Project

Explanation

Description

The $1,529.6 million Sea 1390 Phase 2 Guided Missile Frigate (FFG) Upgrade Project seeks to regain a comparative regional maritime capability by upgrading four (originally six) Adelaide Class FFGs, and to ensure that they remain effective and supportable until their removal from service between 2015 and 2021. Royal Australian Navy (RAN) FFGs are a derivative of the US Navy Oliver Hazard Perry FFG-7 class Guided Missile Frigates. Each FFG is receiving an improved Anti-Ship Missile Defence system; an On Board Training System; an Electronic Support System; an upgraded Underwater Warfare System, upgraded diesel generators and other ship systems. The upgrade project is also establishing a shore-based Operator and Team Trainer system and a Warfare System Support Centre.

Background

The project's implementation phase commenced in June 1999, when the Prime Contract with Australian Defence Industry (now Thales Australia) was signed. The contract provides for Thales to have total contract performance responsibility and sole responsibility for the upgrade of each FFG. The role of the Systems Program Office in relation to the technical aspects of the upgrade has been and is generally limited to reviewing and commenting upon the activities proposed to be conducted by the prime contractor.

As a result of the contractor taking substantially longer than the original schedule, the project was re-baselined in April 2004 and again in May 2006. The re-baselining deferred the delivery of all FFGs with the last ship being deferred by four and a half years.

In November 2003 the Government determined that the Guided Missile Frigate fleet would be reduced from six to four ships with the two oldest FFGs to be removed from service, prior to their planned upgrade and life extension. In mid 2006 the prime contract was changed with scope reduced from six to four ships (oldest FFGs, HMA Ships Adelaide and Canberra not upgraded), settlement of delay claims, changes to the master schedule and milestones, and changes to provisional acceptance processes of upgraded ships from the prime contractor all contributed to the delays. The financial impact of this global settlement was reflected by a reduction in prime contract price of $40m. This recognises the engineering development investment and six ship sets of equipment were not affected by the reduction in the number of upgraded ships from six to four.

Subsequent difficulties with compliance led the Commonwealth to refuse approval of contractors test procedures. In April 2005 Thales elected to proceed 'at its own risk' with a test and trial regime outside of the contractual terms. The contractor saw this as the only feasible approach to completing the project.

The complexity of the program was initially underestimated. The performance specifications were not formalised and agreed before contract signature and this has impacted the delivery and agreement of the offered capability and development of the test program.

Provisional Acceptance of HMA Ships Sydney, Melbourne and the Team Trainer, located at HMAS WATSON were achieved in December 2006, October 2007 and November 2007 respectively. HMAS Darwin achieved Provisional Acceptance in August 2008.

HMA Ships Sydney and Darwin were contractually accepted by the Commonwealth in November 2008, HMAS Melbourne in December 2008 and HMAS Newcastle in September 2009. HMAS Newcastle achieved Provisional Acceptance in May 2009 and achieved Acceptance in September 2009. The Team Trainer achieved Acceptance in September 2009 and the Warfare System Support Centre (WSSC) achieved Acceptance in December 2009. An 'incremental' approach for both Initial Operational Release (IOR) and Operational Release (OR) was agreed by the Defence Materiel Organisation (DMO) and Navy as the most pragmatic means to bring the class into operational employment. This process was addressed in three phases.

Significant progress resulted in the achievement of contractual acceptance of all four FFGs and facilitated the decision by the Chief of Navy to approve IOR of this capability and begin planning for its operational employment. All four FFGs were offered for IOR in November 2009 and Chief of Navy endorsed the IOR in January 2010 with a caveat on the Torpedo Defence System. Also, the Government agreed to remove the FFG Upgrade Project, from the list of Projects of Concern as the issues and problems that had made it a Project of Concern were remediated sufficiently that a path to completion is clearly defined.

