Defence Budget 2011 / 2012

Bucking the trend of recent years, the Defence budget has actually been pruned with money being returned to consolidated revenue – but is still healthy at a fraction more than $29 billion. The majority of the “savings” have resulted from the Department not spending as much on equipment for which funds had been allocated in the previous budget, totaling $1.3 billion. For this, Defence Minister Stephen Smith blames industry for not meeting payment milestones. This seems to over simply the situation and it is worth noting that last financial year the Government only managed to give Second Pass approval to eight out of a scheduled 14 projects and only two out of more than 20 of those scheduled for First Pass. Clearly, the Government’s own processes are far from perfect. Delaying First and Second Pass approvals is denying the ADF equipment it needs, is hurting industry and will have the inevitable consequence of leading to a funding blow out in future years.

6th Jun 2011

 Defence Budget 2011 / 2012

 Defence budget cuts due to “reprogramming”.

 Kym Bergmann / Canberra

Bucking the trend of recent years, the Defence budget has actually been pruned with money being returned to consolidated revenue – but is still healthy at a fraction more than $29 billion. The majority of the “savings” have resulted from the Department not spending as much on equipment for which funds had been allocated in the previous budget, totaling $1.3 billion. For this, Defence Minister Stephen Smith blames industry for not meeting payment milestones. This seems to over simply the situation and it is worth noting that last financial year the Government only managed to give Second Pass approval to eight out of a scheduled 14 projects and only two out of more than 20 of those scheduled for First Pass. Clearly, the Government’s own processes are far from perfect. Delaying First and Second Pass approvals is denying the ADF equipment it needs, is hurting industry and will have the inevitable consequence of leading to a funding blow out in future years.

Furthermore, many platforms such as the Collins Class submarines and the Amphibious Ships are suffering because of restrictions to their maintenance budgets. This would seem to be an obvious area where money could be spent to great advantage.

Funding for current operations – principally Afghanistan – is just under $2 billion. It seems that the Government has moved away from a system for reimbursing the Department for the cost of deployments. The budget papers show that Defence will recruit an additional 1,000 personnel during the year – which might match the number of job losses in defence industry for the same period – but looking further forward the department says it will recruit 1,000 less people than originally planned. Why any growth in numbers is necessary is not explained, other than to comment that it is necessary to do so to meet the objectives of the Strategic Reform Programme.

The budget for the Defence Materiel Organisation is $11.5 billion, of which $6 billion is to purchase new equipment and over $5 billion for support and sustainment. Looking at acquisitions, the Top 30 Projects are:

Air to Air Refuelling Capability—AIR 5402

Prime Contractor: EADS CASA (Trading as Airbus Military - Spain).
This project is acquiring five new generation Airbus A330 Multi-Role Tanker Transport (MRTT) aircraft
- to be known as KC-30A in RAAF service. The acquisition also establishes the infrastructure necessary
to deliver services including engineering, maintenance, spares management, technical data, software
and training support for the new fleet.
Acceptance of the first two aircraft and associated support system elements is anticipated in June 2011,
over two years later than originally contracted. Initial Operational Capability (IOC) is expected to be
achieved by mid-2012 for a demonstrated air logistics (passenger and cargo) and pod (hose and drogue)
refuelling capability.
During 2011-12, delivery and acceptance of the third and fourth aircraft, conversion of the fifth and final
aircraft, and delivery and accreditation of the simulation training devices and training facility are
This project is being managed as a Project of Concern.

Bridging Air Combat Capability—AIR 5349 Phase 1

Prime Contractor: Boeing through a Foreign Military Sales (FMS) case with the United States (US) Navy.
This phase of the project will acquire 24 F/A-18F Block II Super Hornet multi-role aircraft and associated
support systems and services. This will ensure that Australia's air combat capability edge is maintained
through the transition to the F-35 Joint Strike Fighter during the coming decade.
A total of 15 aircraft have been delivered to RAAF Base Amberley since 26 March 2010, three aircraft
ahead of schedule. On 8 December 2010, the Super Hornet achieved its IOC.
The remaining nine aircraft will be delivered in two tranches in the first half of financial year 2011-12.
Residual deliveries of mission and support equipment will continue throughout 2011-12 and into 2012-
13, as well as a number of software updates required to deliver the Final Operational Capability (FOC),
scheduled for December 2012.

