Many ADM readers will note that I have a special place in my heart for Senate Estimates and their not so well-known cousins; Questions on Notice (QoN) and their subsequent answers.
This is when a question is asked, and the respondent does not have the information at hand and will get back to the committee later. To give you an idea of scale of what this can look like, in the most recent Senate Estimates hearing on December 11 last year, over 1,000 responses were generated by the Department which are all available online.
They contain many little gems. For example, take this exchange with Senator Penny Wong and General Manager Submarines Greg Sammut.
“When will the preponderance of Australia's operational submarine fleet be future submarines? When will the majority of our submarine fleet be Attack class? Will it be six attack and four Collins submarines in 2042 can you confirm?”
Answer: “Subject to Government’s decision on the number of Collins class submarines to undergo life-of-type-extension, the majority of the submarine fleet will comprise Attack class submarines in 2042.”
There are so many little details that get left out of ministerial statements and industry press releases that can be picked up from this process. There were a few that stood out to me that warranted further follow up; Defence ICT programs in the Portfolio Budget Statements (PBS), the Hunter class design review timeline and Land 400 Phase 2 build program.
Defence ICT programs are no longer the single province of the Chief Information Officer; they are an integral part of generating capability to the wider ADF, both at home and on operations. The Terrestrial Communications program has a total budget $461 million while ERP has a total budget $469 million under the first of many tranches. These figures alone would put both programs well within the PBS Top 30 table if it included ICT projects. ADM asked ‘Will ICT programs be included in the PBS going forward in any way? If not, why?’
“The Top 30 Acquisition Projects tabled in the Defence Portfolio Budget Statements (PBS) has historically focused on projects in the Military Equipment Acquisition Program, as this represents approximately 75 per cent of the total Acquisition Program,” a Defence spokesperson said. “By comparison, the ICT Acquisition program represents just five per cent of the total Acquisition Program in 2020-21.
“Defence will review the presentation of projects in future PBS as part of ongoing improvements of presenting financial information.”
The Department might have ‘historically focused’ on traditional military programs but perhaps it is time for this to change.
QoN also outlined how the Final Critical Design Review for the Hunter class is now Q1 2025, somewhere between 2-2.5 years after actual construction is meant to start. ADM cannot help but think of other shipbuilding programs where build started before the design was set in stone and the issues that caused.
“Design work is continuing on the Hunter Class frigate in areas where it differs from the baseline Type 26 design,” a Defence spokesperson said. “This is largely focussed on Australian specific design elements such as the installation of the Australian CEA Technologies radar and US Aegis combat system.
“The spatial integration of the Design Zones lower in the ship (which generally have a low level of change to the Type 26 reference ship design (RSD)) can proceed while the design matures in the Design Zones higher in the ship (which have a high level of change from the RSD). This allows construction of the mature Platform elements, the Design Zones with low level of change, to begin while the advanced Combat System design is finalised.
“The actual Final Critical Design Review process will occur over an extended period of time and will be a final culmination of both Platform and Combat Systems Design efforts. The Q1 2025 date represents when the Project expects to exit the Review,” a Defence spokesperson concluded.
In a nutshell, get the ‘easy’ bits done first and do it in a rolling wave.
Land 400 Phase 2
There have been some rumblings in the SME community about how the build program for the 211 Boxers under Land 400 Phase 2 is coming along. Some companies are being asked to quote for as little as 40 vehicle sets of equipment up to 180, a huge quantum that affects their ability to quote competitively.
QoNs confirmed that the first 25 vehicles going to be built in Germany, but the next 44 ‘will be progressively built and assembled under a gradual ramp down in Germany and ramp up in Australia.’
ADM asked: ‘Can you confirm that a third of the total 211 vehicles will be assembled all or in part in Germany? What is the manufacturing breakdown between Australia and Germany? How does that affect their AIC commitments?’
“The number of Boxer vehicles to be built or assembled in Australia has not changed,” a Defence spokesperson said. “As stated in the response to the Questions on Notice, the 25 ‘Block I’ Boxer vehicles will be built and assembled primarily in Germany, then the first 44 ‘Block II’ vehicles will be progressively built and assembled under a gradual ramp-down in Germany and ramp-up in Australia.
“During the COVID-19 pandemic, Rheinmetall has been fast-tracking some of the assembly to Australia. For example, due to COVID-19 restrictions in Europe, Rheinmetall has taken the opportunity to transition some ‘Block I’ Boxer vehicle final assembly and quality acceptance work to Australia much earlier than originally planned.
“Production transfer of each major sub-system has been planned for different times, depending on the commissioning of different production zones in the Military Vehicle Centre of Excellence (MILVEHCOE). The production zones include turret and mission module welding, armour manufacture, electro-optics and electronics component assembly, cannon assembly, turret and vehicle build and integration, and simulator assembly. Further, Defence and Rheinmetall Defence Australia have not yet finalised the design of all variants of the Boxer, which will inform production transfer. This process is ongoing.”
While the November 2020 ANAO report into the Phase 2 acquisition strategy was relatively positive, there were some issues around the Risk Mitigation Activity (RMA) that will hopefully be addressed in the Phase 3 activities.
“Rheinmetall Defence Australia’s Australian Industry Capability commitments have not changed,” a Defence spokesperson concluded. “Rheinmetall Defence Australia’s Public AIC Plans includes an Australian expenditure commitment of $1.685 billion for the acquisition contract and $173 million for the support contract.”