Defence is facing tough decisions over the future of the Triton program after US Department of Defense budget papers heralded a two-year pause in production.
Six Northrop Grumman Triton maritime ISR systems are being procured under Air 7000 Phase 1B to complement P8-A Poseidons. The Tritons are under development through a $200 million cooperative program with the US Navy, which allows RAAF to take on a degree of risk in exchange for a limited ability to tailor the program towards unique Australian requirements. A seventh aircraft remains under consideration, with IOC currently scheduled for 2023-2024 and FOC for 2025.
Northrop Grumman has been advocating for the Commonwealth to approve the final four aircraft as a single block to gain cost savings and program certainty. Investment so far totals A$1.7 billion on two Tritons, the aforementioned $200 million and supporting physical and information infrastructure.
“We also hope that we get the next tranche of four remaining aircraft, a total of six approved, at the start of next year by Government, and by doing that we think there will be some advantages, including cost savings and industry opportunities, that we will be able to leverage by getting all of the aircraft agreed in that next tranche,” CEO Chris Deeble recently said to ADM in a From the Source interview. “We also think there’s a good argument for a seventh.”
Yet all that could now be in jeopardy after US budget papers announced a ‘production pause’ in FY 2021 and 2022 and “[deferred] further procurement of the Multi-INT configuration until FY 2023.” The funding could instead be directed towards the Trump administration’s border wall, which tapped into the Pentagon’s budget after neither Mexico nor Congress would pay the full cost.
According to ASPI Senior Analyst Marcus Hellyer, the decision could forecast trouble for the future of Australia’s Triton program.
“The Triton has already suffered a 61 per cent increase in development cost and a 70 per cent increase in acquisition schedule, so with a two-year production pause on top of that plus the cost of restarting production, it’s looking more and more like an easy target for budget predators,” Hellyer said. “There are no guarantees US Navy production will start up again.”
In response to questions from ADM, a Defence spokesperson cited a statement provided to other outlets.
“Defence is aware of the US Administration’s budget request to Congress, which includes a proposed pause on Triton production funding for two years until 2023. It is important to note that this request is not the final US Defense budget,” the spokesperson said. “The Department is working closely with both the US Navy and Northrop Grumman to understand impacts on the Australia’s Maritime Patrol Program.
“No decision has been made by the Australian Government to defer elements of the Triton Program.”
Northrop Grumman Australia CEO Chris Deeble said the company is ‘committed to working’ towards a solution and highlighted the possibility of Australia stepping forward to fund the empty production slots.
“The Triton industry team recognizes that pausing production would have a negative impact on the timely delivery of this capability to the warfighter and we are committed to working with various stakeholders to sustain Triton production, and ensure our US and Australian customers receive this critical capability,” Deeble said. “The proposed production pause may represent an opportunity for the Australian government to bring the Triton capability forward, while ensuring affordability.
“The option that is now available to Australia is to accelerate their purchase of the Triton capability by fielding some of the US Navy stocks, so we’re working very closely with the US Navy and with the Australian customer to ensure that we can provide the best price for the Triton Capability for the Australian Government and we remain within the spend spread that is currently included in the DIIP.”
Doug Shaffer, vice president and program manager of the Triton program for Northrop Grumman, said the company is working with the US Navy to give Australia the option to buy the balance of the Triton fleet in LRIP 5.
“[President’s Budget 2021] has created an incredible opportunity for Australia, we’ve been working with the US Navy to provide an option to buy the rest of their aircraft as part of the LRIP 5 contract.
“That provides a significant unit cost savings to Australia, so now’s the time to buy more than ever. We are offering the lowest price that we ever have for an unmanned platform to Australia at this time.”
However, Hellyer warns this could be a financial pitfall for the Commonwealth should the US Navy decide to pull out altogether after the pause.
“This ‘opportunity’ may be a trap,” Hellyer said. “If the US doesn’t continue the acquisition program, Australia may be on the hook for one-third of the future spiral development costs of a total fleet of around 20 aircraft.”
In a meeting on Wednesday, Deeble said the company was confident the US Navy intends to continue with the program.
“It is a primary mission for the US Navy to sundown their EP-3E fleet. There is significant sunk cost for Navy, and when you look at the USN’s need, there is no other alternative other than Triton equipped with Multi-INT capability,” Deeble said. “The indications from our perspective are that they’re committed and this [budget determination] was made purely on the availability of dollars.”
Doug Shaffer, vice president and program manager of the Triton program for Northrop Grumman, said that the USN cited the need to invest in the IFC-4 configuration and ‘larger Navy enterprise costs’ as the reason for the pause.
Shaffer also indicated that the LRIP 5 contract would be drawn up with the USN at the end of the month and that Australia would need to make a decision on the five aircraft by the end of June.