Top 30 Project Descriptions

Aerospace Systems Division

ADF Air to Air Refuelling Capability - AIR 5402

Prime Contractors:

This project will acquire five Airbus A330 Multi-Role Tanker Transport (MRTT) aircraft - to be known as the KC-30A in Air Force service. The acquisition also establishes the infrastructure necessary to deliver through-life support services, including engineering, maintenance, spares, technical data, software and training support for the new fleet. The through-life support contract was signed with Qantas in February 2007, with commencement aligned with acceptance of the first modified A330 aircraft.

The second phase of conversion and ground test activities of the first aircraft was completed in December 2008, allowing the commencement of second phase flight testing. A series of three developmental flight test sub-phases has been inserted into the program in readiness for certification and qualification testing. Airbus Military has so far successfully completed the validation of refuelling pod aerodynamics, A330 MRTT tanker and receiver flight control laws, performance of the new refuelling boom in free flight, and conduct of a series of ‘dry contacts’ with a Spanish F/A-18 fighter. The third developmental sub-phase will test ‘wet contact’ fuel transfers in October 2009.

Notwithstanding the satisfactory outcome of the flight testing to date, Airbus Military has experienced delays with completion of conversion activities and has expanded the scope of testing needed to confirm the performance of the military modifications. The project is running approximately 14 months behind the contract baseline schedule, with further delays identified to complete remaining testing.

The second aircraft, which is the first to be converted in Australia, was inducted into the Qantas Australian Conversion Centre at Brisbane Airport in June 2008. Conversion is nearing completion, with additional Qantas and Airbus Military resources applied to manage additional conversion scope. The third aircraft was delivered to the Qantas Australian Conversion Centre in June 2009.

Completion of installation and testing of the new refuelling and military avionics systems during 2008-09 has confirmed system performance with no significant issues identified to date. Nevertheless, there remains a medium level of technical and schedule risk associated with certification and qualification testing. The second aircraft will return to Madrid, Spain around October 2009 to join the first aircraft for completion of qualification testing and additional training and receiver clearance activities to support achievement of an Initial Operational Capability (IOC) by end-2010.

F/A18 Hornet Upgrade - AIR 5376 Phase 2

Prime Contractors:

This project is designed to upgrade the RAAF F/A-18 Hornet fleet incorporating avionics and hardware enhancements to improve mission situational awareness. Air defence tasks will be performed more effectively through the upgrade of the radar and electronic warfare capabilities.

The upgrade includes: full colour displays, moving map capability, secure data link, a helmet mounted cueing system, an upgraded countermeasures dispensing system, a new electronic countermeasures jammer, and new radar warning receivers.

Fleet modification of the pilot situational awareness system, including cockpit displays, was completed in December 2008. Acquisition contracts for the electronic countermeasures jammer and supplementary countermeasures dispensing system were signed in May 2008 and July 2008 respectively. The first deliveries of the ALR-67 (V) 3 radar warning receiver arrived in Australia in February 2008. The interim electronic warfare capability was introduced in November 2008. The mature electronic warfare production program commenced in May 2009 and is planned to be complete by late 2012.

Key risks are the development and integration of software associated with new and disparate systems. To alleviate the risks, an iterative development and testing regime including aircraft prototype testing is being used in conjunction with subject matter expert consultation. This is enabling early identification and resolution of integration issues with a systems integration laboratory established in the US. The risks continue to be assessed as medium.

F/A18 Hornet Upgrade - Structural Refurbishment - AIR 5376 Phase 3.2

Prime Contractors:

The centre barrel is the primary load bearing structure in the Hornet fuselage for the transfer of flight loads from the wings to the fuselage and is the most significant component of the Hornet airframe in terms of aircraft life. Based on accrued airframe fatigue, the Hornet Upgrade Phase 3.2 is replacing the centre barrels of selected aircraft.

In May 2008, an engineering study was completed that showed the fatigue life of the Hornet centre barrel could be extended beyond the current limits, resulting in a reduction in the number of aircraft requiring Centre Barrel Replacement. Defence plans to re-scope the project to reduce the number of Centre Barrel Replacements to 10.

The first two prototype Centre Barrel Replacement aircraft have been returned to the fleet. Aircraft three to six have had their centre barrels replaced and are undergoing rebuild at RAAF Base Williamtown, NSW. Aircraft seven to ten are in Canada undergoing centre barrel replacement.

Although the project is proceeding to plan, some aircraft required significant additional work due to severe nacelle cracking identified during Centre Barrel Replacement.

Maritime Patrol and Response Aircraft System - AIR 7000 Phase 2

Prime Contractor: The Boeing Company (USA) through a cooperative arrangement with the USN.

This project aims to acquire a manned Maritime Patrol and Response Aircraft system to replace the AP-3C Orion. This project seeks to replace the AP-3C Orion with the P-8A Poseidon through a cooperative program with the USN.

During 2008-09, the project achieved the signing of the P-8A Spiral 1 Cooperative Development Memorandum of Understanding (MoU) with the USN. The P-8A Spiral 1 Cooperative Development program allows Defence to participate with the USN in the development of the P-8A Poseidon weapon system, reducing the risks and costs for subsequent Defence acquisition. By collaborating on Spiral 1, Australia will be able to influence the development of the P-8A Poseidon, and gain insight into the broader USN P-8A program.