F/A-18 Hornet Upgrade—AIR 5376 Phase 2

Prime Contractor: The DMO is the prime systems integrator of elements provided by:
• Boeing (US) - for the avionics and electronic warfare self protection upgrade
• Boeing Defence Australia - for production installation of the electronic warfare self protection suite
of modifications
• Raytheon - for the Radar Warning Receiver
• The US Navy - for aircraft software integration and the acquisition of the radar warning receiver
• SAAB (Sweden) - for supplementary countermeasures dispensing systems
• Elta (Israel) - for active radio frequency electronic counter measures dispensing systems
• Elbit Systems Limited (Israel) - for Hornet Data Recorder.
This phase is progressively delivering a comprehensive capability upgrade to the RAAF's fleet of 71 Classic Hornets including an electronic warfare modification program comprising a replacement radar warning receiver, a supplementary countermeasures dispenser and electronic countermeasures
systems, and an enhanced data recording capability.
Key activities for 2011-12 include completing the final stages of acceptance and operational test and
evaluation, delivery of new countermeasures pods, and finalising the in-service support arrangements
for the electronic countermeasures system pods and upgrades to the previously acquired aircrew
training simulators required to align with Hornet aircraft capabilities being introduced in later phases.


C-17 Globemaster III—AIR 8000 Phase 3

Prime Contractor: Boeing through a FMS case with the US Air Force.
This Project provides a global heavy airlift capability based around four Boeing C-17 Globemaster III
aircraft and related provisions including an enhanced US-common electronic warfare self-protection
system. The four aircraft were delivered between December 2006 and March 2008 under Phase 3 of the
project. A fifth C-17will be delivered under Phase 4 of the project and is scheduled for delivery in August
2011. The C-17 fleet significantly enhances the ADF's ability to support national and international
operations and major disaster rescue and relief efforts.
The continued focus in 2011-12 will be on maturing C-17 sustainment requirements including spares,
and the procurement of ancillary items such as training devices, role expansion equipment and aircraft
self protection enhancements.

Airborne Surveillance for Land Operations—JP 129 Phase 2

Prime Contractor: AAI Corporation through a FMS case with the US Army.
This phase seeks to provide two RQ-7B Shadow 200 Tactical Unmanned Aerial Vehicle (TUAV) systems,
each comprising five air vehicles, two ground control stations, a tactical launch and recovery element,
and associated tactical support systems. The first TUAV will be delivered in 2011 with the second
planned to be delivered in early 2013.
During 2011-12 additional equipment for the first system will be delivered and the second TUAV system
hardware and associated support equipment and setting up an Australian based Shadow 200 training
capability is expected to be completed.
The key risks for JP129 Phase 2 relate to the early deployment of the first system by the end of 2011 and
include activities associated with training of Army personnel, establishment of logistics support
arrangements and airworthiness release. The risks are being managed through the project's inclusion on
the Project of Concern list.


Next Generation Satellite Communications System—JP 2008 Phase 4

Prime Contractor: Boeing through a FMS case with the US Government.
This phase of the project seeks to deliver high-priority components of the next generation satellite
communication system that has been supporting the ADF from 2008. There are currently three satellites
providing operational capability to Australia. The project addresses the ADF's wideband satellite
communications requirements by partnering on the US Wideband Global Satellite (WGS)
communication system program.
The project is currently participating in the design and delivery of a satellite remote control capability
in Australia, which is critical to the placement of a satellite. The US remains on track for production of
satellites four through six during the coming financial years and, given the project's positive track
record, the likelihood of successful launches is good.
During 2011-12 the key major activities planned include:
• establishment of the WGS control system in Australia
• completion of the detailed design for the WGS 6 launch rocket
• transition of WGS 4 into operational service
• transition of the Western and Eastern interim anchoring stations into operational service.

Battlespace Communications Systems (LAND)—JP 2072 Phase 1

Prime Contractors: Elbit Systems Limited, Harris Corporation and Raytheon Australia.
This phase of the project seeks to deliver commercial off-the-shelf and military off-the-shelf
communications systems that will provide capabilities to meet the high priority gaps identified in the
current Battlespace Communications System (LAND) (BCS(L)). In particular the project will acquire the
narrowband and wideband combat radio systems in support of the LAND 75/125 Battle Management
System (BMS) and the Battlefield Command and Support System (BCSS), and will provide the latest
generation of High Frequency radios.
Radios and ancillaries will be acquired through direct commercial sales with the Original Equipment
Manufacturers (OEM). Integration and installation of these systems into platforms (including vehicles
and soldiers) will be achieved under the Battle Group and Below Command, Control and
Communications Systems (BGC3) Contract with Elbit Systems Limited, as the system integrator. Initial
support arrangements will be delivered through radio OEMs and their Australian based
Deliverables for 2011-12 include completion of the BGC3 detailed design review, delivery of the core
radio systems to enable the tactical voice and data services for BGC3, and the establishment of training
and support facilities in Australia.
The highest risks for this project are platform systems integration and introduction into service
activities. Competition for space, weight and power in the vehicles is a challenge due to ever increasing
requirements to improve effectiveness and safety. The relative small size of the vehicles and increasing
numbers of radio transmitters and receivers makes minimising interference a priority.


