Combat Capability: Positioning for Australia’s largest Land program | ADM June 2014
South Australia and Victoria are competing to house the $10 billion Land 400 military vehicle production program, and are understandably spruiking their suitability to prime contractors and defence.
Both have good reason to want the project – as Australia’s major car manufacturing states, the loss of Ford, Holden and Toyota in 2016 and 2017 will decimate an advanced manufacturing system and workforce that has been part of their economies throughout living memory.
Land 400, the Army’s largest, most expensive and most complex major capability equipment project to date, will replace Bushmaster, ASLAV and M113AS4 APC fleets with new generation systems. As a high-tech, high-volume program with an IOC in 2020 and at least a 30-year lifespan, it would be a cure for both.
Speaking at a Land 400 industry briefing in Adelaide on April 29, South Australian Minister for Defence Industries Jack Snelling detailed the importance of the program to the Australian defence industry and national security.
“The project has similar importance to Army as the future submarine project has to Navy and the JSF for Air Force,” he said. “Land 400 is the second largest defence project in Australian history and one of the largest active fighting vehicle programs in the world. It’s a system of systems program and when the needs of through life support and upgrades are considered, has the potential to be the basis of a whole new industry for many years into the future.”
Snelling believes South Australia has the land vehicle credentials to be the logical home, with an established manufacturing base, an army unit that will be an active user and Australia’s largest land warfare range at Cultana, 370km north- west of Adelaide.
“Earlier this year a squadron of first armoured cavalry regiment was raised here, which will be a major user of up to a third of the Land 400 vehicles,” he said. “The Unique Cultana Training Area is undergoing a fourfold expansion. We’ve become the best place in Australia to undertake all year round large scale manoeuvring of the vehicles.”
South Australia has more than 30 percent of Australia’s defence workforce, including likely Land 400 bidders BAE Systems, General Dynamics Land Systems and Rheinmetall.
“South Australia has a long and proud history of building and supporting military vehicles,” Snelling said. “During the last 25 years every ADF AFV manufacturing program has been managed from here, including the M113 APC upgrade and ASLAV programs. These programs were successful because the companies involved were able to draw upon the resources of our deep local base of defence, automotive, systems engineering and heavy engineering capabilities.”
The City of Greater Geelong is spearheading Victoria’s Land 400 campaign through its Geelong Land 400 Working Group, with co-investment from the Victorian Government.
“I wouldn’t characterise us as the formal Victorian bid,” said Matthew Jones, from Enterprise Geelong Defence Business Office. “But we are the only organisation in Victoria that is currently advocating for Land 400.”
The Geelong Working Group team includes the Geelong Manufacturing Council, Deakin University, Enterprise Geelong, Committee For Geelong, Geelong Chamber of Commerce, Linfox Avalon Airport and the locally based Australian Combat Vehicle Consortium.
Together they believe Geelong and Victoria have the facilities and “culture of manufacturing” to build and maintain the fleet throughout its life.
Victoria is home to core ADF armoured vehicle development capability, hosting the Defence vehicle blast test facilities (Graytown); the armoured and protected vehicle training centre (Puckapunyal); Defence vehicle environmental testing facility (Monegeetta); heavy vehicle maintenance facility (Bonegilla); the manufacturing centre for Australia’s protected mobility fleet (Bendigo), the Defence Material Technology Centre and the Land Engineering Agency at Maribyrnong.
Jones points to Geelong’s mature port and infrastructure: direct access to Highway One, non-curfew international airport and local tertiary and technical education. Victoria faces closure of five major employers between now and the scheduled service entry date, including Alcoa’s aluminium rolling mill and smelter and Holden, Ford and Toyota. Jones believes the irony of this is a pool of trained, experienced advanced manufacturing personnel, located in the Geelong region, is about to become available for Land 400.
“Land 400 is the perfect project to help transition Australian manufacturing industry to the Government’s stated objective of an advanced manufacturing, export orientated future,” he said.
And he wants the decision on where the vehicles will be built made early in the process, not as part of prime contractor bargaining after contract award.
“We should get, at First Pass, a bias on where this program is going to be delivered, because that is in the national interest,” he added.