During 2008-09, the project also commenced negotiations with the USN on the Production, Sustainment and Follow on Development MoU for later acquisitions.

The USN P-8A program and schedule is influenced by US Government budgetary and other political decisions. Any USN delays that result from US Government decisions may have a detrimental effect on the delivery of the Australian aircraft, with a potential for follow-on impact on retention of the AP-3C Orion.

AP3C Electronic Support Measure Upgrade - AIR 5276 Phase 8B

Prime Contractor: BAE Systems Australia Limited, with Elta Systems (Elta) and GE Fanuc (US) as major sub-contractors.

This project will provide an upgrade to the AN/ALR-2001 Electronic Support Measures (ESM) System fitted to the RAAF AP-3C Orion aircraft. The ESM System is an integral part of the aircraft’s sensor suite and is used in maritime surveillance tasks to passively detect, locate, classify and track surface and airborne emitters.

The project aims to replace obsolete ESM System components in the aircraft and ground support systems. The IOC, including modification of four AP-3C aircraft, the operational mission simulator, software support facility and part task trainers, is currently planned for September 2012, which is 12 months later than contracted.

During 2008-09, contracted preliminary design reviews were completed, air and ground systems detailed design reviews are planned in the 4th quarter 2009. However, project delivery slipped by twelve months as a result of the expected synergies with Airborne Early Warning and Control (AEW&C) project not materialising.

There is an increased likelihood of further schedule slippage due to technical issues and prime and sub-contractors prioritising their resources towards the AEW&C project.

Airborne Surveillance for Land Operations - JP 129 Phase 2

Prime Contractor: Not yet selected.

This project seeks to acquire a Tactical Unmanned Aerial Vehicle (UAV) system capable of providing airborne surveillance, target acquisition and reconnaissance to support land operations.

During 2008, DMO and Boeing mutually agreed to terminate the acquisition contract due to continuing schedule delays resulting from a number of technical difficulties with system design and integration. Following termination of the Boeing contract on 4 September 2008, Defence has restarted the project with the intent to acquire an off-the-shelf system, delivered in minimum time, to meet the extant JP 129 requirement.

The project is placing strong emphasis on the acquisition of a low risk, operationally proven system that possesses a strong airworthiness history, mature support system, and well-defined capability characteristics. A key component of this requirement is tactical mobility within the battlespace.

Some minor adaption of the preferred system will also be required to preserve the tactical and sustainable nature of this capability. Defence has conducted an assessment of the cost, schedule and associated risks for the integration of Australian equipment into UAV systems to ensure an efficient introduction into Australian service.

C-17 Globemaster III - AIR 8000 Phase 3

Prime Contractor: The Boeing Company, under an FMS arrangement with the US Government.

Four Boeing C-17 Globemaster III heavy lift aircraft and associated support and equipment have been acquired and successfully transitioned into Air Force service. This capability has significantly enhanced the ADF’s ability to support national and international operations and major disaster rescue and relief efforts.

During 2008, the HALP completed training of the full initial squadron cadre of pilots, loadmasters and maintenance personnel. Specialist equipment, training and logistics support was also set in place for a high-dependency patient aero-medical evacuation capability, which has been successfully operationally utilised since September 2008. Attainment of a C-17 airdrop capability is occurring as planned, with several successful airdrop trials conducted in 2008-09 and certification now being finalised.

The project is within budget and on schedule to deliver remaining self-protection improvements, training devices, specialist role equipment and mature support arrangements. Full Operational Capability (FOC) will be achieved when mature C-17 facilities have been established. This is anticipated to occur by 2011. Project closure will occur upon delivery of final long-lead training devices, anticipated by 2014. The primary risk to the project is the delivery of effective logistics support to allow sustained C-17 operations of all four aircraft at required rates of effort. This risk is being mitigated through participating in the USAF led GSP and through the progressive delivery of increased spares and equipment holdings in 2009 and 2010.

Bridging Air Combat Capability Super Hornet - AIR 5349 Phase 1

Prime Contractor: The Boeing Company, under an FMS arrangement with the US Government.

This project was approved by the Government in March 2007, for the acquisition of 24 USN common F/A-18F Block II Super Hornet aircraft, weapons, facilities and support systems. AIR 5349 Phase 1 acquires the F/A-18F aircraft and support systems which will significantly enhance the ADFs ability to conduct land and maritime strike operations. The program remains on schedule with the first four aircraft to arrive in Australia in the second quarter of 2010. IOC will be achieved in December 2010 and FOC will be achieved in December 2012. Support of the capability will be through a combination of access to USN support contracts via FMS arrangements, and direct commercial contracts.

Production of Australia’s Super Hornet aircraft is underway at the Boeing St Louis plant. A number of aircraft are at various stages of production with the delivery of the first two in July and August 2009. These aircraft will be operated by the USN for acceptance test activity prior to delivery of the first four aircraft to Australia in second quarter 2010. Training in the USA of RAAF Aircrew and Ground Crew by USN personnel has commenced in preparation of first aircraft arrival in Australia. Significant contracts awarded by the USN include those for the aircraft, engines and flight simulators. FMS cases have also been established to support the Super Hornet capability in-service by accessing USN support arrangements.

