Project

Explanation

Description

The $661 million JP2043 Phase 3A project provides for the procurement of a Modernised High Frequency Communications System for Defence long-range communications. The Fixed Network component comprises four High Frequency stations, one station in each of the Riverina (New South Wales), Townsville (Queensland), Darwin (Northern Territory) and North West Cape (Western Australia) areas together with primary and backup Network Management Facilities in Canberra. The project will also provide upgrades to selected ADF sea, land and air mobile platforms to make them compatible with the top-level capabilities of the modernised network.

The Fixed Network capability will be provided in two major stages. The first stage (the Core System) replaced the existing Navy and Air Force High Frequency networks and is now supporting ADF operations. The second stage of the Fixed Network capability (the Final System) will provide increased automation and enhanced functionality and is still undergoing development

Background

Defence Communications Corporate Plan of May 1991 directed that existing ADF High Frequency networks be rationalised and modernised. Satellite communications is now the primary system for high and medium data rate communication with mobile ADF platforms (Mobiles) such as ships, aircraft and vehicles, however High Frequency provides a secure alternative means of long range communications for Satellite communications fitted platforms and a primary long-range communication capability for platforms not Satellite communications fitted. The High Frequency Modernisation Project was established in May 1993 and originally envisaged four implementation phases:

■  Phase 1 (completed 1994) - a preparatory phase including a Network Definition Study to determine the basic requirement and an Invitation to Register Interest process;

■  Phase 2 (completed 1996) - a more detailed definition phase involving parallel Project Definition Studies undertaken by short-listed Phase 1 companies following a Request for Proposal process;

■  Phase 3A (commenced 1997)- an implementation phase involving selection of the Prime Contractor through a restricted Request for Tender process, provision of a modernised High Frequency communication network and its follow-on support, and High Frequency upgrades to an initial range of Mobiles; and

■  Phase 3B (cancelled 1999) - an implementation Phase involving High Frequency upgrades to selected remaining Mobiles

The Phase 3A Prime Contract was signed in December 1997 with Boeing Australia (now Boeing Defence Australia). It is variable price, initially comprising 40 per cent milestone payments and 60 per cent earned value payments. This was subsequently amended to milestone payments only, after substantial delays to progress were experienced by the Contractor. A Network Operation Support Contract with Boeing Australia was executed at the same time as the Prime Contract, to take effect from Final Acceptance of Prime Contract deliverables.

The Prime Contract has undergone several major amendments and currently provides for the implementation in two stages:

■  a Core System (accepted October 2004), to provide an upgraded Fixed Network having a capability no less than that provided by the networks being replaced; and

■  a Final System including enhanced features for the upgraded Fixed Network and a Mobiles upgrade component.

Project approval provides for 87 platforms to be upgraded. The Prime Contract was originally scoped for First-of-Type installations and Upgrade Modification Kits for a total of 56 Platforms. However amendments made in 2004 reduced the Contract scope to a single First-of-Type Upgrade (CH47 Chinook helicopter), five High Frequency Upgrade Kits for follow-on Chinook installations, plus two Generic High Frequency Upgrade Systems. The Generic Systems will be used to demonstrate functional performance and to verify the suitability of System software and hardware components for platform use prior to implementation of Mobiles upgrades.

The Mobiles within approved project scope are listed below.

The Australian National Audit Office carried out a performance audit of the project in 2007. Audit Report No. 34 2006-2007 was tabled in Parliament in May 2007.

Uniqueness

The High Frequency Modernisation Project is a complex software intensive and high risk project involving geographically diverse sites at five major locations across Australia. Implementation of the Fixed Network has involved civil infrastructure development, electrical power generation and transmission, telecommunications infrastructure extension, communications system hardware and antenna installation. It has involved the engineering disciplines of systems engineering, software development, system design and integration, system test and evaluation. It also includes an extensive program to develop, install and integrate upgraded capabilities on selected Mobiles.

Because of the complex nature of the project, provision was made in the contract for the use of, what was at the time, relatively new methodology of Integrated Product Development Teams which included Contractor and Commonwealth personnel. These were included for project insight and to reduce risk particularly in the important areas of requirements clarification, systems engineering and acceptance, test and evaluation. While not as effective as originally expected the use of these teams did achieve moderate success.

The System being provided is designed to be one of the most advanced of its type in the world. It incorporates capabilities leading those in similar High Frequency communications systems in the United States and the United Kingdom.

Major Challenges

The project has suffered implementation delays but that part of the new communication system which has replaced the legacy systems previously operated by the Navy and Air Force has now been operational since 2004. The project is presently focussed on providing enhanced capabilities and on Mobiles upgrades.

The capacity to utilise the additional functionality provided by the Final System immediately following Final Acceptance will be limited by the status of the Mobiles upgrade program.

Platform availability will be an issue for all Mobiles upgrades. The upgrade schedules need to be coordinated with the maintenance schedules and operational requirements of the platforms. Other risk factors related to Mobiles upgrades include the task of integrating High Frequency upgrade equipment with existing communications systems of varying levels of maturity and sophistication, and of accommodating the new equipment within the spaces available. Development of radio specific software drivers to provide operational compatibility with the modernised High frequency System will also be required.

Current Status

Cost Performance

The project is tracking within its approved budget. Some payments to the contractor have been withheld as a result of failure to meet contracted schedule milestones.

Schedule Performance

The Core System was accepted in October 2004 and achieved Initial Operational Release in November 2004, replacing all Defence legacy High Frequency Systems (with the last legacy site closed in November 2005).

The delivery schedule for the Final System, including the single upgraded Chinook, was rebaselined following the execution of a Deed of Settlement and Release in February 2004 and a Deed of Agreement in May 2005.

Boeing Defence Australia experienced delay in the delivery of the Final System capability and failed to meet a significant delivery milestone in October 2007. Subsequently the Commonwealth agreed to negotiate with Boeing Defence Australia on the basis of granting schedule relief in return for receiving appropriate compensation. Negotiations commenced in February 2008 and ended in June 2008 with the parties failing to reach agreement on an acceptable overall compensation package.

Following technical and schedule reviews that occurred between July and September 2008, the Commonwealth and Boeing Defence Australia agreed to recommence negotiations in October 2008. Negotiations were conducted at the senior executive level and resulted in a Deed of Settlement, Release and Amendment being signed in April 2009. This Deed provided for agreement to a revised schedule to contract completion as well as resolution of various contractual issues.

Delays have also impacted on the upgrade schedule for the Mobiles not yet in contract. These delays, together with platform availability problems, mean that the Mobiles program may extend to 2016.

Capability Performance

The Core System is currently providing a highly reliable service in support of operational ADF platforms, meeting or exceeding the specified availability. Compared to the replaced Navy and Air Force High Frequency Systems the Core System provides:

■  greater automation;

■  improved frequency management;

■  joint communications planning tools;

■  improved area of coverage;

■  secure phone patches;

■  centralised management & control; and

■  reduced operations and maintenance staff.

Operators and maintenance personnel report a good degree of satisfaction with the Core System.

For the Final System, following the failure of negotiations in June 2008, the Commonwealth and Boeing Defence Australia conducted an independent technical review.

In its report, the technical review team noted that a significant proportion of the planned capability had already been successfully delivered and was in operational use. The team's primary conclusion was that the technical solution for the Final System is deliverable, albeit with some low level technical risk in achieving all performance requirements. From a technical viewpoint the report recommended that the program be pursued to completion