The Australia Defence Association says the Defence Department is to blame for the cancellation of the Seasprite helicopter contract.
Federal Defence Minister Joel Fitzgibbon has announced the Government will scrap the project, which has already cost $1 billion.
Mr Fitzgibbon has blamed the Opposition for the project, which the former Howard government decided against scrapping.
But the Association's executive director, Neil James, says problems within the Defence Department bureaucracy led to the project's failure.
"All the things that have gone wrong with defence procurement over the last 30-odd years have occurred under governments of both political persuasions and they've largely occurred for reasons outside party politics," he said.
The Association also says the defence force will have to continue to rely on a limited number of sea hawk helicopters after the scrapping of the Seasprites.
Mr James says the Government needs to quickly order replacement helicopters.
"We've just been lucky that none of the defence crises that we've faced over the last few years have been ones that have required exactly this capability, but there's no certainty that our luck will continue into the future," he said.
'Overdue decision'
Mr Fitzgibbon says the decision to scrap the helicopters should have been taken sooner.
He says the previous Government considered dropping the project and should have done so.
"Well it's obvious to all and sundry that this decision should have been made some time ago," he said.
"[Opposition Leader] Brendan Nelson had the opportunity to make this decision last year and failed to do so - because they had ownership of the project and this was a difficult decision to make in an election year."
The Opposition's defence spokesman, Nick Minchin, says he agrees that it is time to cancel the contract now.
But he has defended the decision to persist with it last year.
"Despite Brendan Nelson as the minister for defence formally recommending that we cancel, the government on balance thought that given the cost to taxpayers, we needed to make one last effort to see if we could make this thing work," he said.