The acquisition and delivery of Super Hornet aircraft remains low risk with arrival of the first aircraft planned to occur in the second quarter of 2010. The logistics support and infrastructure to meet IOC requirements is medium risk but risks are being progressively reduced through access to extant USN support arrangements under FMS arrangements. In country support via direct commercial arrangements are also on schedule.

Airborne Early Warning and Control Program - Project Wedgetail

Airborne Early Warning and Control Aircraft - AIR 5077 Phase 3

Prime Contractor: The Boeing Company (USA).

This project will provide Defence with an AEW&C capability, with the provision of six aircraft and associated supplies and support.

On 17 December 2008, the Commonwealth signed a Deed of Agreement (Standstill Deed) with Boeing to enable the company to undertake a modified program of test and evaluation to determine the extent to which the aircraft system meets the specification and how well it will perform operationally. Under the Standstill Deed, an independent technical review of radar performance was completed by Massachusetts Institute of Technology in April 2009 and an operational utility demonstration was conducted during EXERCISE Arnhem Thunder in April/May 2009. The test and evaluation program was planned for completion in mid 2009; however, due to delays in the conduct of test flights, it will now extend into the fourth quarter 2009. The final results of the program will assist the Commonwealth to determine the way forward for the project. Boeing now proposes to deliver the first ‘full’ capability aircraft in March 2010, a total delay of 40 months against the contract baseline. However, Defence assesses that this date is under considerable pressure. IOC is currently planned to be achieved by end 2011 and FOC by end 2012.

The first three aircraft continued to support the test and evaluation program throughout 2008-09. The sub-contractor, Boeing Defence Australia, is scheduled to complete the modification programs for the remaining three aircraft in March 2010, April 2010 and September 2010. Construction of the initial AEW&C facilities at RAAF Tindal were completed in April 2009 and construction of the main Tindal facilities is now scheduled for completion in February 2010. Final acceptance of the operational flight trainer was achieved in February 2009. Additionally, Boeing achieved Federal Aviation Administration Supplemental Type Certification and air to air refuelling certification, a first for a B-737 variant. Expenditure for 2008-09 was less than estimated due primarily to further slippage against the prime contract and signing of the associated support contract.

The risk rating for the project remains high. The major risks to the project relate to integrated system maturity, notably radar and electronic support measures technical maturity, ongoing software development and the test and evaluation completion. These risks are being actively managed through close interaction between the Commonwealth and the contractor under the Deed.

Electronic Systems Division

Next Generation Satellite Program - JP 2008 Phase 4

Prime Contractor: The Boeing Company (USA) via the US Government.

This project will deliver high priority components of the next generation satellite communication system to support the ADF, addressing the ADF’s wideband satellite communications requirements through Australia partnering on the US Wideband Global Satellite (WGS) Communication System program.

The US with an approved program for a five wideband satellite constellation offered Australia a partnership equivalent to the cost and sustainment of a sixth satellite. This will enable the expansion of the constellation to six satellites with benefits for both nations.

Second pass approval was given for the joint operations and support of the WGS Communications System on 25 September 2007. A MoU was signed on 14 November 2007 between the USAF and the DMO, approving Australia’s participation in the program.

The first satellite, with a footprint over the Pacific Ocean and Australia, was successfully launched on 11 October 2007 and became operationally available, with support from a US ground station, to Australia in June 2008. Australia has been using the first satellite. The launch of the second WGS satellite was delayed from November 2008 to April 2009 due to a number of factors including technical issues with the satellite and launch vehicle. The delay resulted in a delay in utilisation of WGS2 to support ADF operations in the Indian Ocean which were instead supported through continued use of leased wideband services or through use of other allied military satellites. The third satellite is due for launch in late 2009, and will provide coverage over the Atlantic Ocean, Europe and continental US. Progressive launches will see the fourth satellite providing coverage over Australia and the Pacific and Indian Oceans from 2012, with the fifth and sixth satellites becoming operational in 2013.

Australia’s access to capacity and coverage will increase progressively as the number of operational satellites increases. The satellite constellation’s life is planned until at least 2022, after which degradation of capability will occur; however, Australian wideband requirements are expected to be met until 2026.

The highest risk for this project is a satellite launch failure. The risk has been mitigated progressively by the successful launch of the first and the second satellites and reinforced by the good track record of the launch vehicles (100 per cent success rate since 2002 over 20 launches). Risk management rigour is being applied by the US Joint Program Office, and Australia will also obtain third party liability insurance on the launch of the sixth satellite.

Electronic Warfare and Self Protection for Selected ADF Aircraft - Echidna - AIR 5416 Phase 2

Prime Contractor: BAE Systems - Phases 2A & 2B.

Phase 2A of this project seeks to modify the S-70A-9 Black Hawk and CH-47D Chinook helicopters with Electronic Warfare Self Protection (EWSP). Phase 2B provided modification of the C-130H aircraft with EWSP.

