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Annual Report 2014–15

Volume 1, Part 2 : Performance

Programme 1.1
Management of Capability Acquisition

Through Programme 1.1, the DMO acquires and delivers to Defence, in a transparent and accountable manner, specialist military equipment to enable the delivery of military capability to the Government. Equipment is purchased by DMO acquisition projects in accordance with materiel acquisition agreements between Defence and the DMO. The agreements define what is to be delivered, how much it is to cost and when it is to be delivered.
At 30 June 2015, the DMO was managing 206 active major and minor projects worth $96.3 billion in total.

Programme 1.1 accounted for around 48 per cent of the DMO’s expenses in 2014–15. This generates around $4.8 billion of military assets for Defence; non-capitalised project expenses were about $0.6 billion.

Table 6.3: Programme 1.1 deliverables for top 30 major projects

Deliverable

Performance summary

General Manager Joint, Systems and Air

Aerospace Systems

Growler Airborne Electronic Attack Capability—
AIR 5349 Phase 3

This project will deliver an airborne electronic attack capability based on the E/A-18G Growler aircraft, including the ALQ-99 Tactical Jamming System, anti-radiation captive training missiles, additional air-to-air missiles, simulators and other training devices. Aircrew and maintenance training will also be delivered.

Production on all 12 aircraft has begun, with the first two scheduled for completion at Boeing in the third quarter of 2015. Aircrew training in the United States is also well underway, as is key software development and test activity. The ALQ-99 and training missile production continued throughout the financial year.

Maritime Patrol and Response Aircraft System—AIR 7000 Phase 2

This project provides a maritime patrol and response aircraft and associated supported systems and services to replace, in part, the AP-3C fleet.

The project, through a cooperative programme with the United States Navy, contracted procurement of the aircrew training systems, two deployable mission support systems and long-lead-time components for the first four aircraft produced. The project continued to mature support arrangements with the US Navy, including ordering initial aircraft spares and support and test equipment. Initial aircrew training has commenced in the United States.

Battlefield Airlift—Caribou Replacement—AIR 8000 Phase 2

This project is acquiring 10 C-27J Spartan joint cargo aircraft to replace the retired Caribou.

The first three aircraft, spares and support equipment were delivered to Waco, Texas, United States, to enable training. The US-based training of Air Force personnel also began at the end of 2014.

The first aircraft delivery to 35 Squadron at RAAF Richmond, New South Wales, is due to be achieved in July 2015.

Air to Air Refuelling Capability—AIR 5402

This project will deliver five Airbus A330 multi-role tanker transport aircraft, known as the KC-30A in Air Force service, and the associated through-life support infrastructure for the fleet.

The project has completed the aerial refuelling boom system flight test programme and has delivered three fully capable KC-30A aircraft to the Air Force. The remaining two KC-30A aircraft will undergo modification and be delivered in final configuration during 2015–16.

This project has been removed from the projects of concern list.

Airborne Early Warning and Control System—AIR 5077 Phase 31

This project provides Defence with an airborne early warning and control capability, including six E-7A Wedgetail aircraft and associated ground and support systems.

All remaining elements of the E-7A aircraft and support systems were delivered, including the final remediation software for the radar; mission computing and communication subsystems; and selected changes to the electronic support measures subsystem. Full operational capability was declared in May 2015. This project was a project of concern.

C-17 Globemaster III
—AIR 8000 Phase 3

This project provides a global heavy airlift capability, based around the Boeing C-17A Globemaster III aircraft.

The project progressed the delivery and transition of remaining C-17A sustainment support requirements, including the C-17A cargo compartment trainer and remaining C-17A spares, role expansion equipment, ground support equipment and materiel handling equipment. Residual project tasks have transitioned, as planned, to in-service management.

Lead-in Fighter Capability Assurance Programme—AIR 5438 Phase 1A

The project will deliver an upgraded lead-in fighter training system, which includes an upgrade to the fleet of 33 Hawk 127 aircraft, procurement of new full mission simulators, and procurement of additional air combat manoeuvring instrumentation pods.

The project began flight testing of the trial aircraft and support systems and is finalising requirements for service release of the capability in 2017, including commencement of the modification programme for the remainder of the Hawk fleet.