“The benefits are numerous. One is that you can start driving industry investment built around a location from First Pass. It removes politics from capability selection at Second Pass and it removes the ability of primes to shop amongst the States. I believe it’s the Federal Government’s responsibility to select the location in the national interest and then the primes and the manufacturers can still come up with their best capability options.”
Message from Government
Assistant Defence Minister Stuart Robert was ebullient when he addressed 140 defence industry representatives at Adelaide’s Land 400 information session on April.
The message was that Land 400 has direct support from the Prime Minister (and the only program with a Minister directly attached), is seen as core to Army’s ability to survive on the modern battlefield, and highly unlikely to suffer change of status in any upcoming White Paper.
The message to potential bidders was of schedule and risk management – the Government intends to stick to schedule and for vehicles to enter service as advertised. To that end, Robert expressed an understanding that government process could have as much effect on the schedule as any other factor. He promised a focussed and fair acquisition program, but would not be diverted by capability promises on untested systems.
“We want a vehicle that we can reach out and touch,” he said. “Don’t design a vehicle or give me a brand new design that hasn’t been used. My level of interest is not high. We’ll want a vehicle that’s in operation in a modern Western military with clear growth path into the next generation of vehicles.”
Robert confirmed First Pass this year, and said it would only take as long to evaluate initial bids as government gave the bidders to respond. “I will not countenance nor accept my department taking years and years when we only give industry months and months,” he said.
He was equally direct on the subject of contract negotiations, saying bidders must bid what they intend to provide and be ready to stand by their offering to ensure timely contract negotiation.
“The government won’t accept contract negotiations that take years,” he said. “There will not be an 18-month contract negotiation, as we saw in a vehicle decision made by another government.”
Robert said First Pass would be followed by down-select to two or, at most, three vehicle systems, which will then be tested on military ranges. On the subject of Australian involvement, he reiterated the Prime Minister’s comment that the project was about capability for Army, not job creation for industry. But Australian involvement would be maximised.
“Our intent is to maximise Australian involvement, but industry need to provide creative solutions for that to occur,” Robert told the Adelaide gathering. “I’ve said in the past, you need to give me half a chance to do the majority of this work in Australia. Industry needs to give me half a chance to make that decision.
“In terms of competition policy we use concepts like manufactured and supported in Australia (MSA) or assembled and supported in Australia (ASA). MSA means 50 percent or more and ASA is 25 percent or more. My passionate hope is that we would take 50 percent or more content for the combat reconnaissance vehicle, infantry fighting vehicle, manoeuvre support and other bits and pieces. But industry has to provide creative, well costed solutions for that to happen.”
Brigadier Nagy Sorial, Director General Combined Arms Fighting and Program Manager for Land 400, illustrated his view on MOTS, amid concerns that the requirement a platform is already in service with a Western military may result in a direct buy with little local involvement.
“My intent, like every Australian’s, is not that we provide a contract to a company where the foreman of the day makes a million dollars. It’s to allow that foreman, through to the youngest apprentice coming in the door on the same day, kept gainfully employed until that apprentice becomes the foreman. It is long term.
“This is not government policy; it’s just the industry according to Nagy. It’s about establishing a process that allows long term sustainment of a capability, long term involvement, technology transfer, in to Australia with manufacturing and development capability, allowing for generations of continued growth and relevance here. Not just buy it, deliver it, close down.
“MOTS is about the design. It’s not about buying a vehicle off a production line overseas, putting it on a ship, bringing it out here and issuing it to soldiers, it’s about buying the design. Some of it will probably be made overseas and we’re all aware there are some things we just don’t make in Australia.”
Nagy also put paid to any suggestions that Land 400 is a ‘truck race’. “It’s not about a metal box,” he said. “Whilst a critical component of what Land 400 is about, it’s the easy bit. It’s about ensuring all the metal boxes are fully integrated with the solutions required to fight on the modern battlefield and remain relevant on that battlefield for their lifespan.
“We know with the vehicles we and other Western militaries have today, that period is between 30 and 50 years. So we’re not talking about something we will replace every five or 10 years. Whether it is bought in phases or as a package, the end result has to be the same. It has to provide that system of systems.
“Mounted close combat is a core land capability. If you have an army you need to be able to conduct close combat. That’s what western armies do. Land 400 provides mounted close combat, so from my point of view there is no grey around that in upcoming white papers.”