Annex A (continued)
The WATCHKEEPER programme will enhance the ability
of UK Armed Forces to undertake a range of Intelligence, Surveillance,
Target Acquisition and Reconnaissance tasks through a combination
of Unmanned Aerial Vehicles (UAVs) and ground stations. It will
contribute to the delivery of network-enabled capability.
The project is currently in the assessment phase,
examining potential solutions from two competing contractorsThales
and Northrop Grumman. Recommendations on their proposals for demonstration
and manufacture and on the preferred solution/supplier are expected
in mid 2004.
WATCHKEEPER will deliver a new capability to
undertake a wide range of Surveillance, Reconnaissance and Target
Acquisition tasks in support of Land Manoeuvre Commanders from
Battle Group to Divisional level.
Trade-off studies leading to the current position
have helped to balance performance, cost and time with elements
of the capability such as manpower and training. Such trade analysis
will continue through to the submission of the Main Gate business
A number of different ways of meeting the WATCHKEEPER
capability have been examined. The solution is likely to consist
of two different types of UAV supported by an integrated common
ground station. No decision has been made on the number of systems
to be procured; this will be determined once the preferred option
has been selected and confirmed towards the end of the assessment
phase. For planning purposes, the system has been assumed to consist
of sufficient ground stations, platforms and sensors capable of
meeting the requirements for the Ground Manoeuvre Phase of the
Strategic Defence Review
The Strategic Defence Review highlighted the
need to enhance the capability for the Armed Forces in terms of
its ability to undertake Intelligence, Surveillance, Target Acquisition
and Reconnaissance (ISTAR) tasks. WATCHKEEPER is considered one
of the capabilities to achieve that aim. The New Chapter of the
SDR published in 2002 stated that this programme remains a central
element of the UKs commitment to UAV capabilities and demonstrates
our commitment to delivering Network Enabled Capability aspirations.
The SDR New Chapter also stated our intention to accelerate the
The WATCHKEEPER programme will deliver the capability
required to provide accurate, timely and high quality imagery
and imagery intelligence (IMINT). This capability will be provided
by integrating a combination of Unmanned Air Vehicle (UAV) Systems
into the command and control architecture. The IMINT will be collected,
collated, exploited and disseminated to satisfy land manoeuvre
commanders' critical information and intelligence requirements
throughout a range of environments and across the spectrum of
Equipment to be Replaced and In-Service Date
WATCHKEEPER is a new wide-ranging capability
that will subsume the capability currently provided by the Phoenix
system. Any future role for Phoenix is being considered as part
of the assessment phase as to the most cost effective solution(s)
for WATCHKEEPER. The ISD for WATCHKEEPER will be finalised as
part of the current assessment work. Following the SDR New Chapter,
our intention is to advance the ISD from an original assumption
of an Initial Operating Capability of around 2007 to early 2006.
WATCHKEEPER is in its assessment phase where
operational and technical risks are being identified and minimised.
This phase will look at a variety of acquisition strategies to
establish the most cost-effective way of achieving the capability.
Manpower implications and the associated training
requirements are being assessed and will be an important factor
that will influence the final solution.
The WATCHKEEPER solutions are likely to use
available technology and it is expected that they will be non-developmental
in nature. The opportunities for collaboration in the initial
stages of WATCHKEEPER are accordingly considered low. However,
co-operation continues among allied nations on matters of requirement
definition, technology, operational experience and acquisition.
Whilst it is likely that the major components
of the WATCHKEEPER air vehicles will be based on existing off-the-shelf
components, elements of the ground station might be of interest
to other nations.
The two Prime Contractors selected to undertake
the remainder of the assessment phase, comprising a series of
System Integration and Assurance activities, are Thales UK and
Northrop Grumman. The current phase of work is scheduled to be
complete in early 2004. Following this their bids for Demonstration
and Manufacture will be assessed and one Contractor will be nominated
as the preferred supplier.
The WATCHKEEPER programme was initiated coincident
with the drive for Smart Acquisition. As a result considerable
emphasis has been placed on achieving a capability that is considered
in terms of whole life cost and cost of ownership over the expected
life of the capability.
Milestones and Costs
The acquisition costs for WATCHKEEPER are forecast
to be some £860 million (resource base at outturn prices).
The Main Gate submission is planned for mid 2004 with the aim
of introducing an initial operating capability in early 2006 (reflecting
New Chapter work).
A number of methods of in-service support are
being examined as part of the assessment phase. Possible solutions
include various levels of contractor logistic support and the
supply of spares direct to the field force. A Training Needs Analysis
is being conducted to establish requirements in this field.