Battle Management System—LAND 75 Phase 3.4

Prime Contractor: Elbit Systems Limited.
LAND 75 Phase 3.4 will deliver a vehicle-mounted, battle group level Battle Management System (BMS)
in support of Network Centric Warfare Roadmap milestones. This capability is to be delivered in
cooperation with JP 2072 Phase 1, which is delivering the combat radio system and LAND 125 Phase 3A,
which is delivering the dismounted BMS.
A contract for the Battle Group and Below Command, Control and Communications System (BGC3)
was signed with Elbit Systems Limited on 15 March 2010 following a world wide competitive tender.
IOC, to be delivered to an infantry company in 7 Brigade in Brisbane, is due in July 2011. FOC is planned
for April 2013.
The BGC3 is to be integrated into the Bushmaster Protected Mobility vehicle, the M113AS4 armoured
personnel carrier as well as the G-Wagon, Unimog and Mack logistic vehicles.
The combat radio system will provide upgraded communications for these vehicles, which will greatly
improve the amount of information available to land force commanders.
The major risk associated with LAND 75 Phase 3.4 is the development of approved vehicle installation
designs for the large number of platforms that the system is to be fitted to and the associated complex
design approval process. This risk is being managed through the use of the strategic materiel contracting
template that will generate all of the necessary information needed for design approval.

Ultra High Frequency Satellite Communications—JP 2008 Phase 5A

Prime Contractor: Intelsat LLC.
This phase of the project seeks to deliver an enhanced Ultra High Frequency (UHF) satellite
communications capability over the Indian Ocean region. Intelsat LLC has been contracted to include a
hosted UHF payload, owned by Defence, on the IS-22 commercial satellite. The IS-22 satellite will be
launched in mid-2012, providing commercial pay-TV and UHF data services.
The project will also upgrade the Australian network control system to handle the additional capacity
provided by the payload available to the ADF. Intelsat LLC will support the capability for 15 years
following in-orbit acceptance by Defence.
The highest risk for this project remains a satellite launch failure. However, due to the good track record
of the launch vehicles being used, the likelihood remains low. The design heritage of the payload, which
traces back to several highly successful UHF payloads, ensures that the technical risk also remains low.

Dismounted Battlegroup and Below Command, Control and Communication System—LAND 125 Phase 3A

Prime Contractor: Elbit Systems Limited.
LAND 125 Phase 3A is tightly coupled and aligned with LAND 75 Phase 3.4 and JP 2072 Phase 1 and
will deliver the dismounted components for the Battlegroup level BMS across a Brigade Group in
support of the Network Centric Warfare Roadmap Milestones.
This capability is designed to be carried upon the Dismounted Commander, with their supporting team
at the higher operational levels. The capability will provide unparalleled situational awareness,
common battle picture, improved data and voice communications and improved planning in the
operational, combat and individual domains through the delivery of enhanced information superiority.
Information superiority will support faster decision cycles, reduced risk of fratricide and enhanced
operational tempo from contact to completion.
A contract for the Battlegroup and Below Command, Control and Communications System (BGC3) was
signed with Elbit Systems Limited on 15 March 2010 following a world wide competitive tender. IOC
based on an infantry company in 7 Brigade in Brisbane, is due in July 2011. FOC is planned for April

Joint Command Support Environment—JP 2030 Phase 8

Prime Contractors:
• System Integrator Contractor: CSC Australia
• Capability Development Contactor: Lockheed Martin Australia
• Support Contractor: Lockheed Martin Australia.
JP 2030 Phase 8 is planned to be implemented in three separate sub-phases called 'Evolutions' that will
incrementally deliver capability elements. Evolution 1 was approved by Government in June 2009 and
provided for the accelerated acquisition of the Joint Planning Suite (JPS) and Joint Operations Portal
(JOP) capability. Contracts with the three prime contractors were signed in mid to late 2009.
Initial capability delivery of the Joint Command Support Environment Support (JCSE) system under
Evolution 1 was achieved in February 2010 with Release 1 of a three release program of the JOP and JPS
elements. Release 2 was implemented in August 2010 and Release 3 is planned for October 2011.
During 2011-12 the Evolution 2 business case will be progressed for consideration by Government
planned for the third quarter of 2011. Evolution 2 will add additional capability elements of a HQ Joint
Operations Command Preparedness Management Information System, improvements to Situational
Awareness, further enhancements to the JPS and provision of a Special Operations Combat Net Radio

