BAE Systems has signed a new contract to continue supporting Australia’s strategic JORN Over the Horizon Radar (OTHR) system that will deliver major savings in support of Defence’s Strategic Reform Program (SRP).
The Company has supported the JORN radar system development, sustainment and operations since the mid- 1980s and has pursued initiatives to deliver savings and efficiencies.
BAE Systems Managing Director Jim McDowell said when the SRP was announced in 2009, the company committed to deliver further cost savings.
“Working closely with the OTHR Systems Programs Office and in line with the SRP, the new agreement will deliver in excess of 16% savings over the five year contract," McDowell said.
“This has been achieved without adversely impacting on the Royal Australian Air Force (RAAF)’s OTHR operational capability.”
The five-year contract extension, with options to extend for a further nine years, is valued at $116 million.
Under the contract, 120 BAE Systems employees (based in Adelaide and the Northern Territory) will provide maintenance, logistics, engineering development, installation, verification and validation, operator training and support to the operation and enhancement of Radar Three and other key elements of the Jindalee Operational Radar Network.
“Working closely alongside the OTHR Systems Programs Office we have been able to achieve an agreement that includes both the necessary cost savings and incentivisation framework, and one that incorporates a culture of continuous improvement,” McDowell said.
Key features of the new contract include:
• Significant subcontract, materials and labour cost savings;
• Incorporation of a new Efficiency Program that will help to identify further efficiencies using a LEAN approach;
• Simpler contract model incorporating pain/gain share has reduced back office overhead and provides a genuine incentive to the Contractor; and
• Increased operational availability and improved operational flexibility delivered within existing contract labour profile.
Defence Materiel Minister Jason Clare said recently that Defence will save $100 million over the next decade under new arrangements for operating the radar network protecting northern Australia.
He said the savings would be achieved by Defence working in partnership with BAE Systems and Lockheed Martin to deliver more efficient support services to the radar -- the Jindalee Operational Radar Network (JORN).
They would be achieved without any impact on the operating capability or safety of the radar network.
The savings follow an end-to-end review of the JORN system to identify possible savings measures.
The JORN system was chosen as one of the four initial pilot projects developed in early 2010 for the implementation of Strategic Reform Program – Smart Sustainment Initiatives.
The revised contracts include an extension to the original contract support periods.
Additionally, the contracts include an option for further extensions should capability outcomes and cost savings continue to be achieved.