The key element of WATCHKEEER interoperability
will be the ability for the ground architecture to disseminate
information collected by the aerial vehicle to other systems,
both within the UK Armed Forces and with our allies. During the
assessment phase, considerable attention is being given to the
integration of WATCHKEEPER within the wider communications infrastructure.
In-Service Life and Further Development
Options are being considered how this might
best be managed over a period of 30 years. It is likely that this
will be achieved through a programme of incremental acquisition
with the opportunity for technology insertion aimed at meeting
emerging threats. A separate project, the Joint UAV Experimentation
Programme (JUEP) is being considered to examine the role of UAVs
beyond that introduced by WATCHKEEPER and will inform the UKs
The A400M transport aircraft will replace those
C130K Hercules transport aircraft, not already replaced by 25
new C-130J aircraft. The Secretary of State announced on 16 May
2000 [Hansard col. 150] the Department's intention to order 25
A400M aircraft in the initial launch of the A400M collaborative
programme to fulfil our long-term outsize airlift requirements
from the latter part of the decade. We have leased four Boeing
C-17 aircraft to improve our strategic airlift capability until
A400M enters service.
The eight partner nations signed Inter-Governmental
Arrangements on 18 December 2001 which enabled nations to authorise
OCCAR to issue a contract to Airbus Military (AM) for the development
and manufacture of A400M subject to Germany obtaining appropriate
funding. This contract has not yet entered force pending agreement
on revised arrangements reflecting reduced aircraft quantities
for Germany. Germany has yet to provide unqualified financial
commitment in order to allow new Inter-Governmental Arrangements
to be signed by the partner nations. This could take place in
The Staff Requirement to replace the RAF's Hercules
C130K transport aircraft was endorsed in 1993. In July 1997, we
announced the intention to rejoin the collaborative European Future
Large Aircraft project (as A400M was then called). The associated
European Staff Requirement (ESR) matches and in some areas exceeds
the original UK requirement. It specifies a larger cargo carrying
volume, a greater maximum payload, and a higher cruise speed.
It includes the ability to operate from well established airfields
and semi-prepared rough landing areas in extreme climates and
all weather by day and night; to carry a variety of vehicles and
other equipment, freight, and troops over extended ranges; to
be capable of air dropping paratroops and equipment; and to be
capable of being unloaded with the minimum of ground handling
The Strategic Defence Review (SDR) confirmed
the need to replace the capability provided by the Hercules and
concluded that an outsize airlift capability was required to support
the deployment of the Joint Rapid Reaction Force (JRRF). The latter
requires movement of items such as the Attack Helicopter and certain
engineer equipment but not, for example, Challenger 2, AS90, or
armoured bridge layers. This outsize lift capability was consistent
with the requirements for FLA set out in the ESR.
To minimise the impact of cost increases caused
by a number of changes by other nations both to offtake and the
timing of deliveries, in late 2001 the UK negotiated a restructured
delivery schedule; this resulted in a one-year delay to the ISD.
An incremental acquisition of certain configuration items for
the tactical role was also agreed although subsequently provision
for the more important of these (Defensive Aids Sub-System (DASS))
was reinstated to the early deliveries in the light of operational
The A400M launch order will be for 180 aircraftnational
offtakes are as follows:
|Belgium||8 (including one on behalf of Luxembourg)
Strategic Defence Review
The SDR confirmed the need to replace the Hercules capability
and deliver an outsize airlift capability as specified in the
ESR. SDR New Chapter reconfirmed this.
The A400M will provide tactical and strategic Airlift Capability
to all three Services in peace, crisis and war. In crisis or war,
the A400M will be employed on inter- and intra-theatre air transport
tasks, primarily in support of the Joint Rapid Reaction Force.
The only technical requirement that remains to be specified fully
is part of the DASS, specifically the Directed InfraRed Countermeasures
systemthis is a new technology with great potential but
which could not be adequately defined at this stage and will be
examined by AM during development. The aircraft will enter service
with significantly more tactical capability than the C130K it
replaces, and will achieve a day/night poor weather hostile environment
capability by 2011.
Equipment to be Replaced and In-Service Date
Of the fleet of 55 Hercules C130 that entered service in
the 1960s, 25 have been replaced by C-130J aircraft. The balance,
and the outsize airlift capability provided in the short term
the lease of 4 C-17 aircraft, will be replaced by the A400M (although
the need to retain a C-17 capability, in addition to A400M, is
being reviewed in light of a desire to enhance still further our
overall airlift capability). We expect the A400M to enter RAF
service in 2011, with existing aircraft replaced progressively
from that date.