Software issues and delays to initial flight testing have resulted in delays to the programme; however, initial operating capability dates are still on schedule to be achieved.

Procurement of simulators and air combat manoeuvring instrumentation pods continued, with the construction of simulator facilities now underway.

Electronic Systems

Battlefield Command Systems—LAND 75 Phase 4

This project, in close cooperation with JP 2072 Phase 3 Battlespace Communications Systems, will continue to digitise and enhance the command, control and communications systems for land tactical forces. The project will seek to complete the provisioning of the initial digitised brigade, begun under LAND 75 Phase 3.4 Battle Management System, and introduce equipment into a second brigade.

This project began provisioning of vehicle installations based on installation designs delivered under LAND 75 Phase 3.4, and implemented first to second pass risk reduction activities that will generate the information required for a future project approval consideration by government.

This project is well advanced in the completion of the design for the M113 (armoured personnel carriers) and protected mobility vehicle—air defence variant, with the manufacture of kits and installation of systems into selected protected mobility vehicles begun.

Battlespace Communications Systems (LAND)—JP 2072 Phase 3

The first work package of this project continued to support the digitisation of the command, control and communications systems for land tactical forces. The project delivered all the tactical data and voice radio equipment required for vehicle installations by project LAND 75 Phase 4 Battlefield Command Systems, with the final deliveries of minor ancillaries due in 2015–16.

The second work package involved a request for tender to provide the digital backbone for the Army land communications tactical environment. Tender responses will be evaluated in 2015–16.

Battlespace Communications Systems (LAND)—JP 2072 Phase 2A

This project has delivered new digital radios to the Army units for use in the dismounted role, with some specialist ancillaries yet to be supplied. Withdrawal of legacy analogue radio fleets will occur as the new equipment is introduced into service.

A performance-based support contract for the Harris family of products has been established and evaluation of tenders for support of the tactical data radio systems has begun. These contracts will provide life-of-type support of the new radios acquired by JP 2072 phases 1, 2A and 3 (Work Package-A) and additional procurements by other major projects during 2014–15.

Anzac Electronic Support System Improvements—SEA 1448 Phase 4A

This project will provide the Anzac class frigates with an improved tactical electronic support mission system for improved passive situational awareness and early threat warning. The project includes the provision of a mission system and emulators for training and a ground-based support segment for mission system programming.

The project has completed the required system reviews, including a preliminary design review and critical design review; and has begun system-level testing.

The project completed factory acceptance testing of three systems, installed one system in the shore support facilities, installed one system on an Anzac class frigate and progressed installation on another three Anzac class frigates.

Battle Management System—LAND 75 Phase 3.4

This project delivered battle management systems, including command post systems to the ADF, in cooperation with LAND 125 Phase 3A (Dismounted Systems) and JP 2072 Phase 1 (Combat Radio System). Final materiel release and final operational capability were achieved in early 2015. All designs were finalised and all physical vehicle installations and training were delivered to the Army.

Joint Command Support Environment—JP 2030 Phase 8

This project delivered information computer technology capability solutions and improvements to the following capability need groupings: situational awareness; joint operations planning and management; preparedness and special operations combat net radio interface. Operational test and evaluation has begun in support of a planned declaration of final operational capability in late 2015.

The key risk for this project is maintaining the schedule of activities required to support a declaration of final operational capability in late 2015.

C-130J Large Aircraft Infra Red Countermeasures (LAIRCM)—AIR 5416 Phase 4B2

This project will provide the Air Force C-130J with the large aircraft infra-red countermeasures system, enhancing the electronic warfare self-protection capabilities of the fleet. The design for the system’s incorporation, the system hardware, and the modification of the first four aircraft in the United States, are all being provided through a foreign military sales arrangement. The remaining eight aircraft will be modified in Australia.

Project systems engineering reviews began, ahead of the first aircraft induction planned for late 2015. The risk to the aircraft modification schedule is reducing as the design is confirmed and quality issues with the aircraft modification kits are resolved. The project anticipates the first four aircraft will be modified ahead of schedule and under budget, with achievement of initial operational capability still scheduled for the second quarter of 2017.

