Select Committee on Defence Written Evidence

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 contractors—Thales and Northrop Grumman. Recommendations on their proposals for demonstration and manufacture and on the preferred solution/supplier are expected in mid 2004.

Operational Requirement

  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 case.


  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 campaign.

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 WATCHKEEPER programme.

Military Capability

  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 conflict.

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.

Acquisition Approach

  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.

Export potential

  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.

Industrial Factors

  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.

Smart Acquisition

  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).

In-Service Support

  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 future requirements.


  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 May 2003.

Operational Requirement

  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 equipment.

  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 experience.


  The A400M launch order will be for 180 aircraft—national offtakes are as follows:

Belgium8 (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.

Military Capability

  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 system—this 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).

Acquisition Approach

  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 approach.

  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.

Export Potential

  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.

Factors Industrial

  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.

Smart Acquisition

  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.

Acquisition Phases

  The A400M project is entering the single phase Development and Manufacture contract.

Milestones and Costs

Key forthcoming milestones are:

Contract activationexpected 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.

In-Service Support

  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 course—the 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.

In-Service Life

  The Staff Requirement assumes an in-service life of 30 years.

Development Potential

  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 enhance capability.

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