Industry getting to grips with Land 121
With the request for tender for Phase 3A of Land 121 due out in November there are many in defence industry struggling to come to grips with just what the Commonwealth wants from this complex multi billion dollar project, and what they can offer to fill those needs.
Phase 3A of Land 121 commences the replacement of the ADF's field vehicles and trailers in high readiness units, while Phase 3B will eventually provide new field vehicles and trailers for the remainder of the ADF.
The Commonwealth's current intent is to link Phases 3A and 3B, and tenderers will be requested to price the Phase 3A requirement and agree pricing mechanisms and controls for Phase 3B. Whole of life costs across all of Phase 3 will drive the outcome of Phase 3A's selection. The whole of life costs across Phase 3, together with commitment to the strategic relationship and successful performance of Phase 3A, will determine whether the selected contractor proceeds to deliver Phase 3B.
With Land 121 Phase 3 cost capped at somewhere near $3 billion, there is clearly a lot riding on this; both for the Army who are in great need of new vehicles and industry for whom this project represent a significant business opportunity. The linking of the two phases means that the contenders are under pressure to get it right up front and then deliver on their promises if they want to exploit the deal to its full potential.
Phase 3A will cover the purchase of approximately 1,300 vehicles, while Phase 3B will see somewhere between 4,000 and 7,000 further vehicles acquired. The year of decision for Phase 3A is currently listed as June 2007, and Phase 3B as sometime in the 2007/2008 financial year. In service delivery for Phase 3A is expected between 2009 and 2011, while for Phase 3B the schedule is for delivery between 2012 and 2015.
Those year of decision timings make it difficult to see how the Commonwealth will have much of an opportunity to gain a valid idea about its chosen contractor's performance before pressing on with Phase 3B.
Only Military-off-the-Shelf (MOTS) vehicles are being sought for Phase 3A, but due to the project cost cap both MOTS and commercial vehicles may be considered as options for Phase 3B. It is understood that the cost/capability trade-off in MOTS vehicles selection (ie, how much of the budget is spent on specialist military vehicles) will drive the extent of COTS vehicle purchase.
An industry briefing was held in May this year to bring the various contenders up to speed with the Commonwealth's latest thinking on Land 121. According to the briefing material MOTS means a product that is available for purchase that has been delivered to another military or government body in a similar form to those requirements sought by the ADF. Modified Military-off-the-Shelf (MMOTS) or "Australianised" MMOTS means a MOTS product that is modified to meet the particular requirements of the Australian and regional physical environments, legislation, Australian Design Rules and the ADF's particular operational requirements.
The briefing material listed the project's key technical issues as:
* Military off the shelf
* Mobility requirements
* Protection levels
So far as protection is concerned it was specified that where appropriate vehicles should be fitted for protection against ballistic and mine threats with reference to STANAG 4569, "Protection Levels for Occupants of Logistics and Light Armoured Vehicles". Information on protection levels that would be classified "Restricted" will be forthcoming to the appropriate potential suppliers at RFT stage, but in the meantime a number of contenders are seeking to arrive at a working definition of protection; ie, do the occupants survive to leave what's left of an attacked vehicle under their own steam, or is the Commonwealth willing to fund only protection levels that would see survivors left with merely a pulse?
At the industry briefing it was stipulated that, "Given that MOTS solutions are being sought, competitive comparative testing will not be conducted". This is an interesting point that has subsequently been questioned by some of those involved, and ADM understands that there may now be some departure from this intended course of action.
It was also outlined that, "For acceptance purposes, compliance testing will be conducted to verify claims against the tender specifications". Some are left wondering just how protection levels will be tested and verified? Perhaps by gaining access to testing already done by the manufacturer's home country defence force.
Land 121's capability requirements cover the six generic vehicle types listed below.
* Lightweight: 1 tonne payload
* Light: 2 tonne payload
* Medium weight: 5 tonne payload
* Medium: 10 tonne payload
* Heavy: 16.5 tonne payload
* Truck Tractor: 35 tonne towed
>From those six generic vehicle types will come 14 functional vehicle types that variously include 19 different modules and integrated systems. Logistic and through life support is also required.