New Air Defence Command and Control Systems for Control Units 2 & 3—AIR 5333

Prime Contractor: Boeing Defence Australia Limited.
Referred to as Project Vigilare, this project is replacing the Air Defence Command and Control System
with new systems at Northern Regional Operations Centre (NROC) (declared operational on 2
September 2010) and Eastern Regional Operations Centre (EROC) located at RAAF Bases Tindal and
Williamtown respectively. Outside the main contract with Boeing the project will also design and
deliver an integrated ADF Air Defence System communications network and integrate over 45 different
interfaces and sensors.
The Vigilare capability represents a highly networked command and control capability for the RAAF,
combining surveillance, airspace battle management and provision of the Recognised Air Picture (RAP)
to higher Defence headquarters. The RAP combines data and information from over 250 sources in near
real time. The Vigilare capability includes integrated full voice and data communications across all
security domains and a sophisticated implementation of tactical data links, including Link-11 and
The major activities for 2011-12 will be the completion of operational test and conditional acceptance
activities at EROC.
Project Vigilare is being managed as a Project of Concern.

Follow-On Stand Off Weapon—AIR 5418 Phase 1

Prime Contractors: Lockheed Martin under both a direct commercial contract and through a FMS case
with the US Air Force.
This phase is acquiring the AGM-158 Joint Air-to-Surface Standoff Missile (JASSM) and integrating it
with the F/A-18A/B Hornet to improve weapon terminal effectiveness against well defended targets.
The US Navy has now completed and certified the F/A-18 A/B operational flight program software to
utilise JASSM. A successful live JASSM firing was conducted in the US from an Australian F/A-18A/B
aircraft on 3 December 2010, a significant milestone in the integration program.
The project is working towards achieving IOC by December 2011 and FOC in 2012. This reflects a slip
in IOC of 12 months due to F/A-18A/B integration and Woomera test delays. The primary risk to
achieving IOC is the successful completion of the planned end-to-end operational test and evaluation at
Woomera in 2011. Air Force, Capability Development Group, DSTO, US Air Force, Lockheed Martin
and DMO are working together to manage the tasks and milestones required in the lead up to this event.
AIR5418 Phase 1 is being managed as a Project of Concern.


Lightweight Torpedo Replacement —JP 2070 Phase 3


Prime Contractor: Eurotorp, Thales.
The scope of JP2070 Phase 3 includes the establishment of an Australian manufacturing and support
capability for the Eurotorp MU90 lightweight torpedo and delivery of sufficient quantities of MU90
lightweight torpedoes to meet war reserve requirements.
Significant activities planned for 2011-12 include the completion of MU90 MK I deliveries and the
commencement of MU90 MK II deliveries.
The major risks for JP2070 Phase 3 are the successful transfer of MU90 MK II supplier skills and technical
knowledge to Australian industry and delays to production schedule through the diversion of resources
from assembly of war shot torpedoes to support Phase 2 test and evaluation work. The skills and
knowledge transfer risk is being mitigated through close liaison with the contractor and the
international MU90 user community and the contractor resource risk is being mitigated through careful
planning of the MU90 test and evaluation programme.
JP2070 Phase 3 is being managed as a Project of Concern.


Bridging Air Combat Capability—AIR 5349 Phase 2

Prime Contractor: through a FMS case with the US Government.
AIR 5349 Phase 2 is acquiring and introducing into service a number of new weapons and
countermeasures under the Australian Super Hornet program. These weapons will significantly
enhance the ADF's ability to conduct air, land and maritime strike.
Delivery of AIM-9X Air-to-Air missiles, AGM-154 Joint Stand Off Weapons (JSOW) and infrared
counter measures occurred in January 2010 and additional stocks of AGM-154 JSOW and AIM-120
Advanced Medium Range Air to Air Missiles (AMRAAM) are programmed for delivery in 2013 and
US Navy flight testing of the additional AGM-154 JSOW will be undertaken in 2011-12 and any delay to
this test program will place the delivery schedule at risk.

