Defence Business: Overlander - no shortlist, just winners and losers

1 November 2007

By Gregor Ferguson

Defence has by-passed the shortlisting process it had planned for Project Overlander and gone straight to a source selection. However, there are other opportunities coming up for vehicle manufacturers to win Defence’s business.

BAE Systems, Daimler Chrysler and local firm Haulmark Trailers Australia have been chosen to replace most of the ADF’s current fleet of trucks, trailers and utility vehicles in a program worth $3 billion.

Defence minister Dr Brendan Nelson made the long-awaited announcement in Brisbane 5 October that the ADF will acquire approximately 3,400 Light/Lightweight, medium and heavy trucks and about 3,000 trailers under Project Land 121 - Overlander.

The exact numbers and configurations of the vehicles remain subject to contract negotiations, but the approximate breakdown is: 1,000 Mercedes-Benz G-Wagen 4x4 and 6x6 unarmoured Light/Lightweight utility vehicles; 2,400 Medium and Heavy FMTV (Family of Medium Tactical Vehicles) trucks from BAE Systems Mobility and Protection Systems (formerly Armor Holdings – Stewart & Stevenson) and 3,000 trailers of nine different variants from Brisbane-based Haulmark.

Shortly after making the main announcement in Brisbane Dr Nelson flew to Newcastle where he announced that Tomago-based Varley Defence, a subsidiary of GH Varley Pty Ltd, is a leading contender for more than $100 million work building vehicles and specialist modules.

“Subject to satisfactory contract arrangements, Varley, as a key subcontractor, would be responsible for development and production of specialist modules, worth about $40 million, for the Daimler Chrysler fleet,” Nelson announced.

“Varley is also one of the potential subcontractors to BAE Systems Australia to provide modules for the medium and heavy weight vehicles, with a total value of about $100 million.”

Contract negotiations pending
The Overlander contract negotiations are expected to take about six months; the vehicles will be acquired under Phase 3 of Project Overlander, which also saw an order in August for 250 armored and mine-protected Bushmaster Infantry Mobility Vehicles (IMV), worth 300 million Australian dollars, from Thales Australia, Sydney.

ADM understands that plans to split Phase 3 into sub-phases A and B, with a rapid acquisition of vehicles and trailers under Ph.3A for high-readiness Army units, have been shelved.

Phase 3 will now be a homogeneous purchase; local purchases of Bushmaster, specialist vehicle modules and trailers will be worth approximately $800 million, according to Dr Nelson.

“When deployed on operations the vehicles will be capable of being fitted with enhanced protection to reduce the risk to our service men and women from threats such as suicide bombers, improvised explosive devices, land mines, bullets and other projectiles,” he said.

The new trucks will progressively replace the ADF’s current inventory of Mercedes-Benz Unimog 4-tonne trucks and Mack and International heavy trucks and semi-trailers. The existing fleet of Landrover 4x4s and 6x6s will be replaced in two stages – Phase 3 and the recently announced Phases 4 and 5.

Phases 4 and 5 of Project Overlander are slated for funding approval in 2010 and 2012, respectively, according to the head of Project Overlander, Brigadier David O’Brien.

He told ADM Phase 4 will see the acquisition of a further 1,200 armoured light vehicles in the 1 and 2-tonne payload class, worth an estimated $1.2 billion, while Phase 5 will see the acquisition of about 2,000 unprotected, commercial off the shelf trucks and utility vehicles worth around 300 million Australian dollars; these will be used for training and low-risk logistics tasks, he said.

“Protection is a key aspect of Overlander,” O’Brien told ADM. While the G-Wagen 4x4 and 6x6 vehicles will be only lightly protected, many of the 5-, 10- and 16-tonne payload FMTVs and semi-trailers will have armoured cabs or be capable of carrying Survivability Enhancement Kits (SEK) to protect their crews and occupants in high-threat environments.

Increased survivability
The extra weight of SEKs has less effect on the performance and payload of larger trucks. Armoring smaller vehicles while maintaining acceptable levels of performance and payload is a tougher challenge, he explained.

The 1,200 protected vehicles to be acquired under Phase 4 of Project Overlander, along with the 1,000 G-Wagens to be ordered under Phase 3, will replace the Army’s current fleet of soft-skinned Landrover Perentie 4x4 and 6x6 vehicles. However, the Special Forces’ long-range patrol vehicles, which are based on the Landrover 6x6 design, will not be replaced under Project Overlander.

Replacements for the long range patrol vehicles and new vehicle capabilities will be acquired under Project Redfin, which is charged with re-equipping the Special Air Service Regiment (SASR) and the Army’s regular and reserve commando regiments with new and upgraded vehicles, weapons, communications and other mission equipment.

The value of Project Overlander to BAE Systems is estimated to be between $1 and $1.5 billion, depending on final numbers and configurations, the company, and includes payload modules, technical services and spare parts.

BAE Systems Australia will establish a new vehicle support facility in the Adelaide area to carry out any final fitout and payload module integration work required before delivery, and support the vehicles once in service.

No site has been selected as yet for this facility, though the company is believed to be eyeing the Edinburgh Parks area adjacent to DSTO, RAAF Edinburgh and the recently announced facilities for 7 RAR.

This is also adjacent to the road/rail intermodal transfer facility on the Adelaide-Darwin railway. The former Mitsubishi Motors engine plant at Lonsdale in Adelaide’s south is also a potential site, though reportedly less favoured than others closer to South Australia’s defence industry heartland in the north of the city.

Although sources at BAE Systems and DaimlerChrysler have declined to comment ahead of contract signature it seems likely most of the vehicles ordered under Phase 3 of Project Overlander will be imported fully assembled and fitted only with specialist role equipment such as winches, radios and specialized payload modules in Australia.