On 18 December 2001 an MOU was signed by the partner nations
and a contract issued to Airbus Military, both subject to Germany
obtaining full funding by 31 January 2002. This did not occur
and the MOU and contract lapsed without being activated. Although
an approval granted by Germany's Bundestag Budgetary Committee
in March 2002 (for
5.1 billion) was sufficient for 40 aircraft, in the absence of
satisfactory guarantees on securing the outstanding amount, the
programme could not proceed. Following a defence procurement spending
review, Germany announced in December 2002 that it wished to reduce
its offtake from 73 aircraft to
The total offtake, across all partner nations, is now 180
aircraft, a number that Airbus have long cited as a minimum for
launching the programme.
It is expected that Germany will gain full funding approval
in May 2003 following which a new MOU will be signed by the partner
nations and the contract will then be bought into effect. This
represents a 16-month delay from the original contract signature
on 18 December 2001 and, although industry have been working at
risk during this period, the UK's approved 2010 ISD can not be
sustained and as a consequence is expected to be slipped to 2011.
Measures to mitigate the impact on the overall military airlift
capability are being considered (eg extension of C130Ks).
On 4 September 1997, the seven collaborating European nations
issued a Request for Proposals for FLA to Airbus Industries against
the agreed ESR. Each nation specified its required in-service
date, expected off-take, support needs and other variables. The
aim was to place a fixed price contract for acquisition and elements
of support for the first 10 years. The contract was to be placed
by OCCAR and embraces many aspects of Airbus's proposed commercial
Studies in 1996 examined various options to meet the HRR2
requirement, including procurement of C-130J, FLA, C-17, and a
mixed fleet of C-130J and C-17. These studies indicated that none
of the options could be ruled out, but it was not possible to
draw definitive conclusions in the absence of firm costs. In order
to secure the benefits of competition, a further Request for Proposals
was issued in July 1998 by UK, FR, SP and BE to Airbus, Boeing
and Lockheed Martin. This quoted a potential UK requirement for
up to 45 FLA and sought prices for stated equivalent numbers of
C-17, and mixed fleets of C-17 and C-130J. Final UK numbers were
decided in the light of further operational analysis of the requirements,
and cost-effectiveness trade-offs between the solutions, taking
into account the fact that A400M provided a 50% increase in airlift
capability, compared with the Hercules.
On the basis of the priced proposals received Ministers announced
their decision on 16 May 2000 to make a commitment to procure
25 A400M aircraft from Airbus Military. In selecting A400M as
the chosen solution, the greater industrial benefits and technical
compliance of the European solution were taken into account.
Alternative Acquisition Options
Contenders in the collaborative competition included the
Airbus A400M and the existing C-17 and C-130J aircraft, both available
as commercial off-the-shelf purchases. Germany, a non-participant
in the four-nation competition, also considered the Antonov An-7X
(a customised version of the Russo-Ukrainian An-70), along with
France, Spain and Italy. The UK would have been prepared to assess
a compliant tender for AN-7X offered by a Western prime contractor
had it been proposed in response to the 31 July 1998 Request for
Proposals, but no such bid was made. The C-130J cannot fulfil
the "outsize lift" element of the ESR and would only
be considered as part of a mixed fleet solution.
The UK, Belgium, France, Germany, Italy, Spain and Turkey
announced on 27 July 2000 (the Farnborough Declaration) that they
intended to procure numbers of A400M aircraft sufficient to launch
the programme. Since then, Italy decided not to proceed with the
programme (and PO rejoined the programme). The partner nations
subsequently signed a Memorandum of Understanding on 18 December
2001 committing to a total offtake of 196 aircraft: Belgium 7
aircraft, France 50 aircraft; Germany 73 aircraft, Luxembourg
one aircraft in co-operation with Belgium, Spain 27 aircraft,
Turkey 10 aircraft (reduced from 26), Portugal 3, and the UK 25
aircraft. Portugal then suspended its participation in March 2002
and allowed the deadline for re-entry to pass without rejoining.
Germany reduced its offtake to 60 aircraft in December 2002. Total
offtake now stands at 180 aircraft. The concept of a basic common
standard aircraft with a range of capability options provides
each of the air forces with an aircraft meeting their requirements
Management of this programme will be undertaken by OCCAR
on behalf of the participating nations. OCCAR was created to provide
improvements in the management and effectiveness of collaborative
defence equipment programmes. The organisation has been fully
involved in the preparatory work for the A400M inter-governmental
arrangements in anticipation of taking on this programme. We strongly
believe that OCCAR offers the opportunity for significant improvements
in the efficiency and effectiveness of European co-operative procurement.
This view was strongly endorsed by the NAO in their March 2001
report on "Maximising the benefits of defence equipment co-operation".
