Project Review: Projects of Concern now public | ADM Dec 2010/Jan 2011

For the first time since its creation in 2008, an updated and complete list of Defence’s Projects of Concern (PoC) – also known as the name and shame list – has been publically released, together with brief explanations.

Julian Kerr | Sydney

This is a welcome departure from past practice by newly-installed Defence and Defence Materiel Ministers Stephen Smith and Jason Clare.

Previously, the existence of the list was disclosed and most of the projects on it became known but were not always officially acknowledged, whether for commercial or for security reasons.

But projects coming off the list were always announced which much fanfare.

Projects are placed on the list when they are facing significant challenges with scheduling, cost or capability delivery.

They immediately come under close ministerial scrutiny and the managerial supervision of Warren King, Deputy Chief Executive Officer and General Manager Programs at the Defence Materiel Organisation (DMO).

Of the 18 projects placed on the list since 2008 at the recommendation of DMO Chief Executive Stephen Gumley, five have been remediated and one – the ill-fated Super Seaprite program – was cancelled.

Of the current list of 12 projects, 11 are unchanged from those included in Defence’s brief to the incoming Gillard government in September, although that brief added more detail by designating the projects as red, amber or green.

Red indicated that unless significant risks were remediated, the project would be unable to deliver the required capability to the ADF.

Amber indicated continued high risks of achieving objectives, with the project remaining under close PoC management.

Green showed that key project risks had been mitigated and remediation objectives were likely to be met within 12 months, leading to removal from the current PoC list.

This list was released on 15 October.

However, a surprise update on 26 November saw the addition of Air 5418 – acquisition of the Joint Air to Air Standoff Missile (JASSM) for the RAAF’s F/A-18A/Bs.

The JASSM project is now running more than 12 months later due to software integration issues, but Minister Smith told Defence’s Senior Leadership Group (SLG) that its listing was due not to cost issues or delays but to “poor management, our failure to keep government properly and fully informed about the project and its difficulties.”

A live firing from a RAAF F/A-18 will take place in the US later this year or early in 2011, and Smith said Defence would provide the government with a full report on the test “to inform the government’s consideration on the way forward with respect to this project.”

Defence had been asked to review the effectiveness of its management of major projects, and JASSM would be used as a case study for improvements in this area, the Minister said.

Not surprisingly, companies whose projects are thus held up to the spotlight are generally reluctant to discuss what put them there, although the reasons may already be widely known via a variety of sources.

Likewise, the DMO understandably also resists comment because of commercial confidentiality and, one suspects, occasional embarrassment.

It is here, therefore, that the Senate Foreign Affairs, Defence and Trade Committee comes into its own, most recently with questions directed at senior ADF officers and DMO executives in the course of the recent Supplementary Budget Estimates hearings.

Continuing problems with Collins class reliability – thought to involve the submarines’ diesel engines, generators and electric motors – head the PoC list.

This was now under intense management, with a leadership group consisting of the Chief of Navy, King and the CEO of ASC working out the remediation of Collins’ sustainment activities.

Defence has subsequently confirmed to ADM that the Collins class fleet is to be the subject of an RAN Seaworthiness Board (SwB) for the second time in little more than a year.

A Defence spokesperson said the Board would meet in 2011 and “make recommendations to the Chief of Navy (CN) on the continued certification and ongoing release to service of the subject system.”

Turning to Wedgetail, King disclosed that final acceptance of the six AEW&C aircraft had moved from December to March or June of 2011.

Radar performance in tracking targets in a cluttered environment was “not at the performance level that was anticipated in the contract”.

It’s also understood, although not mentioned at the Senate committee hearings, that 360-degree coverage has not been achievable from the Northrop Grumman MESA (multi-role electronically scanned array) radar mounted on top of the Boeing 737-700 fuselage.

While “quite some difficulty” was being experienced with the technically-challenging Anzac anti-ship missile defence upgrade when it first made the PoC list, progress had been very good over the past 12 to 18 months, and testing on the first ship was scheduled for June or slightly later.

Once the technology was brought to fruition it represented an enormous export opportunity for Australia, King said.

“When we started this program the probability of failure was rated higher than the probability of success.

“I would say the probability of success is now very much higher than failure at this point,” he added.

High Frequency Modernisation along with the Vigilare air defence and control system and even the Multi-Role Tanker Transport (MRTT) aircraft is a project whose continued designation as a PoC has surprised analysts.

