Brisbane based ADF munitions supplier NIOA has won part of the Major Munitions Contract (MMC) tender to supply more than 30 different munitions to the ADF over the next five years.
NIOA managing director Robert Nioa told ADM the award of the $95 million contract marked a big step for the company.
NIOA's industry partners on the tender were Rheinmetall and Vista Outdoor (a sports shooting and outdoor sports accessories company that was spun-off from ATK when it merged with Orbital Sciences to become Orbital ATK).
Under the terms of the contract, NIOA will be supplying 30 different types of munitions from 5.56mm through to 120mm tank ammunition.
"We'll also be supplying Rheinmetall 40mm ammunition and stun grenades; it's for an initial five year term with two five year options and we fully expect it to be a 15 year contract," Nioa explained.
The $95 million figure represented only initial orders and he fully expected that sum to grow over time.
"The big step change for us is that the contract will allow us to establish an ammunition certification and engineering team at our facility in Brisbane."
NIOA will now be able to do all of the technical engineering work for certification of ammunition prior to introduction into service. Similarly, all introduction into service testing will now be performed at the modern Brisbane facility which was established only in 2014.
"So the Commonwealth gets an engineering and test capability to support the ammunition procurement, they'll also have a very efficient standing offer agreement, plus they'll be able to reach back into the engineering and technical support offered by our OEMs which are all drawn into the same contract."
Nioa added that by pulling multiple types of ammunition from different countries and various vendors into the one contract, the Commonwealth will reap efficiencies. Prior to the award, NIOA had been supplying about 20 different types of ammunition but only on an ad hoc basis.
"There'd be a request here and a request there, and we could never invest in the engineering services support the customer needed because we didn't have that guarantee of sustained supply. The new arrangement now gives both the Commonwealth and ourselves the surety that we will have the right amount of people and skillsets available to fulfil the contract."
The Commonwealth had previously sourced 120mm tank ammunition for the M1A1 Abrams main battle tank via the US Foreign Military Sales procurement process.
"We will now link them directly to the manufacturer rather than to a supply of older US ammunition war stock – they'll get brand new ammunition with full warranty, packaged to Australian standards, so that will be a first for them I think."
Nioa said the first deliveries under the contract would be dispatched in May next year. He was encourgaged to see the Commonwealth was following through on First Principles Review rhetoric and engaging with industry via innovative contracting models.
"We've found them very open to doing things differently so it's an encouraging sign for industry."