Airbus Australia Pacific managing director Andrew Mathewson last week called for an open competition to fulfil Defence’s requirement for 29 replacement armed reconnaissance helicopters, to be acquired under Land 4503.
Mathewson’s comments follow recent reports in some sections of the media that Defence is negotiating a sole-source acquisition of 29 Boeing AH-64E Apache helicopters, via the Foreign Military Sales (FMS) process.
Companies vying for the $4-5 billion project to replace the Australian Army’s current Airbus Helicopters Tiger ARH, with a proven, mature and off the shelf armed reconnaissance helicopter platform, include Boeing (AH-64E) and a Bell/BAE Systems Australia teaming arrangement (offering the Bell AH-1Z Viper).
Airbus in turn is proposing an upgrade to the incumbent Tiger platform. Late last year it presented an unsolicited bid to Government, leveraging the ‘Smart Buyer’ methodology, to upgrade the 22 existing Tigers and supply seven new H145M light helicopters. It claimed that under a deal, Defence would save around $3 billion out to 2040.
Mathewson confirmed last week that Defence has rejected the Airbus proposal and the company is now offering a more comprehensive Tiger upgrade, including seven additional airframes (for a total of 29), which he says can still realise a saving of up to $3 billion, in a bid based on “capability, jobs and savings”.
“Last week we received a letter from the Minister of Defence confirming our (original) bid had been rejected, but we also understand that times have moved on and our objective today is just to compete,” Mathewson said on October 7. “We’ll be offering an upgraded Tiger with a more extensive upgrade than the one we proposed in our previous campaign. We know we can save them around $3 billion, even with a more extensive upgrade, and we will work hard to find seven additional Tigers.”
The European Tiger production line is now closed and while Mathewson says he can’t confirm where the additional seven airframes will be coming from, he says work has already been undertaken to source them.
“I wouldn’t like to disclose specifically which nation would be able to support us in that, but we wouldn’t be making these comments without having done some homework in Europe,” he said.
Besides the Australian Army the Tiger is operated by the armed forces of France, Germany and Spain.
Mathewson also declined to provide specific details of the wider ranging upgrade that now forms part of the new proposal, other than to say that it would include a Link 16 tactical data link (either fully integrated with the helicopter, or a federated system, depending on customer requirements) and would leverage the proposed European Tiger Mk.III upgrades as much as possible.
Eighteen of the Army’s 22 Tigers were assembled by Airbus (as Australian Aerospace) in Brisbane and Mathewson says the upgrades, including the seven additional airframes, will also be done in Australia, using the company’s local workforce and supplier base.
“Right now, we have 496 Australians whose job directly or indirectly supports the Tiger capability, and that’s because we have been able to flow the supply chain from Europe to Australia in a very effective way,” he said.
While the origin of the reports of an Apache sole-source FMS buy cannot be confirmed, Defence is seemingly awash with cash at the present time. As ADM’s managing editor Katherine Ziesing observed in her analysis of last week’s federal budget: “Defence’s biggest problem will be getting the money out the door fast enough.”
There has also been speculation that a defence underspend in the near-term could be at least partially addressed by acquiring capability via the relatively quick and straightforward FMS process, but a Defence spokesperson confirmed to ADM on Friday that a Land 4503 acquisition strategy is yet to be decided upon.
“A Request for Information (RFI) was released to market in July 2019, seeking information in support of the development of options for Land 4503,” the spokesperson said. “No procurement pathway has been decided at this point in time. Defence continues to co-operatively consult with industry and engage with other defence forces to fully understand options for the Land 4503 project.”
In a further statement at the end of last week, a Defence spokesperson confirmed that an FMS purchase of Apache had not even been discussed at the recent AUSMIN talks, held in the US in July, and Boeing Defence Australia also declined to comment on the media reports.
“Boeing respects that this is a decision that will be made by the Australian government,” a BDA spokesperson told ADM late last week. “Boeing stands ready to support Australia with Apache’s proven, reliable and value-for-money capability.”