A press release issued by prime contractor Boeing Defence Australia (BDA) in July stated that a formal letter of project completion had been received from the Commonwealth on 16 June.

However, King said some remediation work remained outstanding on fixed sites.

Moving to Vigilare, King disclosed that although initial operational capability had been established, about 15 per cent of the requirements had still to be met.

Cautioning that the last 10 per cent was the hardest to accomplish, King said the project was in a good position, “improving, with some way to go yet and some work and attention needed.”

According to BDA, final acceptance is expected in mid-2011 – presumably after completion of the Eastern Regional Operations Centre at RAAF Base Williamtown.  

The system was accepted for operational service on 2 September at the Northern Regional Operations Centre at RAAF Base Tindal, and prior to that was employed as the central C2 node, providing continuous surveillance and battlespace management for offensive counter-air and offensive air-support operations, in Exercise Pitch Black 2010.

Vigilare is also being actively marketed by Boeing in the Middle East as part of a wider offering.

It appears to be second time lucky for JP129 Phase 2, under which two complete AAI Shadow 200 UAV systems are being acquired from the US via the Foreign Military Sales channel.

This includes 18 Shadow 200 aircraft, ground control systems, vehicles and other support systems and training at a total cost of $175 million.

Funding is included to enable the expedited delivery and operation of the new UAVs to the Middle East Area of Operations. King said the initial capability should be delivered into theatre towards the end of 2011.

The original JP129 Phase 2 contract, primed by Boeing and utilising the IAI medium level I-View 250A system, was cancelled in September 2008 after, King said, “we added some requirements, which is why we made it very hard for the contractor to deliver.”

Questioned by Senators on what complexities were involved in buying medium-heavy trucks under Land 121 Phase 3 (Overlander), King said projects occasionally needed oversight to ensure they did not inadvertently strive for the best when good or better would be good enough.

The tender evaluation stage was nearly complete, and contract signature was anticipated in the latter part of 2011.

Reviewing the MU90 lightweight torpedo program, the subject of an adverse Australian National Audit Office report in 2010, King confirmed that the torpedo had been integrated into the Anzac and FFG frigates and was being readied for the AWDs.

The preferred course to test the system as installed on a ship, subject to safety case and safety analysis, was to use a Collins class submarine as a target, as had been done with other torpedo types.

The Navy has planned operational tests and evaluation to see how the torpedo performs against mobile targets in shallow water later next year.

Hopefully, operational release would follow in the first half of 2012.

Air 5402 – MRTT – is another program whose place on the PoC is expected to be short-lived.

Clare said the main focus was now on addressing further schedule risk to ensure delivery and acceptance of the first two of the five aircraft by the end of 2010, and EADS CEO Australia-Pacific, Fabrice Rocherereau, confirmed to ADM that this was on track.

Installation of the LAIRCM (Large Aircraft Infrared Countermeasures) equipment was a separate issue, and because of ITARS (International Traffic in Arms) regulations would probably take place in the US after delivery, he added.

The appearance of the LCM2000 watercraft as a PoC is hardly surprising.

Approved in 1997 and completed by ADI (now Thales Australia) in Newcastle in 2006 under a $32 million contract, the six LCM2000s were intended to transport troops and equipment to shore from the LPAs Manoora and Kanimbla.

However, Clare said the LCMs had not been able to prove they met the needs of their operational roles on Kanimbla and Manoora and for support of land forces.

According to unofficial sources, the 65-tonne watercraft were designed to be placed on frames on the foredecks of the LPAs.

However, when they were actually loaded on the ships, they were found to be too wide for personnel to move past safely.

A Defence spokesperson said the LCMs have been used “to train crews, complete operational test and evaluation, and other minor tasks such as exercises.”

If the Townsville Bulletin is to be believed, the six watercraft have also spent a lot of time on concrete slabs at the Rosshaven Marina.

Finally, an 18-month lag in upgrading the electronic support measures (ESM) of the RAAF’s 19 AP-3C Orions has seen this project placed on the PoC.

Completion had been anticipated in December 2010 and is now expected in June 2012.

A BAE Systems Australia spokesman told ADM the company had advised the DMO in July 2009 of delays caused by the unexpected scope and complexity of software and engineering issues in upgrading the Orions’ AN/ALR20001 ESM suite.

Since then, additional resources had been provided and the company had held to the revised project schedule.