A two stage program was devised for Echidna Phase 2A. Stage One provides a basic EWSP capability for installation in 12 Black Hawk and six Chinook aircraft comprising a missile warning system and countermeasures dispensing system which are a subset of the planned Echidna Phase 2A advanced EWSP capability.

Stage Two, for further upgrade to both aircraft types with an advanced level of EWSP capability was cancelled by Government on 15 September 2009. Defence reassessed the operational requirement and determined that the fitting of additional EWSP capabilities would have an adverse effect on aircraft availability, and that an insufficient return on investment would result from continuing the program when both Black Hawk and Chinook aircraft are nearing retirement.

All six Chinook and five of the 12 Black Hawk aircraft are now modified with the basic level of EWSP. The remaining seven Black Hawks are to be modified by mid 2010.

Phase 2B of the Echidna project involved the modification of the C-130H fleet of aircraft with a comprehensive EWSP capability based around the SPS-1000 radar warning receiver. All 12 C-130H aircraft were modified on schedule and on cost, with modification to the final aircraft completed in June 2008. This phase of the project has been successfully closed.

High Frequency Modernisation (HFMOD) - JP 2043 Phase 3A

Prime Contractor: Boeing Defence Australia Ltd.

This project will replace and modernise Naval High Frequency Stations at six sites, replace Air Force High Frequency Stations at four sites, upgrade design and performance of the replaced systems, and upgrade selected ADF mobile platforms.

The first stage of the project, completed in 2004, upgraded capability at the Navy and Air Force sites. The second stage will provide increased levels of automation, improved capability, enhanced security and survivability, reduced reliance on staff and will incorporate the new equipment into selected mobile platforms.

The prime contractor has experienced difficulties with certain complex elements of design, integration and testing. A revised schedule has been agreed with the prime contractor, such that delivery of the full final fixed network capability previously planned in 2008 will now occur in 2010. This delay has a flow on effect with regard to completion of upgrades to mobile platforms.

The project remains on budget, however failure by the prime contractor to meet schedule milestones has led to deferral of payments until actual achievement.

The major risks remaining in the project relate to installation of upgrades into mobile platforms, where platform availability may impact on the upgrade schedule.

New Air Defence Command and Control Systems for Control and Reporting Units 2 & 3 (2CRU/3CRU) - AIR 5333

Prime Contractor: Boeing Defence Australia Ltd.

This project will replace the existing air defence command and control system with two new systems located at RAAF Tindal and RAAF Williamtown. It will also design and deliver an integrated ADF air defence system communications network. Acquisition and logistic support contracts were signed with Boeing Defence Australia Ltd in March 2004.

The project is now in the integration and test phase, following close-out of the project’s critical design review in July 2008. The project also conducted an integrated baseline review in April 2009, which re-established the project’s baseline schedule to completion.

The prime contractor commenced physical installation work associated with the site at RAAF Tindal in May 2008 and this is effectively complete, with planning for the physical installation activities at RAAF Williamtown now underway. Integration and test activities for the RAAF Tindal site were expected to be largely complete in 2008-09, but delays have resulted from an underestimation of the effort required. Mitigation action is underway to address these delays and the prime contractor is applying greater resources to complete the work. The project risk remains high due to the overall complexity of integration and the large number of unique interfaces involved.

The risk for software development is being managed through the use of Commonwealth resident teams and active monitoring of prime contractor performance through software development-related metrics. These strategies reduce the risk level to medium.

The risk for integrated tactical data links is being managed through the employment of tactical data link experts, close liaison with the ADF tactical data link authority and through increasing the tactical data link expertise within the Commonwealth Project Team. This risk remains high.

Explosive Ordnance Division

Mulwala Redevelopment Project - JP 2086 Phase 1

Prime Contractor: Bovis Lend Lease.

Design and construction activities are running approximately three months behind schedule as a result of contractor delays in achieving necessary State Government planning approvals and a shortage in skilled labour. Significant design activities occurred during 2008-09, with the majority of design packages now complete.

Construction activities commenced in September 2008. Significant construction has taken place in all areas of the site and the first process equipment is in place. Practical completion is contracted for March 2010, and final acceptance in June 2011, with the new facility producing nine Defence propellants. The certification of ammunition containing the new propellants is scheduled for December 2012.

The most significant project risk is that there may be an extended transition phase from the existing plant which would adversely impact cost and schedule. This is being mitigated by close collaboration with, and provision of, technical support and advice by the existing operator through a support services contract.

There is also a risk that the strategy the contractor has employed to undertake initial construction activities, prior to completion of detailed design, and to mitigate against schedule slippage, may impact on schedule and/or capability. This risk will be realised if changes made at the detailed design stage result in rework of procurement or construction activities already commenced. This is being mitigated through detailed review of design packages and close monitoring of construction activities.

Lightweight Torpedo Replacement - JP 2070 Phase 3

Prime Contractors:

This project will establish an Australian production and support capability for the Eurotorp MU90 lightweight torpedo, and deliver a number of reserve stock rounds. The project involves the assembly of locally and internationally produced torpedo components into MU90 torpedoes using facilities at Fleet Base West, Western Australia.