Multi Role Helicopter (MRH)—AIR 9000 Phase

Prime Contractor: Australian Aerospace.
This project is acquiring 46 MRH-90 helicopters for the Army and Navy (with a nominal split of 40 for
Army and six for Navy). Thirteen aircraft have been accepted so far. The support systems will include
an electronic warfare self-protection support system, a ground mission management system, a software
support centre, an instrumented system with telemetry capable of being installed into three instrument-
capable aircraft, two full flight and mission simulators and facilities infrastructure at Townsville, Oakey,
Brisbane and Nowra.
The MRH-90 flying rate of effort has been less than planned, leading to significant delays in aircrew
training and certification. To address this, the DMO will work with industry in 2011-12 to improve the
immature support system, aircraft systems reliability, and contractual arrangements.
The objectives for 2011-12 will be to recommence accepting aircraft subject to satisfactory resolution of
deficiencies identified with the aircraft, continue to mature the MRH support arrangements and attain
an Australian Military Type Certification and Service Release in order to achieve the IOC (Navy) and
replace the Sea King capability.

Armed Reconnaissance Helicopter—AIR 87 Phase 2

Prime Contractor: Australian Aerospace
This phase of the project will acquire an Armed Reconnaissance Helicopter (ARH) System for the Army.
The system will consist of 22 helicopters, an ARH software support capability, an electronic warfare
mission support system, ground mission equipment, facilities, a training system and training devices
including full flight and mission simulators.
The re-baselined schedule to deliver the initial operational capability to Army was achieved in
September 2009, 27 months later than originally contracted due to delays in training that resulted from
delays in the Franco-German program, poor support arrangements and slow delivery of spares. All 22
ARHs are contracted for delivery by end July 2011, with FOC expected by December 2012.
The objectives for 2011-12 are to complete acceptance of all ARH and associated supplies, continue to
mature the support arrangements and improve ARH availability rates, and achieve a deployable
capability. The key risks to the program are linked to delivery of remaining aircraft, resolution of the
technical issues associated with the helmet mounted sight and display and maturing the logistics
support system.


ADF Deployable Logistics Systems—JP 2077 Phase 2B.2

Prime Contractor: Mincom
The objective for JP 2077 Ph 2B.2 is to build on the core transactional element of the Military Integrated
Logistics Information System (MILIS) delivered in JP2077 Phase 2B.1 and close the most critical logistics
capability gaps. The project will deliver a Deployable Logistics System (DLS) and Integrated In-Transit
Visibility system (IITV).
Mincom, a Brisbane based company, is the prime vendor for the core DLS and IITV. Currently Mincom
is contracted for Solution Design only. The contract for build and delivery is expected to be established
with Mincom in the first quarter 2011-12.
The focus for 2011-12 will be on the completion of the Solution Design stage and commencement of the
Build and Delivery stage.
The main risk for 2011-12 is that the overall project cost will increase, requiring access to contingency.
This is due to a delay in commencement resulting from JP2077 Phase 2B.1, increase in solution
complexity and changes in the system accreditation and regulatory framework compliance.


Field Vehicles and Trailers—LAND 121 Phase 3

Prime Contractors:
• Light/Lightweight Vehicle Capability: Mercedes-Benz Australia-Pacific
• Light/Lightweight Trailer Capability: Haulmark Trailers Australia
• Medium Heavy Vehicle Capability: Not yet selected
• Medium Heavy Trailer Capability: Haulmark Trailers Australia
• Additional Bushmaster vehicles: Thales Australia.
Project Overlander is a multi-phased project to deliver the ADF's future field vehicle (including modules
as a component of the vehicle) and trailers. Under Phase 3 Defence plans to acquire:
• 1,200 unprotected lightweight/light Mercedes G-Wagon vehicles comprising six vehicle variants
and specialist modules
• 973 lightweight/light trailers
• 293 Bushmaster protected mobility vehicles (reported under LAND 116) plus 184 trailers
• protected and unprotected medium/heavy vehicles, specialist modules and trailers.
Light/lightweight capability: Key activities for 2011-12 will be the continued receipt and delivery of
production vehicles into service, refinement of the through-life support capability and the continued
training of vehicle operators and maintenance personnel. Prototypes trailers will be received mid 2011,
with production scheduled to commence in late 2011 and the trailers due to enter into service in June
Medium/heavy capability: Vehicle capability (including modules) will be provided in an array of
variants in both protected and unprotected configurations, including semi trailers, tow trucks,
integrated load handling systems and flatbeds. In December 2010 the evaluation of tender responses
from three down-selected companies - Rheinmetall MAN, Mercedes Benz Australia Pacific, and Thales
Australia - was completed. Source selection is being finalised for Government consideration by mid
year and contract signature in 2011-12. Negotiations for the medium/heavy trailer will commence with
Haulmark Trailers Australia after signature of the medium/heavy vehicle contract. Contract signature
for the medium/heavy trailers is scheduled for the first quarter of 2013.
LAND 121 Phase 3 Medium/Heavy Capability component is being managed as a Project of Concern

