1.3  Project Context

Project

Explanation

Background

The Project received Government approval in March 1999 to replace the Army's aerial reconnaissance and fire support capability, which was based on the 1960s technology Bell Kiowa and Iroquois helicopters. The project's acquisition strategy specified substantial Australian Industry Involvement, and in February 2002 the Commonwealth entered into separate contracts with Australian Aerospace for the Acquisition and Through Life Support programs.

The first four aircraft were manufactured and assembled in France and the remaining 18 aircraft were manufactured in France and assembled in Brisbane. One ARH is fitted with flight test instruments to assist the test and evaluation of ARH capability upgrades.

The training system relies heavily on simulation devices using the Full Flight and Mission Simulator and Cockpit Procedures Trainer(s) which were built in France, then shipped to Australia. The Full Flight and Mission Simulator and one Cockpit Procedures Trainer are installed at Oakey (Queensland); the second Cockpit Procedures Trainer is installed at Darwin (Northern Territory).

The project has experienced delays in achieving the Initial Operational Capability (IOC) critical contractual milestone, which was due in June 2007, resulting in the Commonwealth exercising its contractual right to stop all payments on the Acquisition Contract while maintaining payments on the Through Life Support Contract.

Several factors contributed to the delay in achieving that milestone which in turn resulted in insufficient numbers of aircraft, training devices and logistics support in service to enable the required training outcomes.

Australian Aerospace served a notice of dispute in October 2007 and the parties entered into a formal Dispute Resolution process over issues affecting both the Acquisition and Through Life Support contracts. The dispute resolution process resulted in both parties signing a Deed of Agreement in April 2008 which established a revised Acquisition Contract Price and Delivery Schedule, a revised Through Life Support Contract pricing structure that transitioned it to a Performance Based Contract, and established networks for work done by third-party support subcontractors. The re-plan includes integration of a program necessary to retrofit all ARH to the final configuration where all mission systems are certified for employment by Army crews (known as the retrofit program). Partial payments to Australian Aerospace on the ARH Acquisition Contract were recommenced in April 2008, with full payment due on signing of the contract change proposals.

Changes to the Acquisition Contract arising from the signing of the Deed of Agreement were agreed between the parties in February 2009, with full payment recommencing from this date.

The commensurate major documentation amendment through a Contract Change Proposal was approved in May 2009, and the Contract Amendment was issued in June 2009.

Uniqueness

The Australian Tiger ARH design is based on the Eurocopter French and German Armies Tiger helicopters. The ARH design varies from the French and German designs through changes made to the following systems:

•  Secure radio communication systems,

•  Digital Map System,

•  Integration of the Hellfire Missile weapon system,

•  70 mm rocket modifications,

•  Storage Bay and Digital Video Recorder,

•  Roof Mounted Sight multi-target tracking system, and

•  Helmet Mounted Sight and Displays in both cockpits.

The ADF's Airworthiness certification of the ARH Tiger aircraft relies on the French airworthiness certification process undertaken by the French acquisition agency (Direction Générale de l'Armement). The ADF's Director General Technical Airworthiness recognises the French acquisition agency as a competent certification agency, and subsequently accepts the French acquisition agency certification of common Tiger systems used in the Australian ARH Tiger. In doing so, the French acquisition agency certification of the French aircraft became an integral part of the ADF's ARH certification plan. Consequently, delays in the French program flowed through to the ADF's ARH program and delivery of operational capability to the Army. This has caused slippage in the aircraft and system certification, simulator development and aircrew training. The delays in the program have resulted in the contractor failing to achieve the original contracted IOC critical milestone.

Major Challenges

The major challengefor the project remain ensuring the Prime Contractor (Australian Aerospace) delivers the remaining capabilities in accordance with the Acquisition Contract milestone schedule, and ensuring that adequate rates of effort are able to be maintained by Army.

The most significant issue for the program continues to be the underperformance of maintenance and supply support networks. This is impacting the availability of serviceable Spares (Repairable Items and Breakdown Spares) and Support and Test Equipment at the required configuration to support the in-service fleet achieving required flying rates of effort and Australian Aerospace's ability to deliver aircraft on time from its production / retrofit program.

Other Current Projects/Sub-Projects

N/A