On 15 October 2010, the Minister for Defence Materiel announced this project is a Project of Concern.

Cost Performance
The project remains within the approved Budget.

Schedule Performance
The re-baselined dates for contractual acceptance of the first two aircraft (October and November 2010 respectively) have not been met due to delays in completion of testing and approval of technical documentation for the first-of-type aircraft and finalisation and delivery of support systems such as the publications, training, spares and test equipment necessary for the RAAF to fly and maintain the aircraft.

Following a determined effort by DMO and Airbus Military, the first aircraft (MRTT#3) was contractually accepted on 01 June 2011 and the second aircraft (MRTT#2) on 22 June 2011; approximately 29 months behind the original contract date and 7 months behind the re-baselined contract date.

The first two aircraft have been delivered and accepted in an initial configuration, with acceptance conditional on remediation of a number of non-conformances.

Concurrent with acceptance of the first aircraft, DMO and Airbus Military agreed the principles of a

commercial settlement which, amongst other things, includes a plan for remediation of all non-conformances and a program of improvements to the Aerial Refuelling Boom System.

The prototype aircraft, MRTT#1, was inducted into a refurbishment program in February 2011 to remove the extensive suite of flight test instrumentation, repair damage due to a serious January 2011 incident that resulted in the loss of the boom from the aircraft, install retrofit modifications, and complete the interior fitout in preparation for delivery in November 2011.

Conversion of MRTT#4 at the Qantas Brisbane Conversion Centre has progressed to the re-baselined schedule with delivery and acceptance planned for early October 2011. The fifth and final commercial A330 was delivered to the Australian Conversion Centre in May 2011 with preparation work being undertaken prior to roll-in to the conversion hangar during July 2011.

Materiel Capability Performance

To meet Defence strategic goals, the DMO has worked closely with Airbus Military to ensure that the initial configuration at acceptance provides essential capability for Air Logistics Support (passengers and cargo) and pods (hose and drogue) air to air refuelling. A suitable framework to enable contractual acceptance of aircraft with non-critical non-conformances has been established. This framework also ensures that full compliance will be achieved by Final Materiel Release (FMR) in order to achieve Final Operational Capability (FOC). All issues identified to date have suitable processes and procedures in place to reduce the operational impact. The non-conformances will be carefully managed to meet minimum requirements of Initial Materiel Release (IMR) and Initial Operational Capability (IOC).

Non-conformances to the contracted capability include, radio modes access (under high workload), minor fuel system design issues, and Mission Planning System (MPS).

Although the aircraft has been certified for boom refuelling of small and large aircraft, an agreement has also been reached on improvements to the Aerial Refuelling Boom System to provide an effective operational capability. While delivery of an operational boom refuelling system has been significantly delayed, the capability impact is not considered significant provided FOC can be achieved prior to the JSF aircraft entering RAAF service.

The United States (US) has also provided approval for the Electronic Warfare Self Protection system to be installed and tested (safety of flight and airworthiness only) in Australia, which will be completed by FOC.