Select Committee on Defence Tenth Report


EUROFIGHTER ARMAMENTS

The Beyond Visual Range Air-to-Air Missile (BVRAAM)

•  Competition between Raytheon and Matra BAe Dynamics

•  UK-led programme, but it had collaborative opportunities with the US (had one missile option been chosen) or with up to five European countries (with the other option).

•  Programme's first approval by the MoD: October 1995.

•  Originally planned in-service date: March 2005

•  Latest estimate of in-service date: 2008

•  Cost: c£1 billion.


11. Production contracts for the first batch of 148 Eurofighters (including 55 for the RAF) were signed by the four collaborative partners in September 1998,[30] and the first of the RAF's 232 aircraft will be delivered in June 2002.[31] This definition of the formal in-service date—the delivery of the first aircraft—relates to 'procurement factors' agreed amongst the Eurofighter partners,[32] and Eurofighter's real operational availability will only follow later.[33] Against either date, however, the Beyond Visual Range Air-to-Air Missile (BVRAAM)—Eurofighter's 'primary' air-to-air weapon for its air superiority role[34]—will not be available for some years after the aircraft enters service.

12. The requirement for the BVRAAM involves the ability for the fighter aircraft to achieve a large 'no escape zone' against manoeuvring targets during beyond visual range air-to-air combat.[35] With no off-the-shelf missile available to meet the requirement,[36] the MoD invited bids from nine firms in 1995. Each of the two bids received—from Matra BAe Dynamics[37] and Raytheon—contained 'major technical risks',[38] however, and each firm was given a 'project definition and risk reduction' contract in August 1997. Best-and-final offers were received by the MoD in September last year,[39] and last month the Secretary of State announced that the MoD's preferred contractor was Matra BAe Dynamics who were offering a 'Meteor' missile.[40]

13. The BVRAAM competition and its outcome raised serious issues. These include: whether the MoD should seek a solution which offers a full capability at the outset, or whether it should follow a more incremental acquisition approach; the implications for the development of a European missile capability to compete against the dominance of Raytheon; and the implications for exports of Eurofighter itself. We explore these questions below.

FULL V. INCREMENTAL ACQUISITION

14. BVRAAM is designed to meet threats that RAF Eurofighters will face when the missile enters service[41] in around 2008,[42] and will allow the aircraft to engage targets at much longer range than any current RAF missile.[43] When the MoD had sought final bids for the missile, it offered both bidders—Matra BAe Dynamics and Raytheon—the opportunity to propose alternative strategies which would have involved reaching that full capability on an incremental basis—providing an interim capability which could be later upgraded.[44] The Meteor bid from Matra BAe Dynamics was for the full capability sought by the MoD, and offered a ram-jet missile which it is claimed will have a range in excess of 100km, a sustained speed of over Mach-4 (it does not slow down as it travels) and high agility in its 'end-game manoeuvring'.[45] Raytheon on the other hand submitted two offers—'FMRAAM'[46] for the full capability, and 'ERAAM+'[47] which would involve a jointly funded UK/US development to provide an intermediate capability.[48]

15. When he gave evidence to us, CDP had yet to debrief Raytheon on why its bid had not been successful. He was therefore, understandably, a little reluctant to provide us with the full details at that time, though he indicated that he would do so at a later date.[49] Once any debriefings are completed, we expect the MoD to provide us with its more detailed assessment underlying its choice for the missile. CDP did however tell us unambiguously that for the full capability, "the Meteor solution was technically far better than the [FMRAAM] solution ... It was conclusive".[50] He could not tell us, however, what the difference in price was.[51] As regards the incremental approach, had the MoD opted to develop the ERAAM+ jointly with the US Department of Defense it would have been faced with a second step of bringing it up to the full BVRAAM capability—a prospect that the MoD were not comfortable about.[52] Sir Jeremy pointed out that a potential difficulty had revolved around the different missile requirements of the two countries, with the US looking to integrate their missile with a completely different type of aircraft.[53] CDP told us that the MoD—

    ... was essentially looking at the cost of an ERAAM+ — the intermediate capability Raytheon missile — plus some extremely difficult to estimate costs to bring ERAAM+ up to full ... compliance [with the requirement], against the Matra BAe Dynamics Meteor which went the full way to total compliance ab initio. On that basis, Meteor is cheaper.[54]

16. In the absence of more detailed information being available on the relative merits and costs of the full-capability Meteor and the incremental ERAAM+, we can only note the MoD's conviction about the benefits of the European solution. The incremental approach to capability acquisition is that now favoured by the MoD's smart procurement initiative, however, and while there may be good technological grounds for not favouring the Raytheon bid for the Eurofighter missile, uncertainties about its cost should not have been a determining factor against it. If the MoD is to get the full benefits of smart procurement, it will have to develop the tools and techniques it will need to assess rigorously the costs and benefits of bids which offer different routes to the full capability sought, so that it can fully demonstrate the financial case for the choices it makes.

