Identified Risk (risk identified by standard project risk management processes)

Description

Remedial Action

Change: any change introduced to the existing platform design will have cost and schedule impact. The extent of which is dependent upon the timing of the change.

Pressure for change could occur for a variety of reasons including:

•  Requirements change.

•  Legislative and compliance requirements.

•  Equipment obsolescence.

Recognise that the program will have to manage change to cope with obsolescence.

Effectively engage with all stakeholders to ensure that they understand the potential implications of change to cost and schedule.

Provide robust mechanisms to control the authorisation of change.

Ensure that where change is required that it is approved and implemented in an appropriate phase of the program. Delays in approval will usually result in significant cost and schedule impact.

Infrastructure: there are significant risks in the development of a green field shipyard:

•  Physical infrastructure.

•  IT Systems and tools.

•  Working practices and procedures.

The construction of the shipyard has been completed and this risk has been re-assessed as a low risk.

Design Maturity: the design of the AWD is based on the Navantia Platform System with an Australianised Aegis Combat System.

Critical Design Review was conducted in December 2009 - this risk is no longer a major risk. The major risk associated with the Aegis is the integration.

Integration of the Australianised Aegis Combat System.

There is risk in achieving the integration of the Combat Systems solutions. The key issues driving this risk are:

•  The current version of the Aegis Weapon System has not been previously integrated in the platform.

•  The selection of Electronic Warfare and Communications Systems solutions was timed to take advantages of technology developments.

•  Equipment selections may impact on the topside design.

Note:  As the program moves into the build and integration phase the integration risk is being managed as a separate risk rather than part of the Design Maturity risk.

The risks associated with the integration of the Aegis Weapons System are being actively managed through regular reviews between the Alliance, Platform System Designer, US Navy and Lockheed Martin (the Aegis equipment supplier to the US Navy). Action is taken to ensure emerging issues are identified and addressed in a timely manner.

Electronic Warfare and Communications and Information Systems procurement strategies were developed with a wide range of stakeholder engagement. These strategies are aimed at ensuring that the customer will be satisfied with the selected solution and that the solution will have minimal impact on the platform design. Electronic Warfare source selection has now been announced. Other Communications equipment selections are undertaken in conjunction with quick look topside design studies, this will minimise the risk of impact to topside design.

Emergent Risks (risk not previously identified but have emerged during 2009-10)

Description

Remedial Action

Production Efficiency may be compromised by skilled labour shortages, delays in deliveries of materials to the shipyards, and poor quality data from the designer.

Action has been taken to improve efficiencies in the shipyards by embedding resident teams from both the Alliance and Navantia with access to the overseas design authority. Formal review processes have been implemented to manage work flow.

Certification requirements unclear for some equipment and US Navy and some Original Equipment Manufacturers are not disclosing requested objective quality evidence.

The Project Certification Plan has been agreed with the RAN. The Program is working closely with the US Navy and Original Equipment Manufacturers to obtain the required objective quality evidence.

Subcontractor Performance may result in poor quality product, delays or changed requirements.

The performance of some subcontractors has required active management and intervention, with resultant improvements. Embedding Alliance staff in block subcontractors premises will provide management oversight and the ability to address and resolve issues quickly.

The Indexation Gap between ABTIA and Platform System Design contract escalation obligations and the fixed of indexation creates cost risk for the AWD Program.

Close monitoring through annual estimates to ensure that the balance of the contingency budget remains sufficient to cover any shortfalls.

Support System: current data available to the Alliance and/or the Commonwealth may not be mature enough to achieve an optimised support system. Facilities may not be ready when required for transition into in-service support.

Mitigation strategies are in place to minimise the risk and work is in hand with the Alliance to develop strategies to progressively seek the data required to support the development of an optimised support system. The Program is working with Defence Support Group to proactively manage the delivery of support facilities.