Katherine Ziesing | Canberra
News that government has opted for a single supplier limited request for tender (RFT) to Raytheon earlier this week caused much consternation amongst industry.
The program had seen multiple requests for interest (RFIs) over the preceding decade but the most recent in 2015 saw over a dozen firms respond in part or in full.
“We went through an exhaustive process, drawing on both RFI material and our own research to come to this conclusion,” Kim Gillis Deputy Secretary CASG told ADM. “It just made sense in this case. We do not want to waste industry’s time and money with a stalking horse competition when the answer for Australia’s requirements was clear.”
“I believe we’ve acted ethically and in line with the Smart Buyer principles”
Both Defence Industry Minister Christopher Pyne and Gillis have been open from the beginning that Smart Buyer will mean changes for how Defence does business. That taking unnecessary time and money to come to an answer that did not need two years, millions of industry bidding dollars and man-hours to match was inefficient.
Gillis stressed to ADM that this is a rare case of the Smart Buyer application in regard to Land 19 Phase 7B; four levels of testing and approvals came to the same conclusion that was presented to Government on the way forward.
“There are parts of industry that will not be happy with this outcome but I believe we’ve acted ethically and in line with the Smart Buyer principles,” Gillis said.
NASAMS is now in service with the US National Guard and Spain and Norway have decided to move to the already upgraded NASAMS 2 technology. Other operators include Chile, The Netherlands, and Finland while Lithuania ordered the system last year.
Lithuania has agreed to buy NASAMS from Norway, with the Lithuanian Ministry of National Defence (MND) looking to purchase two batteries of the air-defence system for around €100 million (US$109 million).
Each NASAMS launcher includes six AIM-120s that are mounted in containers onto a truck-mobile pedestal mount, although a four-round high mobility launcher featuring exposed missiles is also available. Normally a NASAMS fire unit includes between two and four launchers, a Thales/Raytheon Systems AN/MPQ-64F1 Sentinel radar, and a fire distribution centre. According to the MND, the systems are to be delivered in 2020.
Even with integrating a ground based CEA radar and Hawkei integration, the $1-2 billion budget is high. This Integrated Investment Plan figure fails to explain what that figure includes.
When announcing the decision, Minister Pyne said a Risk Mitigation Contract between now and 2019 would make sure that Australian industry is given the best chance to participate before the final decisions goes to government. The ‘de rigeur’ industry roadshow trail will begin shortly ADM understands.
ADM Comment: For so long Defence has been telling industry that business as usual is changing and I’m not sure many believed it until this week. Government and CASG are marking a clear line in the sand when it comes to how business is conducted; if there is an obvious answer or decision, make it. In this case, many would argue that there are many technologies on the market that could grow to meet the need. But all would have developmental elements, a risk that government seems unwilling to take at this point.
As to how this process will affect Air 6500 remains to be seen. Raytheon is one of the four primes being briefed on the program alongside Boeing, Lockheed Martin and Northrop Grumman. Does this decision give Raytheon the inside track in that program?
Arguably, this piece of the integrated air missile defence (IAMD) puzzle is larger and more complex than Land 19 Phase 7B. A new Sir Richard Williams Foundation report on the issue details exactly how complex this program will be and that the thinking behind the project and wider IAMD program will require ADF-wide thinking and design. Air 6500 touches an estimated 40 other projects so managing this complexity will not be easy.
Smart Buyer will have to be more than a set of processes, it will have to be a cultural change at every level of the ADF, uniformed and APS, if such complexity is to be exploited for its opportunities.