A EUROPEAN MISSILE CAPABILITY, AND EXPORT PROSPECTS

17. CDP listed the headings under which the MoD assesses procurement competitions.[55] These included the question of whether the selection of suppliers would allow UK industry to maintain a competence in that area, which would permit future participation in collaborative programmes.[56] In the case of the BVRAAM programme, the implications of the choice of contractor for the future of the European missile industry were particularly significant. Raytheon has long had a global dominance in this field, and Matra BAe Dynamics see the success of Meteor as a catalyst for establishing a more powerful European counterweight to that dominant position, not least because Meteor will be the focus for the ongoing merger of Matra BAe Dynamics, Alenia Marconi Systems (a 50:50 joint venture between BAE Systems and Italy's Finmeccanica), France's Aerospatiale Matra Missiles and Germany's LFK.[57] The short term employment implications directly associated with the BVRAAM selection may be of less strategic consideration, but the MoD considered that Meteor would involve a greater number of jobs in the UK than those implied by Raytheon's bid, and believes that these would also be of higher quality.[58]

18. Another factor listed in the MoD's criteria for assessing prospective acquisitions is the export potential for UK industry. In the case of the BVRAAM, however, there are also wider implications — for the Eurofighter programme itself. Since Meteor will be developed with other European defence firms, the Eurofighter partners should have some assurance that exports of the aircraft will not be impeded by the export controls or other policies of the BVRAAM supplier nations. The BVRAAM partners include the four Eurofighter nations plus Sweden and France, and these six countries signed the Letter of Intent in July 1998[59] which amongst other things includes provisions not to hinder exports. Although France and Sweden could conceivably have reason to attempt to restrain exports if their Rafale or Gripen fighters were in competition with Eurofighter, this seems a remote risk since the four Eurofighter partners might constrain in reciprocal fashion any Meteor exports linked to those aircraft. CDP also believed that Matra BAe Dynamics' joint French and UK ownership could provide further assurance against any risk of export constraints being applied.[60]

19. Had the Raytheon bid been selected, the US might have had a veto over Eurofighter exports to third countries. CDP told us that—

    There is no question that the United States Government absolutely understood our concerns on this point. They gave us very strong assurances that they would have no difficulty in the future allowing exports of ERAAM+ to those countries to which they were currently persuaded to allow themselves to export AMRAAM missiles (the grandfather of ERAAM+). ... It is of course the future we are talking about. ... Subsequent [US] administrations are not formally bound by such assurances ... and the big worry at our end was what would happen if a Eurofighter armed with this missile was in competition with a United States combat aircraft armed with a missile wholly under their control. Yes, we might have had export clearance. Would it have come as quickly as the other one? We do not know.[61]

Perhaps somewhat optimistically, Matra BAe Dynamics believe that Boeing's inclusion in the Meteor consortium will give the missile a foothold in the US market,[62] where it might be fitted on non-stealthy aircraft like the F-15 and F/A 18.[63] It would be a testament to US willingness to encourage competition if this proved to be the case—and might enhance future prospects for US bids for contracts in Europe.

THE FUTURE MANAGEMENT OF THE BVRAAM PROGRAMME

20. In announcing Meteor's selection last month, the Secretary of State said that "our decision ... is subject to formal confirmation of commitments by our partner nations to a collaborative programme ... [which] we hope to conclude by the end of this year".[64] In practice, the programme would probably still go ahead if one of the smaller partners did not give their commitment in the negotiations for a Meteor development contract, but participation by some of the partners at least would be needed.[65] The contract being negotiated would involve arrangements for sharing development costs, and would reflect the number of missiles to be taken by each country. In round terms, the division currently envisaged is 30-40% by the UK, 20-30% by Germany and around 10% by each of the smaller prospective partners.[66] Although this collaboration smacks a little of the old and discredited system of juste retour, it may be able to avoid some of its worst features. First, CDP told us, BVRAAM development work would be divided between the partner countries' industries on "broadly" the same scale as their share of the development costs and likely missile orders. Work would not be "directed" in the way that traditional juste retour workshare agreements have required in the past,[67] and instead the prime contractor would be given "reasonable guidance".[68] Second, it is being clearly led by one country—the UK.[69] The UK has managed the competition so far, keeping other perspective partners informed, and the UK will continue to take the lead role.[70] This has meant that the MoD has not had to adjust the performance sought from the missile to reflect other partners' requirements.[71] Only the UK has so far signed up to the production, as well as the development, of the missile, so it could not yet be managed under the auspices of OCCAR (which promotes competitively awarded work that is balanced over several procurement programmes, rather than just retour for each one individually).[72]