The Commonwealth desires that the new vehicle fleet maintain or enhance current capability, provide improved availability, mobility and personnel protection along with better communication and tracking systems. Improvements are also sought in payloads and throughput, reduced whole of life costs, reliability, configuration management, diagnostic and prognostic systems and fuel consumption.
According to some of the industry players the requirements are not the sort of "informed compromise" that any manufacturer could promise to fulfil with certainty, but rather a series of conflicting worst case scenarios that would be practically impossible for anyone to meet.
Is mission profile more important than the specification, and anyway, just how are Australian forces planning to operate in the future and in what environment? In the eyes of many there has been a lack of holistic debate on that subject, at least publicly, while some suggest that remains the case behind the ADF's closed doors as well. Also, the Commonwealth's insistence on blanket Australian Design Rule compliance for specialist military trucks when a number of ADR waivers will be required anyway has caused frustration among some of the contenders.
The various requirements have been categorised for assessment as follows:
* Essential: Failure to meet an essential requirement WILL lead to exclusion of the tender
* Very important: Major departures or substantial numbers of minor departures from very important requirements may lead to the tender being passed over in favour of tenders that more effectively meet very important requirements
* Important: Major departures or substantial numbers of minor departures may lead to the tender being passed over in favour of tenders that more effectively meet Important requirements
* Desirable: A beneficial enhancement to the tenderer's proposal.
The project will see three RFTs issued; a restricted tender to nine short-listed companies for the acquisition of for Medium/Heavy MOTS vehicles, task modules and their through life support, an open tender for the acquisition of Lightweight/Light MOTS vehicles, task modules and their through life support, and a tender for the trailers and their through life support.
Short listed Companies for the Medium/Heavy Vehicle Segment are:
* ADI Limited
* Daimler Chrysler Australia-Pacific
* General Dynamics - Land Systems Australia
* MAN Nutzfahrzeuge AG
* Mack Trucks Australia
* Scania Australia
* Stewart & Stevenson
* Tenix Defence
* Terex Corporation
While referred to as a shortlist, with nine potential bidders on it this list it is widely regarded as anything but short. The workload for the project team if called on to evaluate complete bids from this many players will be enormous. There are widespread industry concerns that the project's assessment process is in need of some key differentiators, and that once these criteria have been established the various bids be scrupulously compared on the same level.
Notwithstanding the fact that overseas companies will supply the lion's share of Land 121's requirements, particularly at the medium to heavy end, the Land 121 briefing material listed a number of local industry related goals and outcomes that the Commonwealth wants to see addressed in the various tenders:
* Optimal utilisation of Australian industry to provide best possible cost-effective support to the ADF
* Generation and sustainment in-country critical industry capability such as:
- supply chain management
- workforce development and sustainment
- innovation, research and development
- global engagement
Industry Capability Outcomes sought by the Australian Industry Capability Plan
are:
* Access to an Australian based skilled workforce
* Access to an Australian based cost-effective through life support system
* Interoperability with other service and coalition forces as required
The Australian Industry Capability Plan also requires tenderers to identify Local Industry Activities and whether work is done by Australian industry as part of a specific contract between the Commonwealth and its industry partner. Tenderers will also be asked to identify activities which will facilitate the achievement of the Industry Capability Outcomes.
Also listed were what the briefing material described as potential local industry activities:
* Vehicle production: component and system production, assembly, modification, fitting-out tasks, systems integration, testing and acceptance, associated equipment production, shelters, modules, load handling equipment and cranes.
* Through life support: training, facilities development, maintenance and component production.
* Exports: seats, panels, gauges, dashboards and air bags.
Australia has a well-established automotive industry with considerable depth and experience, and it ought to be possible to spend a fair chunk of Land 121's $3 billion budget locally while still obtaining for the ADF the top shelf capability it deserves. However, with a few honourable exceptions, both Defence and Australian industry's record with specialist military vehicle projects is not good. Let us hope the Commonwealth's project management skills and local industry's capabilities can be combined with the best products overseas manufacturers' have on offer to deliver a successful outcome for this crucial project.
By Daniel Cotterill, Canberra