Land Warfare: New era for Defence logistics | ADM October 2012

Tenders have closed for what promises to be a massive overhaul of Defence’s warehousing and distribution facilities and services— currently operating out of some 24 Defence-owned sites across the country—together with the maintenance of much of the ADF’s land materiel systems.

In a two-pronged approach to the implementation of the multi-million dollar Defence Logistics Transformation Program (DLTP), tenders have now closed for new logistics services contracts, which are expected to be implemented in June 2013, and development work is well in train for the delivery of new or refurbished facilities under the infrastructure component of the program.

The key outcomes from the transformation of the Defence logistics network are aimed at providing Defence with a rationalised national logistics network, with modern purpose-built facilities, supported by appropriate distribution capability, and the delivery of enhanced land materiel maintenance capability.

In June this year requests for tender for warehousing and distribution (W&D) services (closed 24 September) and for land materiel maintenance (LMM) services (closing 22 October) were released to prospective tenderers who had satisfied Defences registration requirements.

Under the new W&D arrangements the provision of warehousing and distribution is sought as an integrated service with service delivery outcomes accountable regionally. And LMM contract contenders will find a very different approach to service delivery—moving from contractor led to Defence-led with contractor staff embedded into the business as Defence requires. At the unit level, contractor staff will report to the Commanding Officer.

Prospective tenderers in both the W&D and LMM RFTs were invited to propose an approach to innovate and continuously improve the Defence logistics system with the aim of maintaining or improving levels of service with total cost lowered over time.

This was in recognition that input from commercial logistics experience and knowledge into the logistics network would be a key driver of the innovation sought. Proposed solutions from tenderers would be evaluated to see how this might be achieved and there are indications that Defence may share benefits from improvements with contractors.

A series of industry briefings and visits to defence sites have been conducted in relation to the logistics services requirements, and arrangements for the infrastructure component of the program are in train, subject to Parliamentary clearance.

It is anticipated that by 30 June 2013, the W&D and the LMM logistics services contracts will replace the current Defence Integrated Distribution System contract; the Albury Wodonga Military Area contract for warehousing and land materiel maintenance; and the Hunter Valley Military Area Logistics Services contract.

Warehousing & distribution

The statistics underpinning the operations of Defence’s Joint Logistics Command (JLOC), responsible for the wholesale supply function from 24 Defence-owned wholesale warehouse sites across Australia are mind-boggling. With total inventory valued at $8.5 billion, JLOC oversights the management of 4.3 million stock items, close to 27 million transactions a year, 110 consignments a month, and maintenance orders valued at $100 million. Annual network movements are reported to total more than 75 million cubic kilograms, while the value of explosive ordnance held in 252 E/O warehouses, tops $2.9 billion.

Similarly the scope of the warehousing and distribution requirements under the proposed W&D contract is extensive and in addition to the receipt, storage, maintenance and despatch of inventory— logistics network holdings include well over 100 million items—it also includes support to ADF operations and exercises. JLOC praised incumbent contractor BAE Systems Australia for its recent support to Exercise Talisman Sabre. Such support covers the consolidation and despatch of cargo, the storage of specialist vehicles and the kitting of forces with equipment for operations. Disposal activities are also a feature of warehousing services.

Distribution services cover the planning and execution of distribution in conjunction with warehousing services, including the distribution of priority and routine freight between sites within Australia. Defence makes the point that the Military Integrated Logistics System (MILIS) will remain the system of record for Defence inventory and a warehouse management system will be sourced by Defence and interfaced with MILIS.

Land materiel maintenance

The scope of the LMM contract includes vehicle and equipment maintenance requirements to be managed within the logistics network and which relates predominantly to land based equipment operated by the Army, Navy and Air Force. Defence will retain responsibility for the management of the LMM in collaboration with the contractor, with the contractor largely responsible for the operation of relevant functional areas in the workshop.

Equipment to be maintained may include armoured and protected mobility vehicles, (such as M1A1, ASLAV, M113AS4, Bushranger PMV) and light, medium and heavy general transport and firefighting vehicles. Also included are weapons, including direct and indirect fire weapons and small arms, and ground based air defence equipment. Also within the LMM scope is the maintenance of engineering plant and equipment, aerial delivery equipment, electronic instrument and radio, and test equipment and a limited range of marine equipment such as Army watercraft.

Because a portion of the Australian Defence inventory is US sourced and under the control of International Traffic in Arms Regulations (ITAR) W&D and LMM contractors, who are third parties for ITAR purposes, must be ITAR compliant and have obtained US authorisation.

Currently BAE Systems Defence Logistics manages national warehousing and distribution services, and maintenance support of selected land materiel and electronic equipment for the ADF. It delivers these services through the Defence Integrated Distribution System (DIDS) and Albury Wodonga Military Area contracts. The company employs more than 1,500 people, supporting a stores, distribution and equipment repair network across 24 warehousing facilities and seven major equipment repair and maintenance workshops, strategically located around Australia.