21. The in-service date for the missile—defined as the first unit equipped with 72 missiles[73]—has slipped by three years mostly because of technical risk considerations, and is now expected by the MoD to be 2008.[74] The missile's overall procurement cost is estimated by the MoD to be around £1 billion,[75] mostly falling after 2006-07[76] (MoD expenditure on the BVRAAM programme up until March 2000 was only £21 million).[77] When we asked CDP what confidence he had in the current in-service date for the BVRAAM, he explained that such predictions were now based on a 90% confidence level.[78] He noted that "difficulties arise rather more frequently than difficulties disappear",[79] and the 90% confidence date provided a conservative estimate. In the case of the BVRAAM, the date was "substantially after the date that the manufacturer is promising that he will deliver it",[80] and will not create false expectations in the RAF.[81] Having now selected Meteor, the MoD will be negotiating a contract with Matra BAe Dynamics and, CDP assured us, "no contract is going to be more sharp with the contractor than the BVRAAM delivery programme".[82] It will have break points linked, for example, to flight tests and other demonstrable achievements, and focussed on the successive development of the ram-jet motor, the guidance systems, the data-links and electronic counter-measures.[83] We will be monitoring the MoD's progress against these milestones as part of this rolling review of major procurement projects.

22. Eurofighter needs the BVRAAM capability to give it the air superiority for which it is designed. We therefore welcome the fact that the MoD has now selected a missile and contractor to provide that capability. The Meteor missile has some clear advantages over its Raytheon competitor—it appears to offer the more militarily effective solution; it should help rationalise and consolidate the European missile industry, and provide future competitions with a counterweight to US dominance in this field; and it entails a lower risk of constraints on Eurofighter exports. Although the programme is in its early days, it also offers the prospect of avoiding some of the problems that have plagued other European procurement collaborations, without arbitrary workshare divisions and with a clear project leadership role to be provided by the UK. The MoD needs to take advantage of that leadership role to keep momentum behind the project, including an early contract which will lock-in not just the contractor but also the commitments of our international partners. The cautious definition of the missile's target in-service date may be realistic, particularly in view of the technological challenges that will have to be overcome, but in BVRAAM's case it is a date that must be met if Eurofighter is to fulfil its potential.

The Eurofighter Cannon

23. Although perhaps the most important of Eurofighter's armaments, the BVRAAM missile is just one of a range of weapons with which the aircraft will be equipped to tackle targets at different ranges. One of Admiral Blackham's roles is to assess the appropriate weapons mix to provide the capabilities needed for Eurofighter—

24. As a result of such deliberations, the MoD has now decided not to fit the Mauser cannon on the RAF's Eurofighters in the second and subsequent batches of the aircraft, and those to be fitted to the 55 aircraft of the first batch would not be used. The Parliamentary Under-Secretary told the House—

    The Mauser 27mm cannon will be installed in tranche-1 Eurofighter aircraft for the Royal Air Force. However, we are not planning to procure stocks of spares or ammunition following our decision not to use the gun, or to fit it to subsequent tranches of aircraft ... We have assessed that the minimal operational utility of the Mauser cannon on Eurofighter in any role is outweighed by its support, fatigue and training cost implications, particularly given the capability of the advanced short-range air-to-air missiles with which the aircraft will be armed ... The advantages in deleting the Mauser cannon from our Eurofighter aircraft derive from avoiding the support, fatigue and cost implications which we would otherwise have to bear.[85]

25. Admiral Blackham told us that this decision was one of the earliest made by his newly established Equipment Capability organisation.[86] Although most comparable aircraft had a cannon (including the F-22, most variants of the Joint Strike Fighter,[87] the Rafale, the Gripen and, notably, the Eurofighters of the other three partners'airforces), he believed that the decision would have no operational impact for Eurofighter,[88] as the cannon would give the MoD no capability that it did not already have.[89] In engaging likely air threats—generally high performance aircraft built in the West or in the former Soviet Union—it was very unlikely that the RAF would not want to use a missile.[90] Even for very short range air-to-air combat the MoD were acquiring ASRAAM missiles.[91] In its written evidence, the MoD stated that—

