Additional Project Information

Table 3.3 shows additional information for significant projects that were not listed in the Top 30 in the Portfolio Budget Statements 2007-08 due to the timing of their approval.

Table 3.3 Additional project information
expenditure to
30 June 2007

Amphibious Deployment
Amphibious Ships JP 2048
Phase 4A
2,949 24 1 151 220 69
New Air Combat Capability
Bridging Air Combat Capability AIR 5349 Phase 1 3,156 55 548 235 285 50
Bridging Air Combat Capability - Weapons AIR 5349 Phase 2 164 - 25 4 5 1
Air Warfare Destroyer Program
AWD Build[1] SEA 4000
Phase 3
7,197 - - 299 441 142
Total   13,466 79 574 689 951 262


  1. SEA 4000 Phases 2 and 3.1 have been closed and combined with SEA 4000 Phase 3.

Amphibious Deployment

JP 2048 Phase 4A/B—Amphibious Ships

Contractor: BAE Systems Australia (formerly Tenix Defence)

This project will acquire two 27,000-tonne Amphibious Ships to replace the Heavy Landing Ship HMAS Tobruk and one of the two Amphibious Transports (either Manoora or Kanimbla).

Following negotiations, a contract for the supply of two Amphibious Ships was signed with BAE on 9 October 2007 and took effect from 23 November 2007.

Following contract signature, the project placed a resident team in Spain to monitor progress and develop operator data with the 'parent navy', Spain's Armada Española.

The hulls will be built and fitted out in Spain and transported to Australia. The superstructures will be constructed, fitted out and integrated with the hulls by the contractor at its Williamstown dockyard, Melbourne. L3 Communications is subcontracted by the prime contractor to supply the communications system and Saab Systems Australia to provide the combat system and integrate the combat management system.

The Project completed the Systems Requirement Review in February 2008. First steel was cut for the first ship on 23 September 2008. The hulls will arrive in Australia in July 2012 and February 2014 respectively. Delivery and acceptance of the ships is to occur in December 2013-January 2014 and July-August 2015. An in-service support strategy is currently being developed. The initial support contract is to be in place 12 months before first ship delivery.

The project has reported an overspend in budget for 2007-08. This was due to the instability of preliminary (2006) estimates of price indexation and scheduling of payment milestones.

The main risk of technical regulatory acceptance is being mitigated through early engagement and rigorous oversight of technical and engineering issues. These risks are assessed as high.

Air Warfare Destroyer

SEA 4000 Phase 3—Air Warfare Destroyer (Build)

Photo of Air Warfare DestroyerContractor: Alliance contract between ASC AWD Shipbuilder Pty Ltd, Raytheon Australia Pty Ltd and the Commonwealth represented by the DMO. The Commonwealth also has a contract with Navantia SA as the Platform System Designer and a Foreign Military Sales arrangement with the US Navy for the supply of the core Aegis Combat System.

The key outcomes of Phase 3 will be the finalisation of detailed design, construction of the ships, set to work of the Aegis Combat System and platform systems, test and trials and ultimately the delivery to Navy of three Air Warfare Destroyers (AWDs) and their support system. The support system includes crew training, technical documentation, shore facilities, maintenance schemes and spare parts inventories.

The Alliance Based Target Incentive Agreement between the Alliance participants; the Commonwealth, ASC AWD Shipbuilder Pty Ltd and Raytheon Australia Pty Ltd was signed on 4 October 2007. The Platform System Design contract between the Commonwealth and Navantia SA was also signed on 4 October 2007. The effective date for both contracts and the start of Phase 3 of the project was 5 October 2007.

The major project milestones achieved during 2007-08 were the production of Aegis equipment such as the AN/SPY-1D(V) radar antennas, the AWD System Functional Review in April 2008 and the project's Integrated Baseline Review in June 2008. The Alliance released a range of requests for proposals covering combat system equipment and hull block and module fabrication. Infrastructure work progressed on schedule at the South Australian State Government's Common User Facility and ASC shipyard.

