News last week that the Risk Mitigation Activity (RMA) for Phase 2 of Land 400 will be re-examined is a mixed blessing. This is a chance for Australian Industry content to be maximised but it comes at the cost of schedule.
“A significant part of the RMA is to develop the Australian Industry Capability Plan,” according to the statement. “As the Land 400 RMA was planned prior to the launch of the new Industry Policy, Defence has determined that it would be prudent to review the RMA, to ensure it aligns with the new policy and achieves the best possible outcomes for Australian industry.”
The fact that no Australian Industry Capability (AIC) level was mandated from the get go is the big issue here. After the issues that Phase 3B of Land 121 had in this space, one would have hoped that Defence had learned a lesson.
As it stands, the contenders that hope to take part in the RMA are preparing three vehicles for the program. Preparing three vehicles from either a hot production line somewhere internationally or borrowing them from an in service military customer is not an easy or cheap activity. ADM was unable to confirm how many contenders would take part in the RMA with the program office not willing to say if two or three companies were in the running.
The RMA timeframe is not that forgiving either. In response to questions about the RMA back in the first week of March 2016, Defence Media Ops provided the following information:
“Tenderer(s) are required to deliver two vehicles to the Monegeetta Proving Ground no later than 11 weeks after the contract signature.
“The third vehicle (the Integration Vehicle) will remain in the control of the Tenderer and will be used for the Government Furnished Materiel integration demonstrations, currently scheduled to occur at the Puckapunyal Military Area 10-11 months after RMA contract signature. The Integration Vehicle may also be used for other activities subject to negotiation.”
|
|
Payment Item |
Quantity |
Amount (inclusive of GST) |
Timing of Claims for Payment |
Notes |
|
1 |
RMA Commencement |
1 |
$4.8 million |
The 1st of the month following commencement of the RMA Contract |
|
|
2 |
RMA |
11 |
$1.4 million per month |
First claim for payment to be made one month after the RMA commencement payment and then on the 1st of each month thereafter |
Unless terminated earlier as per RMA Contract |
|
3 |
Completion Payment |
1 |
$4.8 million |
Upon removal of all Tenderer items from Commonwealth property and the completion of the RMA Contract to the satisfaction of the Commonwealth Representative |
Unless terminated earlier, as per the RMA Contract |
Table courtesy of Department of Defence.
As far ADM knows, this timetable has not changed significantly but nor has a timetable for this new review been made known. Another striking element is the catchall “other activities subject to negotiation” which means the RMA/testing team can ask whether or not they can blow the vehicle up for blast testing. No more rating one insurance on that vehicle then.
Tenderers can only answer the questions asked of them. The tenders which have been submitted were done in good faith at the time, based on the material at hand. If this review uncovers significant issues that need to be addressed on AIC, will another tender be necessary? What does this do to costs? To schedule? To faith in the program processes?
ADM note: Land 400 program lead Brigadier Greg McGlone spoke at the Land Environment Working Group this week about the delays in Phase 2 and what they mean for industry. While industry didn’t seem impressed with the delay itself, the feeling in the room was positive in terms of how it was handled. Still no timeline was given for what the review will look like but the ‘We’ll let you know more as we do’ approach from the program office is welcome.