    Since the introduction of air-to-air missiles, the gun has been used for very close range engagements where the target was inside a short-range air-to-air missile's minimum range. The improved minimum range capability and agility of the ASRAAM missiles with which the aircraft will be armed greatly decrease the likelihood of such engagements. ASRAAM, including a Helmet Mounted Sight targetting system, offers the pilot a shot with a very high probability of success in almost every conceivable situation. And were these missiles to be exhausted, it is unlikely that a cannon would be of use as the risk would remain that aircraft could be engaged by missiles from well outside the gun's range. Furthermore, in order to use the gun the pilot would have to point the aircraft directly at the target, thereby making less effective the aircraft's integrated Defensive Aids Sub-System (whose towed decoys operate best when the aircraft is not head on to the threat) for the small probability of a successful gun shot.[92]

26. The MoD does not envisage Eurofighter having a ground attack role.[93] The cannon on other current RAF aircraft have never been used in anger, even for strafing—the most likely possible scenario.[94] The MoD told us that, in such an air-to-ground role, it found it difficult to anticipate circumstances which would justify the relatively indiscriminate nature of gun firing in an age of precision-guided munitions.[95] Admiral Blackham told us that the MoD had concluded that "in the circumstances that we face today, the cannon does not represent a very sensible use of our money and does not provide a capability we really want".[96] The MoD has however already sunk £90 million into the cannon which has now been wasted. The savings from not using the gun would only be £2.5 million a year.[97] Admiral Blackham believed that that was no reason to go on sinking more money unnecessarily.[98] We are less convinced of the economic sense of this decision at this late stage of the aircraft's development, and we look to the MoD in its response to this report to provide further explanation of its rationale for not using the cannon, and how a very close range engagement capability could otherwise be provided.


30  Ev p 57, paras 9, 21 Back

31  Ev p 57, para 8 Back

32  ibid Back

33  The current target date is classified-Ev p 57, para 8; Q 71 Back

34  Ev p 86, para 5 Back

35  Ev p 86, para 1 Back

36  Ev p 87, para 10 Back

37  BAe Dynamics and Matra submitted the bid and subsequently merged as a result of their collaboration on another missile programme-'Stormshadow' Back

38  Ev p 87, para 19 Back

39  Ev p 87, para 20 Back

40  HC Deb., 16 May 2000, c149 Back

41  QQ 3, 8 Back

42  Ev p 86, para 7 Back

43  Q 2 Back

44  Q 40 Back

45  Ev p 90 Back

46  The Future Medium Range Air-to-Air Missile Back

47  The Extended Range Air-to-Air Missile-plus Back

48  Q 40 Back

49  QQ 40, 42 Back

50  Q 42 Back

51  QQ 39, 40 Back

52  Q 41 Back

53  Q 43 Back

54  Q 41 (our italics) Back

55  Q 45 Back

56  ibid Back

57  Ev p 91 Back

58  Q 45 Back

59   Seventh Report, Session 1997-98, Aspects of Defence Procurement and Industrial Policy, HC 675 Back

60  Q 49 Back

61  Q 48 (our italics) Back

62  Ev p 92 Back

63  See eg Aviation Week, 22 May 2000 Back

64  Ev p 95 Back

65  Q 55 Back

66  Q 56. The divisions anticipated by Matra BAe Dynamics themselves have a greater UK weighting-35-40% for UK; 20-25% for Germany; 10-15% each for France, Italy and Sweden; and 5-10% for Spain (Ev p 90). Back

67  Q 56 Back

68  Q 62 Back

69  Q 57 Back

70  QQ 57, 65-66 Back

71  Q 57 Back

72  Q 60 (We described 'OCCAR'-the European organisation for joint armament cooperation-in our First Report, Session 1999-2000, The OCCAR Convention, HC 69.) Back

73  Ev p 86, para 7 Back

74  ibid Back

75  Major Projects Report 1998, Session 1998-99, HC 519 Back

76  Ev p 88, para 22 Back

77  ibid Back

78  Rther than the previously applied 50% confidence level at which delay and early delivery were seen as equally likely Back

79  Q 14 Back

80  ibid Back

81  ibid Back

82  ibid Back

83  Ev p 92, para A1 Back

84  Q 18 Back

85  HC Deb., 16 May 2000, cc95-96w Back

86  Q 25 Back

87  Though not the STOVL version of the JSF-an option for the UK carriers (Ev p 93, para A4) Back

88  Q 25 Back

89  Q 26 Back

90  Q 22 Back

91  Q 33 Back

92  Ev p 93, para A4 Back

93  Q 303 Back

94  Q 28 Back

95  Ev p 93, para A4 Back

96  Q 37 Back

97  Q 25 Back

98  ibid Back


 
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