Project

Explanation

Background

Project AIR 6000 was established in 1999 to replace the air combat capabilities provided by the F/A-18A/B and F-111 fleets. In 2002 Government identified the Lockheed Martin F-35 JSF as the preferred option and joined the System Development and Demonstration (SDD) phase of the JSF Program as the eighth (and last) Partner. At this time the project discontinued the competitive evaluation under AIR 6000 and was retitled the New Air Combat Capability (NACC) Project. The subsequent decision by Government to acquire the F-35 JSF has been taken progressively including:

•  Providing First Pass approval in November 2006, which included agreement to join the next phase of the JSF Program and funded project AIR 6000 Phase 1B detailed definition and analysis activities to support Government Second Pass approval for AIR 6000 Phase 2A/B.

•  Signing the multilateral Production, Sustainment and Follow-on Development (PSFD) Memorandum of Understanding (MoU) in December 2006 to allow entry into the next stage of the JSF Program.

•  AIR6000 PH2A/B Stage 1 Approval in November 2009 to acquire 14 CTOL JSF aircraft and associated support and enabling elements necessary to establish the initial training capability in the US, commencing in 2014, and to allow commencement of Operational Test in the US and Australia.

In the 2009 Defence White Paper, Government confirmed that it plans to equip the Royal Australian Air Force (RAAF) with around 100 F-35 JSF aircraft. AIR6000 Phase 2A/B Stage 2 will acquire at least 58 CTOL JSF aircraft and enabling elements to achieve a proposed IOC in 2018 and Final Operational Capability (FOC) in 2021. Government consideration of AIR6000 Phase 2/AB Stage 2 approval is currently scheduled for 2012. The remaining tranche of 28 aircraft is identified against AIR6000 Phase 2C and is planned for Government consideration in the 2014-15 timeframe.

The staged approach provides time for refinement of costs and more detailed definition of support requirements prior to the Government's decision on buying additional aircraft.

Uniqueness

The JSF Program was established by the US Government as the first international collaborative development program for a US military aircraft. The program includes initial design, production, follow-on development and through life support of the JSF global fleet.

The JSF Program is expected to deliver over 3000 aircraft to the eight MoU Partners (with the US to acquire approx 75% of the total) with the potential for significant additional aircraft procurements by Foreign Military Sale (FMS) customers.

The JSF is characterised by a low observable (stealth) design, internal weapons and fuel carriage, advanced electro-optical and infrared sensors, long range, the ability to employ a wide range of air-to-surface and air-to-air weapons, advanced communications suite to enable network centric operations, state of the art prognostics and health management, a single interchangeable engine and radically reduced support requirements.

Due to strict US export restrictions imposed on the JSF Air System, direct commercial sale is not permitted. JSF aircraft and associated supporting systems will be acquired by Australia under the PSFD MOU arrangements. Key factors are:

•  The US Government will contract with Lockheed Martin and engine manufacturers on Australia's behalf in accordance with US contracting laws, regulations and procedures.

•  The Joint Program Office (JPO) acquisition strategy is for 11 annual LRIP contracts, transitioning from a Fixed Price Incentive Fee to a Firm-Fixed Price at the appropriate time.

•  Each contract will require a separate PPR from each partner nation defining their requirements for that buy. PPRs are submitted two years ahead of contract and four years ahead of delivery.

•  Aircraft to be delivered under Phase 2A/B Stage 1 will be acquired under four separate annual contracts commencing with LRIP 6.

•  The Australian JSF capability is to be supported under a global support arrangement (referred to as 'Autonomic Logistics Global Sustainment') through performance- based contracts.

As well as providing capability and programmatic benefits, a key aim of Australia's participation in the JSF Program is to embed Australian industry in the JSF global supply and support chain for the life of the JSF Program. The Commonwealth continues to work with the Prime Contractor Lockheed, its JSF industry partners and their sub contractors to achieve long term industry outcomes for Australia.

Major Challenges

The JSF is a large and complex program and many challenges remain. While as a MoU Partner Australia does have a role, overcoming technical challenges is primarily a US responsibility.

The major challenges facing the NACC project are:

•  Putting in place appropriate risk mitigation strategies to deal with cost and schedule impacts to the NACC Project that may result from changes to the US Program following the completion of the US Department of Defense's (DoD) review activity.

•  Finalise the strategy and plan for the conduct of JSF Operational Test and Evaluation.

•  Complete the necessary workforce planning required to transition the JSF into service.

•  Preparing for Government Second Pass consideration of Stage 2 whilst concurrently managing the acquisition activities for Stage 1.

•  Resolve arrangements for pooling of JSF partner resources (including aircraft, support equipment and personnel) at the US Integrated Training Centre.

•  Improved understanding of JPO requirements development processes and the US Defense Federal Acquisition Regulation Supplement (DFARS) contracting framework in order to optimise execution of Australia's contracts.

•  Scope and plan the system integration activities necessary to introduce the JSF into service.

•  Appropriately manage JSF misinformation in the media.

•  Support the ongoing consultation and engagement of the public on noise issues associated with RAAF Base Williamtown.

•  Improve understanding of the full scope of security implications of procuring and operating the JSF aircraft.

•  Implementing an industry support program to assist Australian industry to win JSF related contracting opportunities.

Other Current Projects/Sub-Projects

AIR JSFSDD Participation in the JSF SDD Program: The contribution to the SDD program is in two parts, a cash component of SDD funding of US$144m, and a non-financial component of US$6m with the Defence Science and Technology Organisation (DSTO) conducting a Pacific Rim Command, Control, Communication, Computing, Intelligence, Surveillance, and Reconnaissance (C4ISR) study. All AIR JSFSDD financial milestones have been completed. The US SDD Phase is due to be closed in 2016 following the release of Block 3 software.

AIR 6000PH1B - Detailed Analysis and Acquisition Planning (AUS$100M): AIR 6000 Phase 1B focused on the analysis and risk mitigation activities necessary to support Government's procurement decision on the JSF and to support Australian defence industry participation in the JSF Program. The primary financial activity was provision of Australia's shared cost contribution to the US JSF Program in accordance with our obligations as a Program partner in the PSFD Phase. Apart from ongoing funding to support some outstanding contracts, Phase 1B is complete and the NACC Project is now in the acquisition phase.