Artillery Replacement 155mm Howitzer—LAND 17 Phase 1A

Prime Contractor: through several US Government FMS cases.
This will deliver 35 M777A2 Lightweight 155mm Towed Howitzers, a Battle Management System - Fires
Command and Control system, and course correcting fuzes. It has an In-Service Date of mid-2011, with
FOC scheduled for achievement in 2013.
The first howitzer was delivered in August 2010 and another 12 howitzers are expected to be delivered
by mid-2011, with the remaining 20 howitzers scheduled for delivery by March 2012.
The first delivery of battle management system software is planned to occur in May 2011. This version
will be used for engineering and training development purposes. Operator training will commence in
September 2011. The radios required to establish the communications infrastructure for the digitised,
networked battle management system are currently planned for delivery in the May / June 2011

Upgrade of M 113 Armoured Vehicles—LAND 106

Prime Contractor: BAE Systems Australia Defence
This project is upgrading the Army's M113 A1 vehicles to improve protection, lethality, mobility and
habitability. The upgrade replaces most of the vehicle, retaining only the hull, hatches, rear door and
communications systems. In addition to the 350 vehicles for the initial requirement, 81 additional
vehicles are being purchased to support the Army's Enhanced Land Force (ELF) initiative. In August
2009 a contract change was approved to stretch the only un-stretched variant, the armoured mortar.
Designs for the first six variants (personnel, fitters, recovery, command, ambulance and logistics) were
completed between 2007 and 2010. Design of the mortar variant is scheduled for completion in
November 2011. Construction of an Initial Production Vehicle was completed in December 2010 and this
prototype has entered the Design Test & Evaluation phase. Defence is working with the contractor to
develop an approved repair method ahead of commencement of the hull conversions scheduled for
early 2012.

Counter Rocket Artillery and Mortar (C-RAM)—LAND 19 Phase 7A

Prime Contractors: Saab AB of Sweden and through a US Government FMS case.
The C-RAM project is delivering a system that warns friendly forces of incoming enemy rocket, artillery
and mortar attacks in time for them to take defensive positions and increase their chance of survival.
The delivered system consists of radars, laptop computers, sirens and strobe lights. When networked,
this system can detect enemy rocket, artillery and mortar attacks before the projectiles from these attacks
land near friendly troops.
Contracts were signed with Saab in 2010 to deliver Giraffe radar systems. A US Government FMS
program was also established in 2010 to deliver Lightweight Counter Mortar Radars and all of the
networking equipment, sirens and strobe lights. The US Government signed contracts with a range of
contractors to deliver their equipment, the main contractor being Northrop Grumman.
In late 2010 the first deployment of equipment was delivered and installed in Afghanistan to Australia's
main operating base.


Bushmaster Protected Mobility Vehicle—LAND 116 Phase 3

Prime Contractor: Thales Australia.
This phase of the project, referred to as Project Bushranger, is acquiring 737 vehicles in seven variants
(troop, command, mortar, assault pioneer, direct fire weapon, ambulance and Air Defence). The vehicles
will provide protected land mobility to Army combat units and Air Force Airfield Defence Guards. All
300 troop, command, assault pioneer, mortar, direct fire weapon and ambulance variants under the
original acquisition contract have been delivered. Delivery of 144 ELF vehicles was completed in April
The prime focus of the project for 2011-12 is the completion of the delivery of 293 Bushmaster vehicles
by June 2012 to satisfy Production Period 3 (Project LAND 121) requirements. The project will also
determine the most appropriate way to meet the requirement for the provision of up to 184 protected
mobility vehicle compatible trailers, which are also part of Production Period 3.
Key risks are that achievement of the Detailed Design for the External Composite Armour solution will
be delayed due to completion of design, development and verification activities; and further that the
Protected Mobility Vehicle may not be certifiable for sustained towing, which has the potential to impact
on the requirement to procure a trailer.