Replenish Nulka Warstock—
SEA 1397 Phase 5A

This project acquires Nulka rounds to replenish the Navy Nulka off-board anti-ship missile decoy inventory (warstock).

The project took final delivery of rounds ordered under Batch 3 and initial delivery of rounds ordered under Batch 4.

High Frequency Modernisation—
JP 2043 Phase 3A1

This project delivered a high-frequency communications system for Defence long-range communications. The fixed network component comprises four high-frequency stations, together with primary and backup network management facilities in Canberra. The fixed network capability has been provided in two major stages, core and final. The core system replaced the Navy and the Air Force high-frequency systems from November 2004, with the final system taking over support to ADF operations in October 2009.

In 2014–15, this project executed the contract for procurement of the direction-finding and signal enhancement (Nullarbor) capability. In addition, a programme of remediation for identified obsolescence issues, including replacement of the 10 kilowatt transmitters, was initiated.

During 2015–16, procurement of the Nullarbor capability will continue as programmed, along with work to address obsolescence issues resulting from delays to delivery of the final system. The Nullarbor capability will enhance communications and signal reception in a noisy high-frequency environment.

Helicopters, Tactical Unmanned Weapon Systems and Guided Weapons

Future Naval Aviation Combat System Helicopter—AIR 9000 Phase 8

The 24 MH-60R ‘Romeo’ Seahawk helicopters to be acquired by the project will replace the current fleet of 16 S-70B-2 Seahawk ‘Classic’ helicopters.

The acquisition of the Romeos will enable the Navy to provide eight helicopters concurrently embarked in Anzac class frigates and the new Hobart class destroyers. The remainder will be based at HMAS Albatross, New South Wales, conducting training and maintenance.

The Navy’s 725 Squadron completed its initial training and consolidation on the Romeo in the United States, returning to Australia in December 2014. Twelve Romeos have now been delivered, one of which will remain with the US Navy Test Squadron at Patuxent River, Maryland, United States, for prototype installation and testing of approved upgrades.

The HMAS Albatross facilities are complete, with the training facility accepted in October 2014 and the Squadron facility accepted in December 2014. The training system has been established, with courseware, maintenance training devices and the first of two tactical operational flight simulators commissioned. Australia-based Romeo training at HMAS Albatross has begun.

The Romeo has been awarded its Australian Military Type Certificate and service release. Two Anzac class frigates have been modified to accept the Romeos, one helicopter flight has embarked and the first ship trial has been completed.

The project remains ahead of schedule and under budget.

Multi Role Helicopter—AIR 9000 Phase 2

The project is acquiring a total of 47 multi-role helicopters (MRH-90) for the Army and the Navy. Phase 2 acquires 12 Army MRH-90 for an additional air mobile squadron; Phase 4 replaces Army’s Black Hawks; and Phase 6 replaces the Navy Sea Kings.

The project accepted a further four aircraft in the mature configuration, inducted the final four early configuration aircraft for upgrade to the latest production standard and accepted the second full-flight and mission simulator into operational service. Initial operational capability milestones for the Army and the Navy were declared and the project continued to support the activities required to achieve the remaining operational milestones in the lead-up to final operational capability.

Medium Lift Helicopter (Additional Chinook Helicopter Project)—AIR 9000 Phase 5C

The project is acquiring seven CH-47F Chinook helicopters to replace the current Army fleet of six CH-47D Chinook helicopters. The CH-47F Chinook will enable the Army to continue to provide medium-lift battlefield support. The new helicopters will be fitted with a rotor brake to allow embarked operations from the new Canberra class landing helicopter dock ships. The helicopters will be based at the 5th Aviation Regiment, RAAF Townsville, Queensland.

The project delivered the first four aircraft and the second of two transportable flight proficiency simulators. A Special Flight Permit was issued in March 2015 and initial materiel release was achieved in June 2015. Other key activities undertaken included working-up to Australian Military Type certification, aircrew and maintainer training, and transition to service activities.

The project continues to deliver to schedule and under budget.