Unrelated to the service contracts being replaced by the W&D and LMM requirements, but reflecting perhaps the complexities involved in sourcing maintenance for the Army’s armoured vehicles, it was announced in mid-2011 that General Dynamics Land Systems Australia (GDLSA), the OEM for both the ASLAV and the M1A1 Abrams tank, and had been responsible for their support under previous arrangements, would provide spares and engineering support for the ADF’s fleet of Abrams Tanks, Light Armoured Vehicles and Hercules Recovery Vehicles for at least the next five years.

GDLSA had responded to the RFT for Land 112 (ASLAV) and Land 907 (M1A1) released in late 2008, seeking tenders for TLS for the ASLAV family of vehicles (FOV) and/or the M1A1 Abrams FOV and the M88A2 Hercules Recovery FOV.

The ASLAV FOV comprised 257 vehicles across seven types and variants with the existing support model based on a combination of Commonwealth and outsourced resources. It also noted that the M1A1 and the M88A2 were a new FOV comprising 59 and seven vehicles respectively, both vehicles based in the Northern Territory (Darwin) and Victoria (Bandiana and Puckapunyal). This TLS contract excludes maintenance support for those vehicles based at military establishments in Victoria and handled by BAE Systems Australia.

Infrastructure component

That other component of the Defence Logistics Transformation Plan, known as the infrastructure project, will deliver new (or refurbished) facilities to modernise the Defence logistics network. The current Defence wholesale storage network operates from infrastructure spread across some 201 warehouses in more than 24 locations, while the maintenance system operates out of infrastructure and facilities that have not kept pace with comparable industry standards.

The majority of facilities are more than 40 years old, many dating back to World War II and they no longer support the efficient or effective delivery of wholesale logistics services to the ADF.

Defence says significant investment of up to $600 million is planned for the wholesale logistics network including the construction of new and refurbished facilities. The new WDD and LMM service providers will operate out of existing facilities, moving to new and upgraded facilities as they are commissioned. Timelines provided suggest that most work on the various sites will be completed by mid-to end 2014.

With funding provided through 1st and 2nd pass approvals, infrastructure design development commenced in mid 2011, with 1st pass achieved in November 2011. In May this year 2nd pass was achieved. While the infrastructure component remains subject to Parliamentary clearance, the DLTP was referred to the Public Works Committee (PWC) on 20 June 2012 and the PWC has called for public submissions into the proposed works and a number of public hearings will be held later this year.

Infrastructure proposed under the DLTP will consolidate the wholesale logistics network to seven primary sites, supported by a number of specialty retail sites. To support this consolidation, Defence will construct new facilities and infrastructure, or enhance existing facilities, at the following sites. Construction times given below are subject to Parliamentary clearance being achieved.

East Bandiana, Vic The JLU (Victoria) occupies relatively modern storage and maintenance facilities. Which will be retained and have been incorporated into the design of the new precinct to minimise the extent of new construction work. Construction will commence in early 2013 and is planned to be completed by mid 2014.

HMAS Stirling & Guildford, WA The facilities occupied by the Joint Logistics Unit (West) are relatively modern and generally support the units longer-term requirements. Accordingly, only shortfalls will be addressed. Construction will commence in early 2013 and is planned to be completed in early 2014.

Moorebank, NSW It is not cost-effective for Defence to make a significant infrastructure investment on the leased site. Defence therefore plans to invest in new facilities and infrastructure for the Defence National Storage and Distribution Centre on the Commonwealth owned land to the north and east of the current leased site at Moorebank. Construction could commence in early 2013 and is planned to be completed by late 2014.

RAAF Amberley, QLD The proposed infrastructure works will enable the JLU (South Queensland) to vacate Bulimba and Meeandah, and consolidate its overall storage and maintenance footprint to a greenfield site at RAAF Amberley. Construction will commence in early 2013 and is planned to be completed in late 2014.

RAAF Edinburgh, SA The JLU (South) occupies relatively modern storage and maintenance facilities, which were completed in 2011. These facilities will be retained and have been incorporated into the design of the new precinct to minimise the extent of new construction work. Construction will commence in early 2013 and is planned to be completed in early 2014.

Robertson Barracks, NT The JLU (North) logistics network is split across RAAF Darwin and three separate leased sites at Winnellie, in Darwin. Under proposed facilities works the JLU will consolidate to a new greenfield site at Robertson Barracks. Construction will commence in early 2013 and is planned to be completed by early 2015.

Lavarack Barracks, QLD The majority of the existing facilities were constructed in the 1970s, are at the end of their economic life and, as a result of their size, condition and location on the site, are unsuitable for reuse or refurbishment. Defence therefore plans to redevelop and expand the existing JLU (North Queensland) precinct at Lavarack Barracks. The proposed works will be contained within the existing property boundary of Lavarack Barracks. Construction will commence late 2012 and is planned to be completed in mid 2015.

Acknowledgement
The basis for this article was drawn from the highly informative Joint Logistics Command website within the Vice Chief of Defence Force Group at www.defence.gov.au/jlc/