Australian Light Armoured Vehicle - Additional—LAND 112 Phase 3

Prime Contractor: General Dynamics Land Systems - Canada (GDLS-C)
The LAND 112 Phase 3 project acquired 144 additional ASLAVs, 59 remote weapon stations capability,
nine Crew Procedural Trainers and conducted an automotive standardisation program for the Phase 2
vehicle. The project is currently acquiring Multi Spectral Surveillance Suites for integration on the
ASLAV through the ASLAV Surveillance Project. Minor facility upgrades in the three units that operate
the ASLAV fleet are also occurring.
The ASLAV Surveillance Project will provide an integrated sensor-based surveillance capability for
ASLAV Surveillance variants operated in the Australian Army's Cavalry units. The Multi Spectral
Surveillance Suites is a mast mounted radar and electro-optic surveillance system to be fully integrated
on the ASLAV-Surveillance variant. The Contractor for the delivery and integration of the Multi Spectral
Surveillance Suites is DRS Sustainment Systems, Inc-a United States based company. The Project
consists of three stages; Stage 1 Prototype development, Stage 2 Production and Stage 3 Through Life
Support (TLS). Stage 1 is complete and the Project is currently in Stage 2 for the production, testing and
delivery of 18 Multi Spectral Surveillance Suites units.


Standard Missile Replacement (SM-1)—SEA 1390 Phase 4B

Prime Contractor: through a US Government FMS case and various commercial contracts - Lockheed
Martin-US, AAI Corporation, BAE Systems-US and Thales Australia.
This project upgrades four Adelaide Class Frigates with the SM-2 Surface-to-Air Mid Course Guidance
mode missile capability, to acquire the weapons, and to provide missile technician training.
The planned 2011-12 outcome is the conduct of acceptance testing and evaluation of the SM-2 Stage 2
Mid-Course Guidance system to verify and enable configuration and installation of this capability in the
Adelaide Class frigates.
The highest risks for this project include the availability of ships for installation and test, and the risk
inherent with interfacing this new technology into the existing ships. Schedule risk is mitigated by
collaborative monitoring of the ships' schedules for maintenance availabilities with Navy.


Anzac Ship Anti-Ship Missile Defence—SEA 1448 Phase 2B

Prime Contractor: CEA Technologies Proprietary Limited and the Anzac Ship Integrated Material
Support Program Alliance (comprising the DMO, Saab Technologies Australia and BAE Systems).
This project is to deliver a phased array radar system to the Anzac Class Frigate for target indication/
tracking and mid-course guidance and target illumination for the Evolved Sea Sparrow Missile in
conjunction with other sensor and combat management system upgrades delivered under SEA 1448
Phase 2A.
The focus for 2011-12 includes at-sea testing and acceptance into initial operational service of the Anti
Ship Missile Defence Upgrade in the lead ship HMAS Perth is scheduled to complete in July 2011. Based
on successful acceptance into initial operational service by Navy, Defence is to seek approval from
Government for installation of the capability in the remainder of the Anzac Class ships under a program
commencing in early 2012.
The highest risk for the project relates to the development of this leading-edge radar technology.
Achievement of phased array radar performance and understanding of inter-system interference effects
in the complex electromagnetic environment of the ship continues to be measured in at-sea testing.
Testing to date continues to provide confidence thereby mitigating this risk, which continues to be
managed by a comprehensive regime of test and evaluation. The project is being managed as a Project
of Concern.

Air Warfare Destroyer Build—SEA 4000 Phase 3

Prime Contractor: The AWD Alliance (comprising the DMO, ASC AWD Shipbuilder Proprietary
Limited and Raytheon Australia Proprietary Limited).
The Commonwealth also has a platform system design contract with Navantia, SA (Spain), and the
Aegis Combat System is being supplied through a US Navy FMS program.
The AWD project is progressing within budget, but has experienced schedule problems by
subcontractor BAE Systems with early hull block production. The AWD Alliance's operational schedule
for the project includes some schedule float, but detailed analysis is now required by the AWD Alliance
to determine the impact of these subcontractor delays on ship delivery milestones.
There has been good progress on the acquisition and integration of the Aegis Combat System equipment
and the adaptation of the US Navy Aegis computer program for the AWDs. Progress on the
development and testing of the AWD Australian Tactical Interface (ATI) has also been good. ATI
integrates the core Aegis system with Australian-selected sub-systems such as sonar, infrared search
and track, and very short range defence.
Major milestones in 2011-2012 include the delivery of hull blocks to Adelaide from BAE Systems in
Melbourne and Forgacs in Newcastle, consolidation of hull blocks and laying of the keel for HMAS
Hobart in Adelaide, and a substantial increase in combat system equipment delivery.
Areas of risk and opportunity for the project in 2011-12 include achieving peak hull production capacity,
recruiting and training people to meet this peak workforce demand, successful delivery of hull blocks
to Adelaide, maintaining a safe workplace as shipyard production increases, and stabilising workflow
in order to achieve maximum shipbuilding productivity.