Principal activities for Phase 3 during 2008-09 included the conduct of a number of commercial processes related to Australian production of torpedoes and associated equipment, and contracting for initial deliveries of equipment to support local production. The prime contractor delivered the integration and qualification test plan and acceptance test plans, and facilitated export authorisations from the French and Italian Governments for torpedo components. The MU90 specific Torpedo Maintenance and Integration Facility in HMAS Stirling, Western Australia was officially opened on 31 July 2008. This facility provides maintenance, stores, logistics and on the job training to support the MU90 in service. Specific tools and machinery for manufacture and assembly of Australian components of Phase 3 production were set-to-work at Australian commercial facilities during the period.

The major risk to this phase is potential difficulty in transferring overseas supplier skills and technical knowledge for a complex weapon system into Australian defence industry. Management of this risk is necessary to provide in-country through-life support for the torpedo weapon system. This risk remains low, and has been mitigated through close management of the transition plan and provision of financial incentives for the contractor to meet its obligations under the contract.

Follow-on Stand-off Weapon - AIR 5418 Phase 1

Prime Contractor: A FMS case with the USAF, and a Direct Commercial Sales contract with Lockheed Martin Missiles and Fire Control.

Flight testing to authorise the Australian F/A-18 A/B aircraft to carry the Joint Air-to-Surface Standoff Missile (JASSM) continued throughout the year. The USN continued with integration testing of the JASSM into the F/A-18A/B Operational Flight Program, with a number of flight tests being conducted.

Deliveries of data and hardware items being acquired under the FMS case, and under the Lockheed Martin contract, continued during 2008-09. JASSM Storage facilities and modelling studies into the capability to strike moving maritime targets were completed during the 2008-09 period.

The project has three main risks. The first remains the timely development of the F/A-18 A/B Operational Flight Program by the USN. The second is the ability to successfully demonstrate end-to-end capability in Australia. The third is timely delivery of weapons as a result of current issues in the US concerning weapon reliability. These risks are rated high and are being mitigated through close engagement with the USN, USAF, US Department of Defense and key Defence stakeholders on scheduling and programming.

Explosive Ordnance Reserve Stocks - JP 2085 Phase 1B

Prime Contractor: Multiple purchase contracts with Australian and overseas munitions suppliers.

This project seeks to acquire a range of explosive ordnance items to increase reserve stock holdings. The project’s mandate is to procure quantities of a number of explosive ordnance items comprising anti-armour, medium/field artillery, mortar, and Navy projectile ammunition as well as demolition stores, pyrotechnics, and bombs to remediate depleted reserve stock levels.

A significant number of deliveries of explosive ordnance have been received from contracts placed in 2006-07 and 2007-08. The major focus in 2008-09 was the delivery of initial quantities of the 155mm Excalibur Precision Guided Munitions under the US FMS program and the commencement of associated introduction into service activities. Deliveries of 155mm Excalibur will continue to November 2010.

On 31 March 2009, the Government approved a real cost increase to Phase 1B for the acquisition and introduction into service of the Advanced Field Artillery Tactical Data System (AFATDS), which is an essential enabler of the Precision Guided Munitions capability. The AFATDS capability is being procured under US FMS arrangements and all deliveries are expected to be received in mid 2010. Another US FMS case was established for Navy 5” projectiles for delivery in 2009-10.

The major risk for this project continues to be related to the schedule associated with the delivery of system capable XM982 Excalibur projectiles which has experienced a 12 month delay. This is not expected to have any significant cost implications to the project budget. Ongoing consultation with the US Government and the Original Equipment Manufacturer is providing acceptable situational awareness of this schedule risk and DMO has taken steps to maintain ADF stakeholder communication and expectation management.

There remains an extant risk to the AFATDS schedule for the delivery of the required version of AFATDS. This schedule risk has been mitigated by the lease of US Army inventory AFATDS workstations for an initial period. These leased workstations have enabled training to commence and for early technical integration analysis to be conducted.

Helicopter Systems Division

Multi Role Helicopter (MRH-90) - AIR 9000 Phase 2

Prime Contractor: Australian Aerospace.

This project will acquire 46 Multi Role Helicopters (MRH-90) and support systems for the Army and Navy under project AIR 9000 Phases 2, 4 and 6. The support systems will include: an electronic warfare self protection support cell; a ground mission management system; a software support centre; an instrumented aircraft with telemetry; two full flight and mission simulators; and facilities infrastructure at Townsville, Oakey, Brisbane and Nowra. An initial 10-year sustainment contract commenced from the in-service date of 18 December 2007.

On 30 June 2006, a contract change proposal to the Additional Troop Lift project (12 MRH-90) was signed for procurement of an additional 34 MRH-90 to replace the Army Black Hawk and Navy Sea King helicopters, bringing the total to 46 aircraft. The support contract was signed on 31 October 2006. The first flight for the first Australian MRH-90 was conducted on 28 March 2007. The first four aircraft were manufactured in France, two aircraft will be assembled in Germany and delivered to Australia under an initiative by Australian Aerospace to recover scheduled delays in the Australian assembly line. The remaining 40 MRH-90 will be assembled at the Australian Aerospace Brisbane facility. The first Australian assembled MRH-90 was accepted on schedule in Brisbane on 17 December 2008, and as at 31 August 2009, seven aircraft have been accepted and are now in service with the Army 5th Aviation Regiment in Townsville.