With the tight national labour market, there is a risk the AWD Alliance will not recruit the required skilled workforce. In mitigation, the Alliance has a strategy to execute recruiting plans early and has retained flexibility in major supplier selections like the block fabrication contracts to distribute work around Australia to align with industry capacity.

If information from equipment vendors is not available when required by the Platform System Designer (Navantia), there will be a delay in delivering production data packages to block fabricators. To mitigate this risk, the Alliance has a two-pronged strategy; to work closely with vendors and the staged release of information to the Platform System Designer.

The sale of ASC poses challenges to the successful outcome of the AWD project. This risk is assessed as medium and is being mitigated initially through close collaboration and cooperation between the Department of Finance and Deregulation and the DMO. Within the Alliance, both the DMO and Raytheon will need to work closely with the new ASC owner to minimise any project disruption.

The readiness of shipyard infrastructure in Adelaide to support block fabrication in late-2009 is critical to the successful start of hull construction. Any delay in completing this infrastructure work is likely to affect the schedule for first ship delivery. All parties are working cooperatively together to ensure the facilities are delivered on schedule. To date, the Common User Facility and ASC shipyard construction is on schedule.

Bridging Air Combat Capability (Super Hornet)

AIR 5349 Phase 1—Bridging Air Combat Capability

Contractor: The Boeing Company under a Foreign Military Sales (FMS) arrangement with the United States Government

The project was considered and approved by Government in March 2007 with a total program approved cost of $6.6b including acquisition of 24 aircraft, weapons, facilities and all estimated support costs. The project is being managed by the DMO under two separate project phases. Phase 1 manages the aircraft and related support systems. Phase 2 manages weapons and related support systems.

The through-life support element of the Phase 1 program includes all support and personnel costs. Defence is developing a sustainment concept that utilises existing US Navy support arrangements where practical to reduce risk. Direct commercial arrangements are being developed to establish an intermediate maintenance capability in Australia at RAAF Amberley.

The first four aircraft are scheduled for delivery in the second quarter of 2010. Initial operational capability will be achieved in December 2010 and final operational capability will be achieved in December 2012. An accelerated schedule is possible due to the 'off the shelf' nature of the acquisition.

Variation in budget spend was due to a higher than planned Termination Liability payment request by the US Navy. The impact to 2008-09 forecasts and future Termination Liability forecasts is still being assessed.

The acquisition and delivery of Super Hornet aircraft remains low risk. Establishment of logistics support to meet Initial Operational Capability (IOC) requirements is medium risk. The risk is being mitigated through access to existing US Navy and Australian support arrangements.

AIR 5349 Phase 2—Bridging Air Combat Capability—Weapons

Contractor: Foreign Military Sales (FMS) arrangements with the US Navy

This project will acquire and introduce into service a number of new weapons and countermeasures under the Australian Super Hornet Program. These weapons will significantly enhance the ADF's ability to conduct land and maritime strike operations. This project is running concurrently with AIR 5349 Phase 1 to ensure IOC for the Bridging Air Combat Capability is achieved by December 2010.

Defence has established FMS cases for the acquisition of AIM-9X Sidewinder missiles, AGM-154 Joint Stand Off Weapon and Infrared Flares, as well as seeking to acquire additional AIM-120, Advanced Medium Range Air to Air Missiles. Delivery of the first weapons is expected by December 2009.

The program IOC and Final Operating Capability (FOC) dates of December 2010 and December 2012 respectively do not allow for any significant schedule slippage. There is a medium schedule risk related to US Navy contracting and delivery of a number of developmental weapon systems. These weapon systems were originally scheduled to be available to support IOC. This risk has been mitigated by acquisition and/or use of currently In-Service weapon variants to support IOC, with all currently developmental weapon variants now to be acquired in time to meet FOC.

Previously Reported Projects

Some projects dropped below the top 30 in 2007-08. Details are available on the internet version of this volume at