Defence Magazine

Upon announcing ASC Shipbuilder Pty Ltd as the winner, media and industry interest refocussed on the confidentiality and thoroughness of the tender process itself.

Warren King is the man responsible for ensuring the Air Warfare Destroyer (AWD), project is delivered on time and on budget. As the program manager he was also responsible for ensuring a fair tender process was adhered to. He says the real reason they wouldn't discuss tender details at the press conference was a lot less exciting.

"We didn't want to go into detail, until we had time to debrief the loosing company. They are entitled to know how we assessed them," he says.

"We were considering some very complex issues. My view - which was put to both companies - was I would take forward the best offer they could make, compare those offers, and recommended the one which was best," he says.

While that sums up the process neatly, it's not surprising with such a complex project that in reality the three-phase tender assessment process, which took almost five months to complete, was much more involved.

During the first phase, three independent teams were established to assess the proposal's commercial, technical and financial content, ensuring each met Defence's critical criteria. The teams each had an evaluation guide and plan - produced by the AWD program team prior to receiving the proposals - ensuring each proposal was measured with the same yard stick. Of the three proposals received, only ASC and Tenix met the essential criteria and moved forward to the next stage.

The first phase clearly benchmarked each respondent's position, the next phase had the dual purpose of giving Defence a detailed understanding of the proposals, and clarifying Defence's requirements for the respondents. The evaluation teams were merged to look at specific areas of interest like facilities management, program management and industrial relations.

"Instead of sitting back in an ivory tower - looking at their responses, asking a few clarifying questions and then making a decision - we gave both the respondents much more opportunity to interact with us through meetings and site visits to understand what our issues were. The interaction was very helpful for all parties to really get to the heart of the issues," Mr King says.

"We did that equally with each respondent and we had the probity advisers oversee all phases. Obviously the questions were somewhat different because each company had a different proposal, but we made sure each company had the same access to us - that is the same people, and the same amount of time. It was a very positive process, meeting with their teams gave us a greater sense of confidence in the validity of our recommendation."

After a busy four months, a formal report was presented to the Source Selection Board which was independently chaired by David Mortimer, and consisted of the Chief of Navy, the Chief of Capability Development Group, the Chief Executive Officer DMO, the Chief Defence Scientist, the General Counsel of DMO, and Mr King as the AWD Program Manager. They met for eight hours and unanimously decided ASC should be put forward as the preferred supplier to Government.

"To put that decision in context - each member had access to over 300 pages of evaluation plans and guides, 7500 pages of proposal material, and nearly 300 pages of reports prior to the meeting. On the day they saw a series of presentations from the AWD project team, BMT and Carnegie Wylie on various aspects of the proposals. ASC was unanimously selected on technical, commercial and financial grounds," he says.

Mr King is adamant there is no way the decision could have been unfairly influenced, and given the measures put in place to ensure independence, you could forgive him for being unimpressed with the media speculation.

"We had an absolute commitment to probity and process. An internal auditor, KPMG, oversaw our internal processes while Sir Laurence Street who was appointed by the Secretary of Defence, provided oversight to the whole selection process," he says.

"Some of the media were very critical of how we managed our selection process, accusing us of secrecy. What would the media have preferred? Maybe we should have run a TV show called My Shipyard Rules, each week viewers from each state could vote on the shipyard to be put through. Would that have been the way to select it? Maybe we could have sold the TV rights for the worm? I think the people of Australia expected something a little more professional."

"This was a major, significant, assessment. It needed to be done objectively, analytically, and independently of pressures of mass media or anything else."

"On the day Cabinet made it's decision the newspaper articles ran about 50/50 on who was going to win. As far as I know, nobody outside those who should know, did know. I take that as a compliment to how we handled it," he says.

"All systems go" for AWD

Lieutenant General David Hurley.

It's all systems go for the AWD project with the Government granting first pass approval for the project, providing funding for the next phase - the innovative AWD Systems Centre.

The project, which began well before White Paper 2000, will provide three multi-mission capable AWDs, giving Australia flexible and adaptable capability to contribute to the air defence component of sea control. Lieutenant General Hurley, Chief Capability Development Group thinks part of this early success is due to the new structure and close-working relationship between his group and the Defence Materiel Organisation.

"We have formed, really, a combined team from DMO and CDG. I have my officers from the Navy Maritime Development Area working in the project team permanently and there has been virtually daily interaction between Dr Gumley, Warren King and myself. So it's really been a strong interaction between the two organisations to get to the point we are at now, and this will continue until second pass" he says.

Warren King, the program manager for AWD, agrees the new structure has played a big part in reaching this milestone, and is excited to be adding to the team during the next phase with the Industry partners.

"I need to acknowledge the work done by the Capability Development Group in getting to this stage. People like Ralph Neumann, have done an enormous amount of work to prepare the material to take to Government," he says.

"We now have some initial money, and the exciting part starts. We will shortly make a recommendation for the platform system designer. Once we've got them, we'll have our core team, the USN who is supplying AEGIS from Lockheed Martin, we'll have our combat system engineering company - Raytheon Australia, the Shipbuilder - ASC and the platform system designer."

"We will then merge them to form an engineering centre. I like to call this new approach the Systems Centre. We'll have Capability people, we'll have the engineering people, our companies that are working with us - all working in the facility together to do the final design and final costing of this ship. They are our Solution Team."

"By mid 2007 we'll be in front of Government, with my industry partners metaphorically standing beside me, saying we commit that we can build this ship for the budget and on schedule".

Defence

Feature

Reaching the right decision

The recent media speculation over the Air Warfare Destroyer ship builder contract was intense. Ultimately it came down to two companies from two States pitted against each other in a strongly contested battle to win part of the $6 billion AWD contract.

"All systems go" for AWD