Training for Army and Navy aircrew, maintenance and support personnel is being conducted in purpose-built training facilities in Townsville. The project is on schedule to achieve the in-service date with the Navy IOC of one aircraft at sea planned for mid-2010. The MRH-90 flying rate of effort has been less than planned, leading to some delay in training MRH-90 aircrew. As a consequence, the Army IOC of a troop of four aircraft is now expected to be achieved in late 2011, six months later than originally scheduled.

The MRH-90 aircraft is a complex but highly capable troop lift helicopter. The lessons from the acquisition of the Armed Reconnaissance Helicopter (ARH) and the lessons of introduction of the aircraft into the German Army and other European NATO Helicopter 90 users are being considered and, where appropriate, applied to the Australian project. The two major risks to the project are schedule delay (due to lower than expected flying rate of effort) and subsequent delays to indigenous training of MRH-90 aircrew. Significant effort by industry, Defence and the DMO project office to mature the MRH-90 logistics and support systems should result in the flying rate of effort improving throughout 2009-10 to meet project objectives.

Armed Reconnaissance Helicopter - AIR 87 Phase 2

Prime Contractor: Australian Aerospace.

This project will provide Defence with 22 ARHs, a training system including simulation devices for aircrew and maintenance personnel, a software support facility, and a ground mission management system. The Government signed a 15-year support contract that commenced when the first two helicopters were delivered on 15 December 2004.

As at 30 June 2009, 15 ARH aircraft, two of three aircrew training simulators, five of six ground training devices, the software support facility and the ground mission management system have been accepted by the Commonwealth of Australia. Two of the helicopters are being used for type acceptance activities, four for aircrew training, three for training operations at the 1st Aviation Regiment in Darwin and the remaining six aircraft are being upgraded to the next aircraft configuration. The 16th ARH was accepted on 9 July 2009.

The two EC-135 aircraft, provided by Australian Aerospace as part of the dispute settlement, flew over 1160 hours in support of aircrew currency and lead-in skills training. Australia has now trained 26 military ARH aircrew including nine instructors. Training of additional crew is continuing for the development of an ARH operational capability. The ARH fleet has now flown in excess of 4,300 hours, mainly in support of training and aircraft certification activities.

The Commonwealth of Australia and Australian Aerospace agreed the changes to the acquisition and through-life support contracts to implement the provisions of the Deed of Agreement in February 2009 and December 2008 respectively. The re-baselined schedule to deliver the first operational capability to Army was achieved in September 2009, 27 months later than originally contracted. All 22 ARH are now planned to be delivered by 30 September 2010 with final supplies acceptance due 30 June 2011.

Australian Aerospace finalised support agreements with its remaining subcontractors SAGEM, Nexter and EADS at the Paris Airshow on 16 June 2009. These subcontracts are essential to ensuring effective maintenance and supply support networks are in place to support ARH operations. There has been a gradual increase in the achieved rate of effort as Australian Aerospace establishes these maintenance and supply support networks with over 200 hours being flown in June 2009, the best monthly achievement to date.

The key risks to the program are linked to spares availability essential to support the aircraft retrofit program and to achieve the necessary aircraft rate of effort required to support test programs and the conduct of aircrew training. To mitigate against these risks, Australian Aerospace and Defence have implemented multiple strategies to manage the delivery of the remaining capabilities through monthly integrated program meetings to review schedule progress and to agree actions to recover schedule and prevent further slippage occurring. Improvement in the rate of effort achievements has been observed and is expected to continue as Australian Aerospace’s maintenance and supply support networks become more effective.

Land Systems Division

Upgrade of M113 Armoured Vehicles - LAND 106

Prime Contractor: BAE Systems Australia (BAE) (formerly Tenix Defence).

The project is modernising 431 M113A1 armoured vehicles, which provide mobility and fire support for Army’s mechanised forces to improve protection, firepower, mobility and habitability. This major upgrade replaces most of the existing vehicle, retaining only the hull, hatches, rear door and communications systems. Included is provision of appliqué armour, a new armoured turret and machine gun, a new engine, drive train and suspension, and the stretching of all variants.

Technical and performance issues during initial vehicle testing delayed development, and resolution placed pressure on the project schedule. Brake problems were resolved in 2007 and production commenced of personnel carriers, repair and recovery variants. In October 2008, the Government approved an extra 81 armoured personnel carriers to meet the Enhanced Land Force (ELF) requirement, increasing to 431 the total of upgraded M113s by the end of 2011.

Insufficient skilled tradespeople for the BAE production line in Bandiana put pressure on the production schedule. BAE at own expense developed its Williamstown, Victoria, and Adelaide facilities to boost production, and remains committed to the final delivery of vehicles as contracted.

Design development of the armoured logistic, command, ambulance and mortar variants is progressing well. A submission was developed during the year seeking to stretch the only unstretched variant, the armoured mortar. This submission was subsequently approved by Government in August 2009; meaning all M113 variants will now be stretched.