Bridging Air Combat Capability—AIR 5349 Phase 2

This project is delivering air-to-air and air-to-ground guided weapons and countermeasures integrated with the F/A-18F Super Hornet.

The project finalised the delivery of AGM-154 Joint Stand-Off Weapons, further progressed the procurement of new air-to-air missiles, and worked with the United States Air Force and the United States Navy to achieve integration.

Joint Strike Fighter

Joint Strike Fighter Aircraft—AIR 6000 Phase 2A/2B

This project is approved to acquire 72 Joint Strike Fighter aircraft and supporting elements to form three operational squadrons and one training squadron. This comprises 14 aircraft approved in 2009 and 58 approved in April 2014. Contracting began for Australia’s next eight Joint Strike Fighter aircraft, due for delivery in 2018.

The Joint Strike Fighter Programme continues to make steady progress. In December 2014, the programme delivered its first two aircraft to the International Pilot Training Center at Luke Air Force Base, Phoenix, Arizona, United States. In April 2015, Australia’s first pilot was qualified on the F-35, after completing Joint Strike Fighter flying training at Eglin Air Force Base, Florida, United States. Australia’s second pilot has begun training at Luke Air Force Base.

The project’s facility programme gained government approval on 29 October 2014. Work has now begun on the F-35 RAAF Williamtown, New South Wales, facilities.

On 18 December 2014, the United States Government announced that Australia would provide airframe and engine maintenance, repair, overhaul and upgrade capability to F-35 aircraft in the Asia–Pacific region.

Defence completed its community consultations supporting the Environmental Impact Statement for F-35A flying operations. The final report was submitted to the Department of the Environment for consideration and ministerial approval in March 2015. An approval decision is expected to be published in July 2015.

General Manager Land and Maritime

Air Warfare Destroyer

Air Warfare Destroyer Build—SEA 4000 Phase 3

The project is being delivered under an alliance-based contracting arrangement between the Commonwealth (Defence), ASC AWD Shipbuilder Pty Ltd and Raytheon Australia. The project will deliver three Hobart class destroyers and their support systems to the Navy.

Key activities for 2014–15 included the launch of Ship 01, HMAS Hobart, following the installation of the SPY1D(V) and horizon search radars, Mark 45 gun and vertical launch system modules. The final blocks for Ship 02, HMAS Brisbane, were delivered to Adelaide from Newcastle, New South Wales and Williamstown, Victoria. Consolidation progressed from five blocks in July 2014, to 22 of the 31 blocks in June 2015. For Ship 03, HMAS Sydney, construction began on the last of the blocks in preparation for keel-laying. Crew training for the combat system and platform system continued.

The implementation of the interim phase of the AWD reform strategy began in December 2014 with the announcement of the insertion of additional shipbuilding expertise into ASC to improve productivity and begin remediation of the shipbuilder’s cost and schedule overruns. A limited tender process began in May 2015 to seek a long-term solution for AWD shipbuilding as part of the reform strategy.

This project is still being managed as a project of concern.

Land Systems

Field Vehicles and Trailers—Overlander Programme—LAND 121 Phase 3A/5A

The project is delivering approximately 2,150 unprotected lightweight and light Mercedes-Benz G-Wagon vehicles, 540 specialist modules and 1,800 Haulmark trailers, to provide tactical mobility for ADF training and the flexibility to undertake a wide range of tasks in difficult off-road conditions.

The issue of production vehicles, modules and trailers to units continued as well as the refinement of through-life support, including maintenance training. At the end of June 2015, more than 1,500 vehicles and 1,220 trailers had been delivered into service Australia-wide.

Overlander—Medium/Heavy Capability, Field Vehicles, Modules and Trailers—LAND 121 Phase 3B

This project will deliver approximately 2,707 medium and heavy vehicles in a number of variants, including recovery trucks, integrated load handling systems and flatbeds, in both protected and unprotected configurations. To complement the acquisition, 3,858 modules and flatracks will be supplied and 1,704 trailers will be acquired to increase payload-carrying capacity.

The prime contractors are currently in the design and verification phase for trucks, modules and trailers, and prototype testing has begun. Introduction into service is on schedule to begin in the second half of 2016.

