Another player joins the field of maritime communications

The Defence tender evaluation process often throws up seemingly inconsistent decisions and the one that currently has the maritime world in a buzz is SEA 1442 Phase 4.

4th Oct 2012


 SEA 1442 Phase 4


 Another player joins the field of maritime communications

Byline: Kym Bergmann / Canberra


The Defence tender evaluation process often throws up seemingly inconsistent decisions and the one that currently has the maritime world in a buzz is SEA 1442 Phase 4. APDR broke the story online early in September that the contract to upgrade the communications of the RAN’s eight ANZAC frigates will be awarded to the Selex Elsag team. With a nominated value of between $300 and $500 million (at the lower end of the band, according to the DCP), this is a substantial amount of business. The surprise in all of this is that Elsag has been selected ahead of the incumbent: Thales Australia.

Thales must be smarting, though they have declined to comment. The company must have felt that they were in a strong position because under Phase 3 of the project their system introducing a Maritime Tactical Wide Area Network (MTWAN), network management, and replacement message handling system software was selected against some tough competition. According to Defence, the Thales solution is operational at Defence Communications Station – Sydney and in HMA Ships NEWCASTLE, MELBOURNE, WARRAMUNGA, SYDNEY, SUCCESS, PERTH, ANZAC, TOOWOOMBA, CHOULES, and DARWIN.

Even though the scope of Phase 4 is more ambitious, it does build on Phase 3. And it is not as if Thales had done a bad job. In 2008, the flowing award was announced:

Team of the Year Certificate in the Major Acquisition Category:
• Thales Australia and the DMO's SEA 1442 Phase 3 Project Team

So even though they were the incumbent and apparently doing a fantastic job – along with DMO itself – they have now been shown the door.

None of the above is any reflection on Selex Elsag and their strong local team – especially with the inclusion of communications specialist CDM. Elsag is part of the Italian Finmeccanica group and is a substantial player in the field of military communications. For example, a quick glimpse at their website shows awards of contracts to Israel with a value of US $850 million on the back of the selection of Alenia Aermacchi – another part of Finmeccanica – for trainer aircraft and another announcing their involvement in a major NATO ground surveillance activity.

The point of this is not that there is anything wrong with Elsag – there clearly isn’t – but rather why is Defence introducing another player into the already crowded Australian maritime communications marketplace?

But this already strange story becomes even stranger when we examine the issue of timing. APDR has previously commented on the even higher level of official paranoia about this project than has sadly become the norm. At one point the Department would not even reveal how many bids had been received – citing “commercial confidentiality”. As if anything could be even remotely compromised by the release of such basic information about a taxpayer funded activity. So we were surprised and gratified when the Department actually confirmed that source selection had taken place on August 28 and that the tenderers – though not how many of them - have been notified. The Department also drew our attention to the slippage in the DCP of second pass approval.

It seems that even though a selection has been made, Government approval will not be until 2013 / 14 or even 2014 / 15 – so potentially work will start three years from now, with the Department estimating that contract negotiations will take an additional two to three months.


But there is more. The ANZAC frigates are all being progressively upgraded to the ANZAC ASMD configuration under SEA 1448, with the second ship now in dock. To a logical person it would seem sensible to do the communications upgrade work at the same time. BAE Systems – the same company that partnered with Selex Elsag for SEA 1442 Phase 4 installation - are pulling the ANZACs apart one at a time at Henderson in Western Australia. However, in their cost-saving wisdom, the Department will have to bring the ships back in later for a separate upgrade.

As a senior industry figure put it succinctly:

“It looks like Defence is saving a dollar now only to spend three dollars later”.

The decisions surrounding SEA 1442 Phase 4 seem symptomatic of a wider problem of a lack of coordination and consistency in the Defence acquisition process.
 

APDR at a glance