Project

Explanation

Background

In 2007 the Australian Government considered a range of options to deliver a wideband satellite communications capability for the ADF. The US had an approved program for a five wideband satellite constellation, and in early 2007 offered the Commonwealth the opportunity of partnering in the program on the basis that the Commonwealth would fund the production of a sixth WGS satellite in return for a share of the services provided by the expanded constellation of six WSG Satellites (which is approximately 10% of the overall program).

Negotiations of the WGS Memorandum of Understanding (MOU) between the Commonwealth and the US Government began in March 2007, and in September 2007 the JP2008 Phase 4 project received combined First and Second Pass Government Approval for the procurement of the ADF's NEXTGEN SATCOM capability.

The WGS MOU was signed in November 2007 at the Australian Embassy in Washington DC enabling the US Government to exercise the contract option for WGS 6 on 1 December 2007.

WGS1 with a footprint over the Pacific Ocean and Australia has been operational since early 2008, with progressive launches culminating with the sixth satellite (WGS 6) becoming operational in 2013.

Outside the MOU, the project is delivering interim anchoring capability to provide access to the WGS satellite constellation from Australia's eastern and western seaboards. This will be achieved through the delivery of ground stations in Western Australia and at HMAS Harman in the Australian Capital Territory. Complimenting the onshore anchoring capability is an offshore anchoring capability that is now operational in Hawaii and Germany.

The project is also managing the provision of training of ADF personnel to operate the WGS system through a Foreign Military Sales (FMS) Case with the US Government to enable ADF personnel to operate the WGS system as part of the integrated US Wideband Satellite Communications Operations Centres (WSOC).

Uniqueness

The uniqueness of this project in the main relates to the acquisition strategy that governs the ADF's access to this satellite communications technology.

The WGS space segment component of the project will be delivered by the Commonwealth's participation in the US WGS program under a dependable undertaking. Under this arrangement the US Government will manage the contract with Boeing for all satellite production including WGS 6, which is being funded by Australia. The acquisition of the WGS constellation is governed by two contracts, Block I for satellites WGS 1, WGS2 and WGS 3, and Block II for satellites WGS 4, WGS 5 and WGS 6.

The steady-state provision of services will occur once WGS 6 is operational under the existing MOU.

The MOU agreement between the Commonwealth and US Government invokes the 'Exchange of Notes constituting an Agreement between the Government of the United States of America and the Government of Australia Concerning Certain Mutual Defence Commitments' (known as the Chapeau Defence Agreement) concerning liability and use and disclosure of information.

Major Challenges

A major challenge of this program is the execution of the program under a dependable undertaking where the US Government is the prime contractor. Under the terms of the MOU, the Commonwealth has no legal relationship with the satellite provider (Boeing), and receives only limited insight into the program constrained by pre-existing commercial terms within the MOU and International Traffic in Arms Regulations (ITAR).

Although the agreement with the US Government is through a joint production operations and support MOU, none of the WGS satellites and associated supplies will be owned by the Commonwealth. Nevertheless, benefits of this capability are realised through access to a six satellite constellation and the embedding of ADF personnel within the WSOC, which in effect allows the ADF to gain further WGS operational knowledge and realise the full capability potential of the WGS system.

Other challenges relate to the equitability regime that underpins the MOU. In this context the project is exposed to a share of the risks and rewards of the program. The capability advantages are underpinned by early satellite access and worldwide global coverage. The risk regime requires the Commonwealth to share the risk of satellite failures and schedule overruns.

To control risk exposure the Commonwealth negotiated into the MOU a financial ceiling cap which is designed to ensure the Commonwealth isn't exposed to cost increases above the cost ceiling.

To manage the technical and commercial complexities of the WGS program, a number of important management forums have been established to ensure the Commonwealth has a sufficient level of insight into the WGS program. The most important of these being the bi-annual Program Status Review and a Senior Executive Steering Group that meets each year to provide governance over the partnership. The management framework is operating effectively and the partnership is successfully working as an integrated project team.

Considerable acceleration of the standard acquisition cycle has meant the project continues to refine project management documentation, relevant to the nature of the agreements governing project execution.

Other Current Projects/Sub-Projects

JP 2008 Ph 3F ADF SATCOM Terrestrial Enhancements: This project will provide the mature Australian western seaboard anchoring capability for the WGS constellation.

JP 2008 Ph 5A Indian Ocean Region UHF SATCOM: This project will provide the ADF with twenty 25kHz UHF SATCOM channels on an Intelsat satellite to provide coverage of the Indian Ocean Region.