ocean science," he said.

"And here we get an independent audit of the Government's replacement vessel showing that it's significantly over budget."

The Tasmanian senator said the audit raised serious questions about the Environment Department and its Minister Josh Frydenberg's ability to handle large projects.

"The Government's whole strategy and approach to Southern Ocean science has been chaotic to say the least and now we find that the centrepiece of their political strategy is itself in chaos," he said.

The Minister has been contacted for comment.