Defence Update

It became clear in April that the other contending team led by the aircraft’s manufacturer, General Dynamics, had been dropped from contract considerations. GD’s team included Aerospace Technologies of Australia (ASTA), British Aerospace Australia and Computer Sciences of Australia (CSA).

The deletion of the GD team from contention is seen as a major blow to ASTA in particular, who obviously needs a higher military workload as the F-18 Hornet fighter assembly and test line has ended and work on the second batch of the Royal Australian Navy’s Seahawk helicopters is well in hand.

But as some would say: “Winners can smile; losers can please themselves”. The Rockwell led team was told last month it was the preferred tenderer. Its team members are Hawker de Havilland, Australia’s major aerospace company, C-3 Pty Ltd, a systems and software company 70% owned by AWA Ltd, AWA Defence Industries (SA), Ansett Technologies and Honeywell Aerospace and Defence, Australia. But being told the team is the “preferred tenderer” doesn’t necessarily mean the contract is close to being let and signed, according to senior Defence sources. In fact at the time of writing the question of letting the contract depends on sorting out the funding within the RAAF and the Department of Defence. That could mean finding about $150 million from other Defence financial resources to allow the project to go ahead and have the contract signed. That $150m is said to be the shortfall on what was the program’s initial funding allocation, bearing in mind some other but related factors.

For instance, if the RAAF had obtained permission to upgrade the 22F-111Cs to the full specifications sought, then the program would cost more than $400m at current prices. The first factor entering into the cost equation is that, apart from the acquisition of the precision Pave Tack bombing system, the update required modification of the specialised radar systems.

On June 28, 1989 the then Defence Minister, Mr Kim Beazley, announced that two United States firms had been awarded contracts worth $64m to bring the radars up to the latest standards. Texas Instruments was awarded the contract to upgrade the Terrain Following Radar and General Electric the contract to modernise the Attack Radar System. We understand the initial funding allocation was $24m for these two aspects. Instead, at one stage the cost was estimated at $86m and then cut back during negotiations to $64m. Nevertheless, it represented a $40m increase in estimates for the total F-111C upgrade program. That has meant further ‘stress’ on the actual cost of the Avionics Update which in general terms means changing from the analogue system installed in the 1960s to digital systems. It has meant the actual Avionics Update requires well in excess of $300m and that about half of it was not provided for in the original estimates.

Just what happens now remains to be seen. The Defence Department has been trying to sort out the financial priorities and whether underspending on some other projects can be switched to this one which is of very high priority in Air Force circles.

From the Secretary and the Chief of the Defence Force, the matter has to flow to the new Defence Minister, Senator Robert Ray, and thence presumably to Cabinet. It could even be a matter for the Budget Cabinet which meets in the first half of July- if not settled before then.

As the ‘preferred tenderer’ the Rockwell team was invited to negotiate on final contract details, including pricing and options. The first of the precontract negotiations took place at Rockwell’s Anaheim, California headquarters in late April. The final negotiations then were expected to begin late in May.

The program envisages updating the 18 F-111C strike planes and the four reconnaissance version aircraft. It should be noted that Rockwell already has a contract from the US Air Force to update the avionics on its F-111D and F models. The plan is that the first RAAF F-111C to be updated will have the modifications undertaken in the United States. The remaining work is anticipated to be carried out in Australia.

The initial short list bids by the Rockwell and General Dynamics teams closed last year and were evaluated by a joint RAAF/ Defence team led by GroupCaptain Mike Lorimer. After a followup overseas visit to answer questions thrown up by the bids, the team’s report and recommendation was made before Christmas. It then has gone the rounds of various senior level Defence committees including the Force Structure Policy and Programming Committee (FSPPC) and the Force Development Analysis Division.

So while the Rockwell team looks like it has the contract sown up as the prime contractor to provide and fit modern navigation computers, cockpit displays, communications systems and flight control computers, it has had to hold its collective breaths that the client will sign on the dotted line. The RAAF would say

Amen to that!