Local content a must

Katherine Ziesing | Canberra

Unless you’ve been living under a rock for the last 10 years, you’ll know that Land 400, Army’s biggest ever vehicle program, is well underway. Phase 2 of the program is currently undergoing a 49-week Risk Mitigation Activity (RMA – see P26 for more on the progress of the RMA), which is due to finish up in mid-August.

This phase for 225 vehicles sees the Rheinmetall Boxer up against the BAE Systems/Patria AMV-35. Phase 3 will see the field of competitors vie for a stake in a 467-strong vehicle fleet alongside the relevant training systems to be delivered under Phase 4.

As Brigadier Greg McGlone, Head of the Combined Arms Fighting System (CAFS) told ADM this month, reiterating past statements about the total cost of ownership and commonality, Phase 2 and 3 are being run separately.


 

“Not having a strong AIC plan will simply become bad business in an industry that doesn’t tolerate bad business for very long.”

 


“Now that we’ve got the Phase 2 under way and we know what we’re looking at, we will then start to develop what makes sense commonality-wise between Phase 2 and Phase 3,” BRIG McGlone said. “Is it turrets? Is it just the canon? Is it nothing at all? Are there options that we need to explore? So that’s what we’re going through.

“We’re certainly talking to some of the Phase 3 companies over the coming months, asking them questions of what was in their submissions so that we’ve got a really good understanding of the existing capabilities.”

Does this mean that whoever wins Phase 2 has the inside running for Phase 3? Not necessarily.

The timelines for the two phases will allow for crossover but not as much as some might think. First Pass for Phase 3 is scheduled for July 2018, with an RFT release scheduled a few months after first pass, somewhere in the third quarter. Industry understands that it will be a restricted tender to RFI respondents only. This RFI closed in February last year.

The Phase 3 RFI specifies 312 turreted direct-fire high-survivability IFVs (IFV-DFHSL), 26 command-and-control vehicles, 14 ambulances, 18 repair vehicles, 16 Joint Fires vehicles, 11 engineer reconnaissance vehicles, 14 recovery vehicles as well as 39 combat engineer variants.

In addition Phase 3 also calls for manoeuvre support vehicle (MSV) concepts. The MSV will enhance both mounted and dismounted operations primarily by providing direct fires in direct support of troops.

Land 400 Phase 3 is expected to deliver an initial operating capability in 2025 when the M113AS4 Armoured Personnel Carrier (APC) is retired from service. There is currently a debate is if MSV should remain in Ph 3 or move into other programs.

By the time Phase 3 reaches the RFT phase, government should have made a decision on Phase 2, if all goes to plan. And government has already played a more significant role in Land 400 than many other comparable programs; it is the headline major program in the wake of the Defence Industry Policy Statement, which acknowledged industry as a fundamental input to capability (FIC).

The two month delay to the program last year to host an industry road show was viewed by some as a cynical attempt to force the downselected contenders to make sure their Australian Industry Capability (AIC) was up to scratch. Up to scratch in this case was, the more SMEs you have on your books, the better. It did underpin the government’s push to include local content wherever feasible.

Government was also clear that they wanted meaningful levels of engagement in terms of technology. It wasn’t good enough for Australian industry to just supply the fire extinguishers or mounting brackets; there had to be complex engineering expertise IP transfer or utilisation.

Minister for Defence Industry Christopher Pyne has consistently been supportive in his efforts to highlight the benefits of the Australian defence industry, both for primes in their supply chains and their export potential.

I suspect that any major program due to pass critical milestones under the current government defence leadership team that does not demonstrate the same level of support will be in for a rude shock. Not having a strong AIC plan will simply become bad business in an industry that doesn’t tolerate bad business for very long.

This article first appeared in the March 2017 issue of ADM.

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