Amphibious Deployment and Sustainment—JP 2048 Phase 4A/4B

Prime Contractor: BAE Systems Australia Defence.
The JP 2048 Phase 4 A/4B project is acquiring two Canberra Class 27,000-tonne Amphibious Ships
referred to as Landing Helicopter Dock (LHD). This project is one of a number of projects grouped under
the Amphibious Deployment and Sustainment (ADAS) Program and designed to replace and enhance
Navy's amphibious and afloat support capability. Phase 3 of the Program will acquire watercraft to act
as ship to shore connectors to land personnel, vehicles and equipment from the LHDs.
The Government announced on 20 June 2007 that Tenix Defence (now BAE Systems Australia Defence),
offering a design by the Spanish company Navantia, had been selected as the preferred tenderer for
delivery of the LHD.
The first LHD (LHD01) keel laying occurred on 23 September 2009. LHD01's hull was launched on 17
February 2011 and is undergoing internal fit-out. This activity is expected to be completed by June 2012,
after which the LHD01 hull will commence its journey to Australia. The second LHD (LHD02) keel was laid on 18 February 2011. Progress of erection of LHD02 hull is well advanced with 10 per cent of the
hull erected on the slipway at the end of March 2011.
Over 2011-12 the superstructures of both LHDs will be constructed, fitted out and integrated with the
hulls by BAE Systems Australia Defence at its Williamstown dockyard in Melbourne. L3
Communications is subcontracted to BAE Systems Australia Defence to supply the communications
system and Saab Systems Australia to provide the combat system and integrate the combat management
Schedule risks include the ability of the contractor to attract sufficient personnel to meet the resource
profile, and the extensive work needed to set up in-service support arrangements and to assist Navy to
prepare to operate the capability.


Airborne Early Warning and Control Aircraft—AIR 5077 Phase 3

Prime Contractor: Boeing.
This phase, referred to as Project Wedgetail, will provide Defence with an Airborne Early Warning and
Control (AEW&C) capability comprising the provision of six aircraft and associated supplies and
Project Wedgetail is being managed as a Project of Concern due to significant schedule slippage and
technical risks encountered with this project. While Boeing had planned to deliver the first aircraft in a
final operating configuration in December 2010, this milestone was not met due to ongoing issues with
subsystem technical maturity and integrated system stability. Boeing and the Commonwealth
conducted negotiations to redefine the path to final acceptance and reached agreement in March 2011.
Acceptance of the next increment of aircraft capability is now planned for June 2011, with final
acceptance of all aircraft hardware components of the system by the end of 2011 and final acceptance of
all remaining aircraft software components in March 2012. Acceptance of the first fully configured
aircraft in March 2012 will represent a 64 month delay against the original contract baseline.
Incremental delivery of the associated ground support systems and supplies, which commenced in
April 2010, will now be completed by March 2012. While planned for February 2011, construction of the
main AEW&C facility at RAAF Base Tindal was completed in April 2011. The overall risk rating for the
project remains high due to risks associated with integrated system maturity (notably electronic support
measures technical maturity), ongoing software development, and completion of the test and evaluation
program. These risks continue to be actively managed through close interaction between the
Commonwealth and the contractor and the implementation of the incremental delivery and acceptance

Joint Strike Fighter Aircraft - AIR 6000 Phase 2A/2B

Prime Contractor: Lockheed Martin is contracted to the US Government for the development and
production of the Joint Strike Fighter (JSF). Australia will procure the aircraft through a government to
government co-operative agreement.
On 25 November 2009 the Australian Government announced second pass approval of Stage 1 of Phase
2A/B of the New Air Combat Capability (NACC) project, comprising acquisition of Australia's first 14
Conventional Take-Off and Landing F-35 JSF aircraft and the infrastructure and support required for
initial training and testing, with delivery commencing in 2014.
On current plans Australia's first 10 JSF will remain in the US for a number of years for initial conversion
training of Australian pilots and maintainers and also participation in operational test activities. The
next four JSF are planned to arrive in Australia in 2017.
During 2011-12 the project anticipates completion of the contracting activities through the US
Government to Lockheed Martin for the acquisition of the first two JSF aircraft and associated support
systems. These aircraft will be delivered to the US international training centre in 2014 to allow the ADF
pilot training to commence.

Following a Technical Baseline Review in late 2010 the US JSF Program is now undergoing an Integrated
Baseline Review focused on cost and schedule. The outcomes of the review and the revised US JSF
Program plan are not expected to be known until mid 2011. Whilst cost increases and schedule delays
are anticipated, the NACC project considers current approved cost and schedule contingency adequate,
however the diminishing buffers are of considerable concern and are being closely monitored. Together
with partner countries, Australia is actively managing contractor performance with concerns on cost
and schedule and overall program affordability.


APDR at a glance