Project

Explanation

Description

The $2,101 million Air 87 Phase 2 Tiger Armed Reconnaissance Helicopter (ARH) Project was approved to provide a reconnaissance and fire support capability for the ADF. The Project has contracted for delivery of 22 aircraft including an instrumented aircraft, a Full Flight and Mission Simulator, two Cockpit Procedures Trainer(s), Groundcrew Training Device(s), Electronic Warfare Mission Support System, Ground Mission Equipment, with supporting stores, facilities, and ammunition.

Background

The Project received Government approval in March 1999 to replace the Army's aerial reconnaissance and fire support capability, which is currently based on the 1960s technology Bell Kiowa and Iroquois helicopters. Defence's acquisition strategy specified substantial Australian Industry Involvement in the project, and in February 2002 Australian Aerospace Ltd was awarded a fixed price Acquisition contract and firm price Through Life Support contract.

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 will be installed at Darwin (Northern Territory) in the near future.

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 (Delegation General Pour l'Armament). 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 IOC critical milestone.

Major Challenges

As was the case in 2007/08, the major challenge for the project remains ensuring the Prime Contractor (Australian Aerospace) delivers the remaining capabilities in accordance with the rebaselined Acquisition Contract schedule thereby avoiding schedule slippage. Commonwealth test and evaluation activities are critical to achieving capability delivery.

As identified in 2007/08, the most significant issue for the program is still the immature maintenance and supply support networks which are impacting the availability of serviceable Repairable Items at the required configuration to support the in-service fleet and retrofit program. Australian Aerospace signed the last two critical subcontracts with its suppliers for ongoing maintenance and supply support in June 2009.

Current Status

Cost Performance

The Project is still expected to deliver the required capability within the approved budget.

Schedule Performance

The first delivery of an operational capability to Army is the Initial Operational Test and Evaluation Readiness Milestone in September 2009 some 27 months later than originally planned. As at 30 June 2009, 15 ARH have been accepted by the Commonwealth; six are undergoing retrofit to the Initial Operational Test and Evaluation Readiness configuration; two are being used for type acceptance activities (includes the instrumented aircraft and the first Initial Operational Test and Evaluation Readiness configuration aircraft); four are being used for training; and three are being used for training purposes in the operational squadron in Darwin in readiness for delivery of the Initial Operational Test and Evaluation Readiness aircraft. The Cockpit Procedures Trainer at Oakey was accepted in December 2008 and is being used for aircrew training.

The rebaselined schedule has all 22 ARH planned to be accepted by September 2010 with the Final Acceptance of supplies under the Acquisition Contract planned for June 2011.

Capability Performance

The rebaselined schedule includes all remaining engineering activities required to deliver a fully compliant ARH System. Full compliance or Service Release of all Engineering Change Proposals is planned for January 2011.

The Full Flight and Mission Simulator has been upgraded to the final aircraft configuration with accreditation to be completed in July 2009 before being returned to training. The Cockpit Procedures Trainer for Darwin is currently undergoing test and evaluation and is planned to be accepted by March 2010.

Training operations continue in Darwin and are proving valuable in exercising the maintenance and supply support chains early so that deficiencies can be identified and corrective actions taken before the operational capability is delivered post September 2009.

As at 30 June 2009 the ARH fleet had flown 4300 hours.