Crew and maintenance training is continuing as planned, and spares, special tools and test equipment to support introduction into service are being delivered to meet fleet sustainment requirements. Further purchases of support items are planned as more vehicles are progressively introduced into service.

BAE’s production schedule is dependant on full rate production being achieved and sustained at its three key sites. There is a risk that the Commonwealth of Australia’s production facilities at Bandiana or Government supplied materiel will cause further production delays and prevent recovery of the schedule. This risk is being mitigated by regular, combined and coordinated management of all production activities with BAE to expediently and comprehensively address all emerging issues.

Bushranger Protected Mobility Vehicle-LAND 116 Phase 3

Prime Contractor: Thales Australia.

This project is acquiring 737 vehicles in seven variants (troop, command, mortar, assault pioneer, direct fire weapon, ambulance and air defence). The vehicles provide protected land mobility to Army units and RAAF Airfield Defence Guards.

All 300 vehicles under the original contract have been delivered. Delivery of the 144 ELF vehicles was completed in April 2009.

Delivery of 293 vehicles to meet the Land 121 Overlander Phase 3 requirement began in April 2009 and will be completed by June 2012.

In June 2007, the Government approved the rapid acquisition of additional protected weapon stations, automatic fire suppression systems and purpose designed spall curtains to further enhance the protection level of Bushmasters deployed on operations and the pre-deployment training fleet.

All protected weapon stations have been delivered and fitted. All automatic fire suppression systems have been delivered. Delivery of the spall curtains commenced in December 2008 and was completed in August 2009.

Maritime Systems Division

Adelaide class Guided Missile Frigate Upgrade Implementation - SEA 1390 Phase 2.1

Prime Contractor: Thales Australia (formerly known as ADI Ltd).

This project is to upgrade four Adelaide class FFG frigates with upgraded and integrated combat systems, including sensors, missile launchers and associated platforms systems, add an onboard training system to the ships’ combat system and improve the reliability of the ships’ platform systems.

Upgrade activity was undertaken in all Adelaide class frigates and associated shore-based facilities. HMA Ships Sydney, Darwin, Melbourne were accepted from the contractor in November and December 2008, with HMAS Newcastle provisionally accepted in May 2009. All ships conducted trials, evaluation, and training activities.

The high risk to achieving contemporary capability effectiveness of the electronic support and torpedo defence systems is being mitigated by a remedial action program that will continue on through 2009-10.

Standard Missile Replacement (SM-1) - SEA 1390 Phase 4B

Prime Contractor: The DMO is the procurement coordinator, supported by the US Department of Defense under an FMS arrangement and commercial contracts. Original equipment manufacturers are engaged through commercial contracts to mitigate delivery risk of the SM-2 capability.

This project is to replace the SM-1 missile with a modern variant of the SM-2 and improve the air defence capability of the Guided Missile Frigate fleet, adding to the capability delivered by the FFG Upgrade Project.

The delivery of SM-2 missiles and spare missile sections progressed to schedule, as did software development, integration and testing. Equipment installations were progressed during planned ship maintenance periods in the lead up to completing the first installation in HMAS Melbourne in December 2009.

The medium risks of schedule slippage in system development and providing interoperable systems and logistics support are mitigated by rigorous schedule monitoring and participation with the US Government and industry in integrated product teams.

New Heavyweight Torpedo - SEA 1429 Phase 2

Prime Contractor: US Department of Defense under a MoU with work performed by Raytheon and the US Naval Undersea Warfare Center.

This project will acquire a replacement heavyweight torpedo for the Collins class submarine to replace the USN Mk 48 Mod 4 Heavy Weight Torpedo in service with the Royal Australian Navy (RAN). The project will also acquire the associated logistic support, weapon system interface equipment, operational support and test equipment, and will transition the weapon into service.

Submarine modifications were achieved to a schedule dependent on docking programs. Torpedoes were delivered to meet Navy requirements and support arrangements have achieved certification for exercise and warshot weapon servicing.

HMAS Waller and Farncomb were upgraded and achieved interim operational release with Waller conducting a successful proof-firing of the weapon.

The installation schedule is synchronised with the submarine docking program and any change in that program is a medium risk to the project delivery schedule.

Collins Class Submarine Reliability & Sustainability - SEA 1439 Phase 3

Prime Contractor: ASC Pty Ltd is the submarine builder and designer for through-life support activities, engaged under a through-life support agreement for up to 25 years, with work packages contracted annually.

The project scope is comprised of several sub-projects which separately address a number of submarine reliability and sustainability conditions. The documentation and delivery of each sub-project is subject firstly to the availability of funding and contractor resources, and then the timing of submarine maintenance periods.

Overall, this project competes for platform availability and specialist ASC capacity as a lower priority than two other submarine-related projects, SEA 1439 Phase 4A and SEA 1429 Phase 2. As a result, the planned level of work and budget for 2008-09 was not achieved in full. A number of sub-projects’ modifications were completed successfully and are meeting capability requirements.

Limited contractor specialist design and production capacity continues as a medium risk. Contracting work packages on an annual basis under the through-life support agreement is a medium risk to controlling costs within the capped project budget.