The A400M Programme Committee (consisting of senior officials
from each participating nation) will direct and oversee the programme.
Airbus Military (AM) believes that there is a significant
market for the A400M beyond the European collaborative partners.
AM estimates of the scale of this market vary, but could be around
200 aircraft. Australia and Canada appear the most likely early
export targets for AM.
The strategy for A400M has been to adopt a "commercial
approach" whereby the emphasis is on the prime contractor
to secure a cost-effective solution that meets our requirements.
The A400M contract to be placed with AM will be for the design,
development, production and delivery of the complete aircraft,
including its engines and all other systems. The contract does
not prescribe any national workshare arrangements. Airbus Military
is free, therefore, to select its suppliers on grounds of performance,
time and cost, thereby ensuring that we obtain best value for
money. Consequently, there are no impediments to British companies
securing valuable sub-contract business. It is estimated that
the A400M programme will create 8,000 indirect jobs in the UK
of which 2,500 will be long-term skilled in the aerospace sector
(notably in design and advanced manufacturing).
A key element of Airbus's successful record in meeting challenging
delivery timescales is their system of centres of excellence.
As a result, Airbus UK has become the Airbus centre of excellence
for wing design. The key location will be Filton where Airbus
UK will not only exercise overall management of the wing and its
design, but also the entire assembly, full equipping and delivery
of wings to the aircraft final assembly line in Seville (Spain).
Rolls Royce together with SNECMA (France), MTU (Germany)
and TP (Spain) has formed a Special Purpose Vehicle (SPV) to bid
for the A400M engine. The SPV is registered as Euro Prop International
(EPI). EPI have proposed a new engine designated TP400-D6. An
engine bid has also been received from Pratt & Whitney (Canada)
(PWC). Given the "commercial approach" adopted for this
programme, the nations are therefore unable to direct the selection
of a particular engine. However, the contract will require Airbus
Military to use "reasonable endeavours" to place with
industries of the participating nations a level of programme work
in proportion to their offtake.
The collaborative approach has enabled nations to acquire
a capability that otherwise would have been unaffordable individually.
The commercial approach will bring proven Airbus best practice,
from civil aircraft development and production, to the programme.
There will be no separate development contract: AM will be contracted
to deliver aircraft and be responsible for the risk management
associated with development. This single-phase approach circumvents
the potential delay evident in collaborative programmes needing
production approval. In respect of aircraft certification, the
intention is to adopt an approach based on civil Joint Airworthiness
Requirements, supplemented by military requirements where necessary.
We have reviewed the potential for incremental acquisition
of the A400M capability. Whilst the DASS will be available from
the first aircraft, other capabilities for example, Future Air
Navigation System (FANS), Forward looking Infra-Red (FLIR), Automatic
Direction Finding (ADF) and Civil SATCOM will be introduced later
in the delivery programme. The UK has the option to re-instate
early provision of these capabilities up to and after delivery
of the aircraft should operational need render this necessary.
The A400M project is entering the single phase Development
and Manufacture contract.
Milestones and Costs
Key forthcoming milestones are:
|Contract activation||expected May 2003
Total estimated costs for the acquisition and initial support
of the A400 million are of the order of £2.4 billion for
acquisition and initial support. (Previously reported costs of
£3.5 billion, as agreed at Main Gate in May 2000, covered
costs over a 17-year period, including in-service support.) No
significant costs have so far been incurred.
AM proposes providing a range of in-Service support options,
according to the level of contractor support required. The in-Service
support strategy likely to be selected by the UK is that RAF personnel
carry out all first line maintenance and on-aircraft second line
maintenance; third line on-aircraft maintenance and second and
third line maintenance off-aircraft will be undertaken by industry.
This strategy will ensure flexible and responsive support to operations,
especially deployed operations, whilst making best use of industry
experience and resources for the conduct of the more specialised
and resource intensive tasks. Opportunities for common European
support and training will be actively investigated in conjunction
with our partner nations and OCCAR.
Front Line, Storage and Reserve
No firm decision has yet been taken on the precise allocation
of roles within the A400M fleet, which will be considered in due
coursethe Concept of Employment is currently being developed.
Future users of the A400M will include Belgium, France, Germany,
Spain, Turkey, Luxembourg and the UK.
Disposal of Equipment Replaced
The 25 Hercules C-130K aircraft that are being replaced by
C-130J will be returned to Lockheed Martin as part of the HRR1
procurement package. No decisions have been made on the subsequent
disposal of the remainder of the C-130K fleet.
The Staff Requirement assumes an in-service life of 30 years.
No specific options are being considered at this stage for
long-term development. Improvements to avionics and other systems
will be required over the life of the aircraft to maintain and/or