Small to medium enterprises (SMEs) with an ambition to join the Sea 1000 Collins submarine replacement project are in a waiting game that may yet have years to run.
Sea 1000 seeks to acquire 12 new submarines to replace the Royal Australian Navy’s six Collins Class submarines, making it Australia’s largest ever defence project. Construction is scheduled to begin around 2016.
With options one and two (purchase of an existing, or existing but modified design respectively) have been sidelined, the eventual decision to either “evolve” a Collins related design under the Government’s stated Option Three, or go with a new design (Option Four) will shake out a likely procurement structure and timeline.
When ADM spoke with current and potential submarine supply chain companies, some expressed the view that buying an evolved Collins is the only solution that will meet time and risk requirements. And that option is of course being explored, through a contracted study.
“Defence has contracted TKMS AB (previously Kockums – the original submarine designer) to examine whether the current Collins Class Submarine can be ‘evolved’ to overcome initial design deficiencies, accommodate updated systems, and comply with contemporary regulatory standards,” a Defence spokesperson told ADM.
“TKMS AB has already subcontracted a significant proportion of this work to ASC Pty Ltd, to be completed in Australia. Work began in mid-January 2014 and is scheduled for completion by the end of August 2014.”
But in the same statement Defence also pointed out that Option Four, a new design, is still firmly on the table, illustrated by recent creation of a submarine Integrated Project Team in Adelaide, to devise a detailed brief on a new design to present to Government. At press time this team had around 50 members, drawn from Defence industry and Commonwealth APS engineering staff, and is expected to grow to around 150 personnel, predominantly industry, by the end of the first quarter of 2015.
ADM understands the IPT team is led by two experienced ex-UK submarine industry experts, and includes a number of other experienced members who have done similar work with Australia’s closest allies. Work on the project is likely to become more visible in the next two to three months.
Positioning
In the extremely risk averse world of submarines, suppliers already embedded and performing well on Collins have an obvious strategic advantage for success on Sea 1000, as pointed out by Adelaide-based Defence Teaming Centre CEO Chris Burns.
“They understand the environment,” he said. “They’ve built the relationships up with the primes. They’ve got their standards up, they’ve got their confidence and they’re prequalified, so they are going to be in the box seat for the future.”
In such a specialised field, domain experience is valuable partly because it is so hard to come by, regardless of whether the product is weapons, communications or food preparation.
“Look at Hill Defence,” Burns said. “They’ve done galleys for Collins submarine and galleys for Anzac frigates. So they understand the way navy cooks like the galley laid out. They know the right thickness of stainless steel to survive Australian warm waters.”
For those outside the fold, the options at this early stage are limited to putting their house in order to meet the terms of any future procurement process evaluation, and finding someone to listen to what the organisation is offering. And that, initially, means trying to make it on to the radar of the potential prime contractors. Burns again.
“What they’ve got to do is partner up with the primes. So they’ve got to be talking to the ASCs and Babcocks of this world. And looking at getting in to the land based propulsion facility. That’s where they want to be.”
In an SME, decisions on where and how to invest time and money are crucial, when an extended overseas briefing trip can eat a sizeable percentage of the annual marketing budget. But the potential rewards are attractive.
“Look at Sage Automation,” Burns said. “When the Air Warfare Destroyer (AWD) design was being decided, they took a big risk and they reckoned Spain was where it was going to go. So they got themselves on a plane and did a number of trips to Spain and built up a relationship with Navantia. Such that not only did they get the contracts for the Australian Air Warfare Destroyers, but they’ve now got an MOU with Navantia in Spain and they’re in their supply chain. But that was a big risk for a small company that might have gone wrong.”
Other Australian firms have shown similar resourcefulness, with equally impressive results. Adelaide-based composites manufacturer Airspeed gained a position on Collins by applying proven aerospace technology to what, for the company, was a new maritime field. Already the Original Equipment Manufacturer (OEM) for a range of electronics pods and cargo pods for military aircraft, Airspeed joined the ranks of Collins suppliers in 2008 through an order for specialised composite stowage vessels.
Capitalising on this initial opportunity, Director Steve Barlow then expanded Airspeed’s submarine composites capability to include lightweight replacement structures, later supplying a composite fin top casing for Collins that weighed less than 40 per cent of the steel casing it replaced.
With growing understanding of the undersea environment, Airspeed has also begun its own development programs, designing an entire composite submarine fin (conning tower in the old language), which offers the ability to house a greater number of masts and systems, while saving around eight tonnes in weight.
Barlow’s view is that the highly risk averse world of submarine design, be it an evolved Collins or new design, will automatically favour those who already have work in the water and credibility in the bank.
“We used our skills and what we’d learnt in aerospace and we carefully, and in a risk averse way, and through an ‘apprenticeship’, applied that successfully to submarine structures,” he said. Now, he says, the best strategy is to just perform, effectively and reliably on current contracts.
“Our strategy for Sea 1000 is to have successful uptake of composites on Collins related projects so there is an appetite for that in Sea 1000 and the benefits that composites can bring.”
Valley of Death
And for many SMEs already embedded on the Air Warfare Destroyer (AWD), the elephant in the room, the so-called “valley of death” of inactivity between completing the last of the Hobart class ships and beginning on the first of the new submarines, is a very real threat to the pool of experience and domain knowledge that is their competitive edge.
“We’ve been saying we are already in the valley of death,” Burns said. “With the AWD they’ve been laying off design engineers. The design engineers are as important as the welders.”
The valley of death moniker has been around for years, but the day of its material effect on the ship-related workforce is rapidly drawing closer.
“It’s actually measured in months now rather than years,” Burns said. “The valley of death really hits BAE in Victoria and Forgacs at the end of this year because they run out of work on modules.
“So from a national perspective we’re well in to the valley of death. There will be a gradual decline and then we’re going to hit 2016, 2017, when a lot of the blue collar workers get laid off unless there’s some sort of other work.”
The usual suspects for “other work” are an accelerated Sea 5000 Future Frigate program, currently not even slated for final decision until at least 2018, or a fourth AWD.
“Bringing forward a frigate program could be problematic in that you have to have your design sorted out. Could that be done in time to arrest the valley of death? Probably not. But a fourth AWD could be a bridge between the AWDs and future frigates.”
Speaking at the keel laying ceremony for the second vessel, HMAS Brisbane, in Adelaide on February 3, Federal Defence Minister David Johnston refused to be drawn on either subject, restating instead the Government’s decision to create a new Defence White Paper.
But there are other possibilities. A shipyard is a shipyard, and Burns believes gainful employment could come from unexpected sources.
“It could be icebreakers,” he said. “The Australian Antarctic Division needs two icebreakers. And an ice breaker is more like a warship than it is like a merchant ship. It’s reinforced, it’s got a hospital, it carries helicopters, it’s got a command and control system. So it’s capable of operating the same way as a warship and it’s got the same level of complexity.”
With the evolved Collins replacement study now contracted and underway, and Adelaide’s 50-strong Integrated Project Team investigating new designs, Sea 1000 is about to gain greater visibility and traction. Although neither initial project will offer engagement for SMEs, they are at least a visible step forward on the road to learning what Sea 1000 will look like on the shipyard stocks, and how Australian businesses can be part of the procurement and supply chain.