General Manager Programs

Air Warfare Destroyer - Build - SEA 4000 Phase 3

Prime Contractors:

This project will acquire three Hobart class AWDs and their support system for the ADF. These ships will form a critical element of the ADF’s joint area air warfare defence capability.

The preliminary design review was achieved as scheduled in December 2008. The plans for the critical design review are well established and progressing to schedule for the critical design review in December 2009.

The majority of combat and platform systems equipment selections are complete with most combat system equipment and critical platform systems equipment under contract.

Infrastructure work is progressing quickly at South Australia’s Common User Facility (Techport) and the ASC Shipyard. The wharf, runway, dry berth and ship transfer systems are scheduled for commissioning well in advance of the shipyard requirements.

The hull block subcontractors have been selected and the first contract awarded. Steel fabrication for the hull blocks is scheduled to commence in late 2009.

JP 2048 Phase 4A/B–Amphibious Deployment and Sustainment

Prime Contractor: BAE Systems Australia Defence (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 Systems Australia Defence 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. Preliminary design review as completed in May 2009 and the keel laying occurred on 23 September 2009.

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 reported an underspend in budget for 2008-09. This was due to the splitting of a payment milestone and end of financial year timing.

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

New Air Combat Capability

Detailed Analysis and Acquisition Planning - AIR 6000 Phase 1B

Prime Contractor: Subject to second pass approval, Australia will acquire the F-35 Joint Strike Fighter (JSF) via a MoU with the US Department of Defense. Lockheed Martin will deliver JSF via contracts with the US Department of Defense, on behalf of all JSF Partners.

This project is focused on JSF requirement definition and risk analysis activities to support New Air Combat Capability (NACC) Second Pass (acquisition) approval.

The White Paper confirmed that Defence intends to acquire around 100 JSF, along with supporting systems and weapons. Acquisition timing and delivery profile will be decided in late 2009 with the first phase of the procurement (AIR 6000 Phase 2A/B), comprising no fewer than 72 aircraft, to replace the RAAF’s F/A-18 A/B Hornet fleet.

The JSF Program continues to make good technical progress and has received ongoing strong support from the US Government. As a complex, software intensive, developmental program, many challenges remain. The key risks for Australia are cost immaturity and the prospect of technical issues and delays arising in the final development phase and the extensive ground and air test program. These risks are mitigated by NACC project provision allowing for cost growth in excess of 2008-09 US Government estimates and aiming to achieve IOC a number of years after the USAF. Additional schedule buffer is provided by the acquisition of 24 Super Hornet aircraft.

Defence is working with the US Government to ensure Australia’s access to the technology and data - including access to JSF operational test and evaluation - required for sovereign JSF operations.

During the transition from F/A-18 A/B to JSF, the NACC project is working with Air Force to shape the future JSF workforce (aircrew, ground crew and project staff) and has commenced detailed facilities design for RAAF Williamtown, Tindal and forward operating bases.

Engine noise is a critical environmental issue with the JSF’s introduction. To better understand the JSF’s noise characteristics, Defence funded additional noise testing in late 2008 to support on-going environmental assessment and stakeholder engagement.

With Defence support Australian industry won additional JSF work worth US$30m in 2008-09 with major opportunities opening up as the JSF Program heads into the production phase.

Human Resources and Corporate Services Division

Improvements to the Logistics Information Systems - JP 2077 Phase 2B.1
ADF Deployable Logistics Systems - JP 2077 Phase 2B.2

Prime Contractor: Mincom Ltd is the prime contractor for Phase 2B, and is the provider of the core software system to be known as the Military Integrated Logistics Information System (MILIS).

MILIS will provide the foundation for integrated supply, inventory management, maintenance and distribution throughout the Australian Defence Organisation.

Phase 2B.1 will replace the core of the Standard Defence Supply System. The application has completed Defence functional testing and meets Defence functional requirements. Integration and performance testing is underway. The project Go-Live date was originally planned to be 30 November 2009. However this date left a number of key risks outstanding. There was a risk of a loss of training proficiency by Defence users over the Christmas leave and posting cycle. There was the risk of errors in transition of data and subsequent replanning of the one and two year stocktake cycles while in the middle of the financial year. There were also risks associated with the mid-financial-year transfer of fixed asset information from the Defence Finance System ROMAN to MILIS. Cumulatively, these could negatively affect the status of the Defence financial accounts for 2009-10. As a result, Defence has recommended to Government that the most prudent course of action is to defer the Go-Live date to 1 July 2010.

Phase 2B.2 will deliver deployable logistics capabilities and in-transit visibility of items in the supply chain. A revised contracting approach for Phase 2B.2 builds on the lessons learned from Phase 2B.1 and mitigates the Phase 2B.2 risks through a solution definition phase which will be completed in 2010. Mincom has committed to deliver the full Phase 2B.2 capability through an integrated commercial off-the-shelf solution built on the JP2077 Phase 2B.1 solution.

Phase 2D will provide the delivery of an enhanced information systems capability for several materiel logistics support processes: engineering management, maintenance management, enterprise reporting, architecture integration, repairable items management, classified assets management, security management and automated tracking technology. Information obtained via a global request for proposal in early 2008 has been analysed and incorporated into future acquisition options which will be included in interim pass consideration by Government in 2010.