Top 20 sustainment products

Table 5.8 and the descriptions that follow provide details of the top 20 sustainment products by forecast expenditure in the Portfolio Additional Estimates Statements 2008-09. Expenditure for the top 20 products represented 59 per cent of total expenditure on capability sustainment in 2008-09.

Table 5.8 Top 20 sustainment products by expenditure as forecast in the Portfolio Budget Statements 2008-09 [1]
Budget
estimate
2008-09
$m
Revised
budget
2008-09
$m
Actual
expenditure
2008-09
$m
Variation


$m

Reason for variation in product expenditure 2008-09
Aerospace Systems Division
P-3C/AP-3C Orion Weapons System 135 137 131 -6 Autopilot replacement project was delayed.
F/A-18 Hornet Weapons System 133 130 114 -16 A new engine contract delivered sustainment savings.
C-130J-30 Weapons System 127 136 113 -23 Additional funds provided to supplement operations were not required.
F-111 Weapon System 120 120 117 -3 Funds were reprogrammed into 2010-11 to accommodate aircraft disposals.
Lead-In Fighter Hawk 127 Weapons System 88 88 89 1 Procurement of additional ground support equipment and foreign exchange losses contributed to overspend.    
C-17 Globemaster III 86 94 39 -55 Variation is dominated by A$43m fuel and explosive ordnance funds quarantined awaiting transfer. Reduced Rate of Effort and exchange rate gains also contributed.
C-130H Weapons System 68 61 75 14 Variation is due to additional costs in support of operations.
Electronic Systems Division
Wide Area Surveillance Capability 76 75 79 4 $4m of additional funding was expended to overcome unplanned obsolescence issues in addition to meeting the operational availability requirements of the MSA.
Battlespace Communications System 70 105 51 -54 $40m of Enhanced Land Force funding was identified as surplus in 2008-09 and made available to Defence for other procurements. $12m related to operational cost savings and non achievement of the procurement of some long lead items in the financial year.
Explosive Ordnance Division
Explosive Ordnance - Navy, Army, Air Force 373 453 360 -93 The underachievement was caused by some planned deliveries slipping into 2009-10 due to the current high international demand for many explosive ordnance types.
Helicopter Systems Division
Multi Role Helicopter MRH-90 87 95 51 -44 Variation in MRH-90 Sustainment 2008-09 expenditure was due to the hours achieved being less than planned which reduced the training, and overall rate of the project.
Black Hawk S70A-9 Weapons System 73 73 101 28 The increase in Black Hawk costs was driven mostly by purchase of some spares to reach the life of type for Black Hawk, which is being replaced by MRH-90. 
Land Systems Division
B Vehicles 117 126 127 1 Variation relates to increased requirements in Joint Logistics Command managed maintenance and remediation activities.
Commercial Vehicle Fleet 94 82 75 -7 Efficiency savings identified for hand back to Army early in the financial year.
ADF Clothing and Equipment 76 94 89 -5 The variation is attributed to delays in delivery lead times, delays in raw fabrics deliveries required to manufacture garments and protracted contract establishment timeframes.
Maritime Systems Division
Fuels and Lubricants - Navy, Army, Air Force 442 428 419 -9 Variation is due to the unexpected reduction in the world price of crude oil.
Collins class submarines 296 304 324 20 Variation is largely the result of extra effort to improve inventory availability.
Anzac class frigate 255 270 301 31 Variation is due to a change in the timing of recording completion of work (recognition of expense).
Adelaide class frigate 112 113 115 2 Variation is due to the provision of additional funding to the NSW Government for disposal of ex-HMAS Adelaide.
Mine Hunter Coastal 61 58 61 3 Variation is due to urgent repairs of equipment on two ships damaged during a severe storm.
Total Top 20 Sustainment Products 2,889 3,042 2,831 -211  

Note

  1. Under the customer supplier model between Defence and DMO, service delivery levels and requirements may change regularly to meet the emerging demands of Defence sustainment and operations requirements.  As such the price for product delivery will fluctuate to meet these variations in demand from Defence.  Under the MSA model, product prices will change as agreed with the customer requirements, resulting in amended budgets beyond the Additional Estimates reporting timeframe. This may result in cash being returned to the customer in-year or additional cash being provided to DMO to meet the revised agreements.