Project | Explanation |
Background | In May 2005 the Government granted first pass approval to the Program, allowing commencement of Phase 2, the Design phase. Phase 2 oversaw the development of two platform designs: • The 'Existing' design based upon a modified version of the Navantia designed and built F-100 warship as the Australianised military off-the-shelf option; and • The 'Evolved' design produced by Gibbs & Cox developed from an in-house design utilising design features of the US Navy class of Aegis Guided Missile Destroyers. In May 2005, the Government selected ASC AWD Shipbuilder Pty Ltd as the shipbuilder for the AWD Program and determined that the ships should be built in Adelaide. Raytheon Australia Pty Ltd was chosen as the Combat System Systems Engineer. In October 2005, Defence sought and received Government approval to acquire three Aegis Weapon Systems to provide the core air warfare capability of the AWD. The Commonwealth subsequently entered into a United States (US) Foreign Military Sales (FMS) agreement for the acquisition of the Aegis weapons system comprising: • Three Aegis Weapon System sets, and • Associated engineering services and integrated logistic support. In June 2007, at Second Pass, the Government granted approval to commence construction of the Hobart Class Air Warfare Destroyer utilising the existing design. This decision initiated the current phase of Project Sea 4000 Phase 3, the construction phase. Phase 3 includes detailed design, procurement, ship construction, and set to work of the Aegis Combat System and the F-100 based Platform Systems. This culminates in the delivery of three Hobart Class AWDs together with the ships support systems including initial spares and ammunition outfits, and initial crew training. Phase 3 concludes with the delivery to the RAN of the third AWD, HMAS Sydney. At Second Pass, the Government approved Defence's proposal to close Sea 4000 Program Phase 2, Design, and Phase 3.1, Aegis acquisition activities, and combine the remaining Phase 2 and Phase 3.1 scope and funding with Sea 4000 Program Phase 3. |
Uniqueness | The Sea 4000 Air Warfare Destroyer Program is currently one of Australia's largest and most technically complex Defence projects. The AWDs will be the RAN's first Aegis equipped ships and will be the most modern version of Aegis installed in a non US Navy ship. The AWDs are being delivered through an Alliance based contract arrangement involving ASC AWD Shipbuilder, Raytheon Australia and the Commonwealth, represented by the DMO. The Alliance based contract arrangement is described in greater detail in the "Contractual Framework" Section. |
Contractual Framework | The Alliance based contract arrangement was signed in October 2007. Key features of the AWD Alliance and the operations of the Alliance based contract arrangement include: • The Alliance Industry Participants (Raytheon Australia and ASC AWD Shipbuilder) are jointly and severally responsible for the delivery of the three ships and their support systems. Each party remains individually responsible for compliance with all statutory requirements. • The Alliance is neither a legal body, nor a joint venture. • The legal and commercial basis for the Alliance is established through ABTIA contract signed by all three participants. This establishes a virtual organisation under the governance of the AWD Alliance Board. • All participants have a shared commercial interest in the outcome of the Program through pain share/gain share arrangements. The Industry Participants fee is at risk if performance is poor, however, they can benefit from delivery ahead of schedule and / or under budget. • The Commonwealth retains "step in" rights to protect the national interest and the unilateral right to determine strategic issues relating to the Program. • Liquidated Damages may apply in the event any ship is delivered later than specified dates. • Risk is managed through the allocation of management reserve. • All financial accounting is on an "open book" basis. The Commonwealth entered into a Platform System Design contract with Navantia, the ship designer, in October 2007. This contract is managed by the AWD Alliance under the Alliance based contract arrangement. The Aegis combat system is being procured by the Commonwealth under the FMS agreement with the US Navy. This agreement is also managed within the AWD Alliance project team. While Navantia and the US Navy (and its equipment supplier, Lockheed Martin) are not part of the Alliance, they work closely with the Alliance and are treated in an alliance like manner. |
Major Challenges | The major challenges the project faces are: • Achieving peak hull production capacity, recruiting and training people to meet this peak workforce demand and stabilising workflow in order to achieve maximum shipbuilding productivity. • Achieving timely delivery of items being manufactured by sub contractors for the Alliance participants, from multiple locations within Australia and around the world. • Delivering an appropriately structured support system to enable the ships to be effectively and efficiently sustained through life. • Pressures on the stability of the design baseline documentation from the PSD Navantia. Changes can have significant cost and schedule implications if introduced late in Production. |
Other Current Projects/Sub-Projects | N/A |