The RAN is inducting the FFGs into a formal program of Naval Operational Test and Evaluation to fully characterise the performance of the ships in a variety of contemporary operational environments. HMAS Sydney is lead ship for this program with further testing scheduled for third quarter 2010. This Test & Evaluation program supports the tuning, configuration and augmentation of the systems in ships deploying into operational areas to ensure that they have the best available capability to meet the threats in those regions.

The ships are currently being operated by the RAN with HMAS Newcastle deployed to Canada and then to participate in the biannual international exercise RIMPAC 2010 in Hawaii in July 2010. HMAS Melbourne is programmed to deploy operationally in the third quarter of 2010.

Uniqueness

This project presents challenges due to the complex and extensive weapon, sensor, combat, and command and control systems upgrades that are required to be integrated into an Australian developed combat data system architecture. The integration work includes the world's first FFG installation of a Vertical Launching System for firing Evolved Sea Sparrow Missiles and Mk 92 Mod 12 fire control system into the Adelaide class FFG.

The FFG upgrade project includes the development of the Australian Distributed Architecture Combat System, which contains over one million source lines of newly developed computer code. This software development is occurring in conjunction with electronic system hardware development and integration. The Australian Distributed Architecture Combat System processes and displays radar, sonar and electronic support system data, assisted by a new Australian developed Radar Integrated Automatic Detection and Tracking system.

Major Challenges

Significant challenges were progressed in conjunction with progressive delivery of the capability.

Initial Operational Release for the upgrade capability was approved by Chief of Navy in January 2010 with the exception of the Torpedo Defence System and, by association, the Le Scut torpedo decoy, as the effectiveness of the decoy is dependent upon information provided by the torpedo detection and classification system.

This decision initiated the next significant challenge which is the formal Naval Operational Test and Evaluation (NOTE) of the delivered FFG capabilities. This is a period in which the operational effectiveness, suitability and the attendant levels of risk associated with operating the ships in a wide variety of roles will be defined.

Also the acquisition and installation requirement for an underwater active decoy system was initiated to satisfy operational preparedness requirements but with due regard to the remaining service life of the ships of the class.

Current Status

This was a Project of Concern in 2009-10.

Cost Performance

Project cost estimate remains within the current approved Project budget.

Schedule Performance

The Prime Contractor has continued to perform to the revised schedule approved in June 2006 and has met the majority of its obligations under the Contract including achieving Acceptance of the FFGs, the WSSC and the Team Trainer.

A Contract (CAPO 605178NQ) Close Out Deed was executed in June 2010 that specifies the Prime Contractor's remaining obligations under the Contract which are to be performed on the terms of the Contract by 28 February 2011.

Capability Performance

All four FFGs have now received their upgraded equipment. Since Acceptance, HMA Ships Sydney, Melbourne, Darwin and Newcastle have been in operation with Navy and are now endorsed for IOR with the Torpedo Defence System and LeScut decoy excluded.

Contractual acceptance of HMAS Sydney and Darwin and upgraded software was achieved in November 2008 in accordance with the provisions of a Deed of Amendment. The requirements of the Deed were met and Contractual Acceptance of FFG Upgraded Software was achieved in May 2009 following closure of open software problem reports. Contractual Acceptance of HMAS Melbourne was achieved in December 2008. HMAS Newcastle, the last FFG to enter the program, achieved Provisional Acceptance by the DMO and was handed back to Navy in May 2009.

Tactical Data Information Link, LINK 16 functionality testing was achieved in August 2008 and assessed suitable for operational use under waiver. The first 'live' LINK 16 Data Link to be established by a RAN unit was achieved in January 2009 between HMAS Melbourne and various US Navy units.

A three phased 'incremental' approach for IOR and OR has been agreed by the DMO and Navy as the most pragmatic means by which to bring the FFG class to full operational employment. Phase 3 was achieved in January 2010 and IOR by Navy for the FFG Class has been achieved with one caveat. Final Contractual Acceptance from the Prime Contractor was substantially achieved in June 2010.The Contractor's remaining obligations under the Contract, which are necessary to ensure all data and supporting material is provided and due diligence activities are completed, is to be performed by 28 February 2011 as specified in a Contract Close Out Deed.