Bushmaster Protected Mobility Vehicles—LAND 116 Phase 3

This project will deliver 1,052 vehicles, across its five production periods, in seven variants. The vehicles provide protected land mobility to Army combat units and Air Force airfield defence guards. The delivery of Production Period 5 vehicles began in July 2013 and will conclude in 2016.

The project delivered a further 66 of the 214 Production Period 5 vehicles.

The fitment of external composite armour mounting points to previously manufactured vehicles has begun.

Maritime Systems

Amphibious Deployment and Sustainment—JP 2048 Phase 4A

This project is scheduled to deliver two Canberra class landing helicopter dock (LHD) vessels and associated LHD support systems comprising configuration information training, spares, documentation and test equipment.

The project delivered the first LHD, HMAS Canberra, to the Navy, and progressed the production and testing of the second and final LHD, NUSHIP Adelaide, in preparation for delivery in the last quarter of 2015. The LHD support system has been established, with the creation of the LHD Systems Programme Office, a capability support coordinator contract signed with KBR and a transitional in-service support contract signed with BAE Systems.

Delays experienced in the set to work of key systems onboard NUSHIP Adelaide have resulted in rescheduling of harbour and sea acceptance testing. Progress has been made in mitigating the risk to delivery, which is within eight weeks of the original forecast.

Anzac Ship Anti-Ship Missile Defence—SEA 1448 Phase 2B1

This project will deliver a phased array radar system to the Anzac class frigates for target indication/tracking, mid-course guidance and target illumination for the Evolved Sea Sparrow Missile, and a new dual navigation radar system to replace the existing navigation radar suite.

The project delivered the required systems upgrade in HMAS Anzac. HMAS Warramunga is currently undergoing harbour acceptance trials, and the upgrade in HMA Ships Ballarat and Parramatta is progressing well.

Amphibious Watercraft Replacement—JP 2048 Phase 3

This project will deliver 12 new watercraft to operate with the two Canberra class LHD ships. The watercraft will provide an organic ship-to-shore connection in support of Defence’s amphibious capability, operating with the LHD ships to enable transport of personnel and equipment between the LHD ships and the shore, including where there are no fixed port or prepared landing facilities.

The first four landing craft were delivered to the Navy, and are now embarked on HMAS Canberra. The second group of four craft were accepted from the prime contractor, Navantia, in February 2015, one month ahead of schedule. Delivery of the second group of landing craft to the Navy is planned for July 2015.

The landing craft support systems have been established with the creation of the LHD Systems Programme Office, a capability support coordinator contract signed with KBR and a transitional in-service support contract signed with UGL Limited.

Anzac Ship Anti-Ship Missile Defence—SEA 1448 Phase 2A

This project will upgrade the combat management system and introduce an infrared search and track system to the Anzac class frigates.

The project delivered the required systems upgrade in HMAS Anzac. HMAS Warramunga is currently undergoing harbour acceptance trials, and the upgrade in HMA Ships Ballarat and Parramatta is progressing well.

General Manager Submarines

Future Submarines

Future Submarine—Acquisition—SEA 1000 Phase 1A

This project will deliver Australia’s future submarine capability.

During 2014–15, the Government announced the acquisition strategy for the Future Submarine Programme, which involves a competitive evaluation process to select an international partner to work with Australia to develop and deliver the future submarine. DCNS of France, TKMS GmbH of Germany, and the Government of Japan have been engaged under the process as potential international partners. Recognising that a new design will be required to meet Australia’s future submarine requirements, the competitive evaluation process will ensure that capability, cost, schedule, and key strategic considerations, along with Australian industry involvement, are carefully and methodically considered, avoiding unnecessary delays. The project is staffed to conduct the competitive evaluation process, with new roles and functions required once the international partner has been selected.

The key risk for this project remains the mobilisation of resources across government, industry and academia necessary to manage the Future Submarine Programme with appropriate international support, informed by experience and knowledge of similar programmes.

Programme 1.1 key performance indicators

The key performance indicators for Programme 1.1 are to deliver major and minor capital equipment within the agreed parameters for schedule, scope and budget. The detail varies with each project and is specified in the materiel acquisition agreement for the project.

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