Defence: Air 87 Project

Senator Chris Evans asked the Minister for Defence, upon notice, on 24 April 2002:

With reference to the Air 87 project:

1. Can a detailed chronology on the tender process be provided, showing the dates at which each stage started and was then completed, from the release of the tender through to the signing of the contract.
2. Does this contract have any damages or penalty clause in relation to delays on the delivery of the helicopter; if so, what damages or penalties could be pursued.
3. (a) In terms of the tender process was the delivery date for the helicopter one of the critical requirements for the project; and (b) what delivery dates were specified in the tender documents.
4. What delivery dates are specified in the contract.
5. Can the Minister confirm that the installation of the Hellfire missile onto the Aussie Tiger will require modifications.
6. Are these modifications expected to lead to any delays in the delivery date of the helicopter; if so, what is the revised delivery date for the Aussie Tiger.
7. What modifications will be required to allow the Hellfire missile to be used on the Aussie Tiger.
8. Have those modifications been designed, tested and approved; if not, what is the timetable for the completion of these modifications.
9. In terms of the Aussie Tiger bid, what Australian involvement in the project was specified.
10. (a) Has the contract for the service of the Aussie Tiger been signed; (b) who won that contract; and (c) does the contract specifically require that it is dependent on the availability of the aircraft, unlike the service contract for the Seasprite helicopter.

Senator Hill - The answer to the honourable senator's question is as follows:

1. The tender process dates were as follows:

   a.	request for tenders released	18 Dec 2000
   b.	request for tender closed	30 Apr 2001
   c.	commence tender evaluation (four tenders)	1 May 2001
   d.	one tender screened out	22 Jun 2001
   e.	second tender excluded	8 Aug 2001
   f.	third tender ‘set-aside'	8 Aug 2001
   g.	commenced detailed evaluation and contract development with Eurocopter International Pacific (EIP)	8 Aug 2001
   h.	commence formal negotiations	10 Dec 2001
   i.	Sign Acquisition and Through Life Support Contracts	21 Dec 2001

2. The Armed Reconnaissance Helicopter (ARH) Acquisition contract has damages clauses in relation to delays on the delivery of the helicopter in the form of liquidated damages for failure to achieve a milestone. The liquidated damages allow the Commonwealth to claim compensation for costs it incurs for the failure of the contractor to meet delivery milestones.
3. 1. Yes.
   2. The request for tenders specified that the contractor shall deliver not less than two on-line ARH with sufficient supplies and support systems to enable one squadron to commence collective training not later than 15 December 2004 (the Initial Collective Training Capability In-Service Date (ISD)).
4. The following major delivery dates are specified in the ARH Acquisition Contract. Unless otherwise stated, the dates are the final delivery dates with delivery undertaken progressively to support ARH operational introduction and training.
   
   

   Item	Final Delivery Date
   Aircraft 1 and 2	15 Dec 2004
   Staggered delivery Aircraft 3 to 22	21 Jan 2005 to 21 Apr 2008
   Training Equipment	22 Nov 2005
   Ground Mission Equipment	1 Feb 2005
   Ground Flight test Equipment	20 Aug 2006
   Ground EWSP Equipment	15 Dec 2005
   ARH Software Support Capability	30 Nov 2004
   Program Management	27 Jun 2008
   Systems Engineering	27 Jun 2008
   ILS Support	10 Apr 2008
   Logistic Support Analysis	14 Nov 2003
   Maintenance Support	1 Aug 2003
   Support and Test Equipment	21 Feb 2007
   Spares (Repairable Items only)	15 Feb 2007
   Packaging, Handling, Storage and transportation	4 Jun 2004
   Technical Data	4 Jun 2004
   Facilities	7 Jun 2002
   Training System management	28 Sep 2007
   Courseware	Nov 2004

5. Yes.
6. No.
7. To implement the Hellfire missile, hardware modifications are required to the roof mounted sight (RMS) as well as software changes to the mission equipment package (MEP) program.
8. Preliminary design assessment and feasibility studies have been conducted. Timetable for the various modifications is as follows:
   1. RMS modification - start 1 July 2002, end 23 August 2002;
   2. RMS Ground and Flight testing - start 25 February 2003, end (with Aircraft Qualification) 23 October 2004; and
   3. MEP software modifications are to be developed from April 2002 and completed laboratory testing 30 September 2003 to commence aircraft ground and flight testing in February 2004.
   4. The acceptance test and evaluation firing of Hellfire from ARH Tiger is scheduled for July 2005.
9. Australian industry involvement (AII) local content is in the order of A$440 million with an associated Strategic Industry Development Activity program of about A$200 million. A major part of the local content is the opening of an Australian assembly facility in Brisbane for the Eurocopter EC 120 light commercial helicopter.
   
   AII is to ensure Australian industry has the ability to provide through-life support to the ARH Tiger. A tenet of the AII program is that Australian industry should produce components for the worldwide Tiger and not just for local consumption. EIP is negotiating with a number of Australian companies to effect this outcome with the first subcontract signed on 16 April 2002 with Australian Defence Industries (ADI) for the production of electrical looms.
   
   AII focus is to ensure Australian industry has the ability to provide through-life support to the ARH Tiger. A tenet of the AII program is that Australian industry should produce components for the worldwide Tiger fleet and not just for local consumption. EIP is negotiating with a number of Australian companies to effect this outcome with the first subcontract signed on 16 April 2002 with ADI for the production of electrical looms.
10. 1. Yes.
    2. Eurocopter International Pacific Limited.
    3. Yes, the acquisition and through life support contracts are linked.

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