Minister for Defence Stephen Smith and Minister for Defence Materiel Jason Clare today updated the Projects of Concern list.
The Airborne Early Warning & Control (AEW&C) Wedgetail Aircraft Project and the Lightweight Torpedo Project have been removed from the Projects of Concern list and the Mulwala Redevelopment Project and the Direct Fire Support Weapon Project have been added to the list.
The two projects removed together represent a combined value of $4.5 billion, bringing the total value of projects removed from the list to over $14 billion since the Projects of Concern process was created in 2008.
The Projects of Concern process was established by the Government to focus the attention of the highest levels of Government, Defence and Industry on remediating problem projects.
Since the Projects of Concern process was established, 21 projects have been put on the list. Fifteen have since been removed – 13 due to remediation and two due to cancellation.
In June 2011, Mr Smith and Mr Clare announced reforms to strengthen the Projects of Concern process, including:
- The establishment of a more formal process for adding projects to the list;
- The establishment of a formal process for removing projects from the list;
- The development of agreed remediation plans, including formal milestones for the removal of a project from the list;
- Increased Ministerial involvement and oversight of the process; and
- Incentives for companies to fix projects on the list by taking into account the performance of companies in addressing Projects of Concern when evaluating their tenders for other projects.
Airborne Early Warning & Control (AEW&C) Wedgetail Aircraft
Wedgetail was approved in 2000 with a budget of $3.8 billion (in today’s dollars) to procure six 737-700 commercial aircraft which were then fitted with an advanced multi-role electronically scanned radar and 10 mission crew consoles.
The project was listed as a Project of Concern in January 2008 due to schedule delays and increasing complexity of the technical development of the project.
A formal remediation plan was agreed to in 2011, with a number of key objectives identified, including the achievement of Initial Operating Capability ( IOC).
IOC was declared by the Chief of Air Force last month and the project has now delivered all six aircraft.
Following the declaration of IOC, the Chief Executive Officer of the Defence Materiel Organisation has recommended the removal of this project from the Projects of Concern list.
The Government has agreed to this recommendation.
Joint Project 2070 (Lightweight Torpedo)
JP 2070 was approved to acquire the MU90 Anti-submarine Lightweight Torpedo to replace the existing MK46 torpedo, and integrate it with the ANZAC and ADELAIDE Class frigates.
JP 2070 was added to the Projects of Concern list in 2008 due to delay in weapons testing, integration challenges and emerging cost risks.
A formal remediation plan was agreed to in 2011, with a number of key objectives identified, including the achievement of Initial Operating Capability (IOC).
Following the declaration of IOC by Chief of Navy last month, the Chief Executive Officer of the Defence Materiel Organisation has recommended the removal of this project from the Projects of Concern list.
The Government has agreed to this recommendation.
JP 2086 Ph 1 (Mulwala Redevelopment Project)
JP 2086 was approved in 2006 to deliver a propellant manufacturing facility in Mulwala, NSW to replace the existing facility.
Last year technical and equipment issues during the commissioning phase resulted in a significant delay. A comprehensive Gate Review recommended the project not be added to the Projects of Concern list pending a status review in late 2012.
Since that Gate Review JP 2086 has fallen further behind schedule and there is an increasing risk that the current budget will not be enough to complete the project.
Based on the importance of this national capability project, the Chief Executive Officer of the Defence Materiel Organisation has recommended the project be listed as a Project of Concern.
The Government has agreed to this recommendation.
Land 40 Ph 2 (Direct Fire Support Weapons)
Land 40 Ph 2 was established in 2006 to provide weapons with specific range and target effects to improve Defence’s close combat capability. This included an advanced version of the M3 Carl Gustav and a new Light Weight Automatic Grenade Launcher.
While the M3 Carl Gustav has been successfully procured, the Light Weight Automatic Grenade Launcher was rejected due to non-conformances identified during contract negotiations.
Initial Operating Capability for the Light Weight Automatic Grenade Launcher has now slipped by almost five years.
Due to the troubled commercial history of this project the Chief Executive Officer of the Defence Materiel Organisation has recommended Land 40 Ph 2 be listed as a Project of Concern.
The Government has agreed to this recommendation.
A summary of the current Projects of Concern list is below:
|
Project
|
Description
|
Date
Added
|
|
CN10
|
Collins Class
Submarines
|
Nov 2008
|
|
AIR5402
|
Multi-role
Tanker Transport aircraft – Air to Air Refuelling Capability
|
Oct 2010
|
|
AIR5276/8B
|
Electronic
Support Measures upgrade for AP-3C Orion aircraft
|
Oct 2010
|
|
AIR9000/2,4&6
|
Multi-Role
Helicopter
|
Nov 2011
|
|
JP2086 Ph 1
|
Mulwala
Redevelopment Project
|
Dec 2012
|
|
Land 40 Ph 2
|
Direct Fire
Support Weapons
|
Dec 2012
|
Projects
removed from Projects of Concern list:
|
Project
|
Description
|
Date
Removed
|
|
SEA1411
|
Sea Sprite
Helicopter (Project cancelled)
|
Mar 2008
|
|
AIR87
|
Armed
Reconnaissance Helicopter (Remediated)
|
Apr 2008
|
|
LAND106
|
M-113 Armoured
Personnel Carrier Upgrade (Remediated)
|
May 2008
|
|
JP2088/1A
|
SF Air Drop
Rigid Hull Inflatable Boat Trailers (Remediated)
|
Sep 2009
|
|
SEA1390/2.1
|
Guided Missile
FFG Upgrade (Remediated)
|
Jan 2010
|
|
AIR5416/2
|
Project
‘Echidna’ (Scope reduced)
|
Jul 2010
|
|
JP2048/1A
|
LCM2000
Watercraft for Amphibious Ships (Project cancelled)
|
Feb 2011
|
|
JP2043/3A
|
High Frequency
Communications Modernisation (Remediated)
|
Jun 2011
|
|
AIR5333
|
Air Defence
Command and Control System ‘Vigilare’(Remediated)
|
Jun 2011
|
|
SEA1448/2B
|
ANZAC-class
Anti-Ship Missile Defence (ASMD) (Remediated)
|
Nov 2011
|
|
LAND121/3B
|
Medium and heavy
vehicles, trailers and modules(Remediated)
|
Dec 2011
|
|
JP129/2
|
Tactical
Unmanned Aerial Vehicles (Remediated)
|
Dec 2011
|
|
AIR5418/1
|
Joint
Air-to-Surface Standoff Missile (JASSM) (Remediated)
|
Dec 2011
|
|
Air 5077/3
|
Wedgetail
Airborne Early Warning and Control Aircraft (Remediated)
|
Dec 2012
|
|
JP 2070/2&3
|
Lightweight
torpedo replacement (Remediated)
|
Dec 2012
|
AUS DoD