Project | Explanation |
Description | The $8,261 million Sea 4000 Phase 3 Air Warfare Destroyer Project will acquire three Hobart Class Air Warfare capable Destroyers (AWD) and their support system for the ADF. The capability provided by the AWDs will form a critical element of the ADF's joint air warfare defence capability and will contribute to a number of other joint warfare outcomes. |
Background | The Program began, following the adoption by Government of the 2000 Defence White Paper, with an initial phase which assessed requirements and alternatives for an air warfare destroyer. 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 Shipbuilding 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 US 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 F100 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 Navy 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 Navy'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. Alliance based contracting has delivered highly successful outcomes in complex projects such as construction of the National Museum of Australia and current upgrades to the Hume Highway in southern New South Wales. The Alliance based contract arrangement should deliver similar benefits, although it also incorporates additional features to protect the Commonwealth's essential interests. The key features of the AWD Alliance and the operations of the Alliance based contract arrangement include: ■ The 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. ■ 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 Industry Participants are expected to use their commercial expertise and business acumen in achieving the aims of the Program. ■ The Commonwealth retains "step in" rights to protect the national interest and the unilateral right to determine strategic issues relating to the Program. ■ To the greatest extent possible, the Alliance accommodates emerging issues to achieve a "best for Program" outcome which considers the interests of all parties. ■ Risk is managed through the allocation of management reserve. ■ Procurements are executed by the Participant best placed to do so; where this is one of the Industry Participants it is done in accordance with their processes and procedures. ■ 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 managed by the AWD Alliance under the Alliance based contract arrangement. 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 a mature design package by Critical Design Review in December 2009, this includes the successful integration of the Australianised weapons and sensor package in the existing platform. ■ Ensuring that the Alliance participants and their sub contractors have access to appropriately skilled and experienced labour for effective management of the Program, building and testing the ships, and establishing the support systems. ■ 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 properly sustained through life. ■ Establishing an efficient working shipyard from a green field site (at Osborne, South Australia) ■ Adapting the build strategy and methodology of the Spanish ship designer, Navantia, to the different Australian shipbuilding environment |
Current Status | Cost Performance Cost performance during the 2008-09 Financial Year is better than planned due to early equipment procurement. The project is currently progressing within the approved budget. Schedule Performance Progress to achievement of planned in service dates for the three ships and their support system is as scheduled although the selection of the block suppliers was approximately six months later than planned. The three ships are planned for delivery in December 2014, March 2016 and June 2017 respectively. Capability Performance The current status is that planned capability will be achieved. |