Annex A (continued)
NIMROD MARITIME
RECONNAISSANCE AIRCRAFT
4
The Nimrod Maritime Reconnaissance and attack
Mk4 (MRA4) will succeed the current Nimrod MR2 as the RAF's maritime
patrol aircraft, providing significantly enhanced Anti-Submarine
and Anti-Surface Unit Warfare capability through improved aircraft
and sensor performance. The new aircraft will also provide a substantial
improvement in availability and supportability. The aircraft,
training system and initial support are being procured from BAE
SYSTEMS (BAES) as Prime Contractor.
Following an international prime contract competition
between four companies (BAe, Lockheed Martin, Loral and Dassault),
BAE's Nimrod 2000 (later to be re-designated Nimrod MRA4) offer
was approved by EAC and Ministers in July 1996. This was the equivalent
of Main Gate approval. The contract was placed in December 1996
and following difficulties encountered by BAE SYSTEMS in meeting
the contractual programme, the contract was re-negotiated in May
1999. The contract was re-negotiated again in 2002 to take account
of the decision to reduce the number of aircraft from 21 to 18
and to secure essential tools and facilities for long term, in-service
support.
Current Position
As a result of recent, and well publicised difficulties
that BAE SYSTEMS is experiencing on the Nimrod contract, the MoD
reached an agreement with the Company on 19 February whereby the
current fixed price contract would be restructured to a Target
Cost Incentive Fee (TCIF) contract. This agreement has allowed
the Company to reduce its risks while at the same time introducing
new incentives on the Company to improve its performance. For
its part, in the context of its preliminary results for 2002,
the Company has announced that it will be making further provision
of £500 million against this project. This is in addition
to a previous provision of £300 million made in the Company's
2000 results. The scale of the financial losses that have been
announced by BAE SYSTEMS shows the Company accepting responsibility
for the serious difficulties that have arisen on this immensely
complex and demanding programme.
The MoD has agreed to delay the start of series
production until the aircraft design has attained an appropriate
level of maturity that has been proven on the first three aircraft
during the flight trials programme. This design maturity is scheduled
to be achieved at end of 2005. The first flight of the first of
the trials aircraft is likely to be achieved in 2004. The MoD's
contribution to this re-structuring is some £270 million.
The restructuring will result in a four year delay to the in-service
date to 2009 (now defined as the delivery of the sixth series
production aircraft).
As a result of the delay to the start of production,
the MoD now has the option of considering an increase in the aircraft
capability to meet the defence requirements of the 21st century.
To this end we will shortly be considering the results of Concept
Study work conducted by BAE SYSTEMS and intend to place an Assessment
Study contract later this year.
The MoD and the Company continue to be committed
to the principles of the Memorandum of Capability Partnering signed
in December 2000. Building on the experience of the joint work
to date, we are jointly reviewing the way ahead for in-service
support; the slippage and consequent restructuring of the programme
offers opportunities to revisit the proposed support arrangements
to scope improvements in efficiency and effectiveness.
Operational Requirement
Nimrod, Maritime Patrol Aircraft (MPA), with
their reach and large area coverage, uniquely provide the long
range maritime area surveillance and attack capability necessary
to assure secure battlespace in the littoral. Without this assured
access, the risk of loss of deployed forces, including CVF, from
a continuing surface and sub-surface threat, would severely limit
our ability to conduct post SDR joint and expeditionary warfare.
MPA provide the bedrock of maritime capability and, through inherent
reach, flexibility and capacity, offer the potential to fill current
capability gaps in worldwide responsive deep strike and ISTAR,
although these will have to be considered through future approvals.
Trade-offs
There have been no significant capability trade-offs.
Numbers
The 1996 requirement was for a fleet of 21 aircraft
in total. In 2002. this was reduced to 18 to reflect the increase
in capability and availability afforded by the MRA4 and the revised
submarine threat assessment within the Atlantic theatre.
Strategic Defence Review
The SDR confirmed the requirement for a maritime
patrol aircraft with the capabilities of MRA4 and a recent revision
of the Defence Planning Assumptions (DPAs) has re-iterated the
need for 18 maritime patrol aircraft (MPA). Nimrod MRA4 also has
significant potential as an "adaptable aircraft", building
upon the results of experience in Afghanistan and the general
need for more surveillance, reconnaissance and land attack capability
identified in the SDR New Chapter. The MoD and the Company will
jointly explore the potential for enhanced capability to be inserted
into the programme.
Military Capability
The Nimrod MRA4 is being procured principally
for Anti-Submarine Warfare (ASW), Anti-Surface Unit Warfare (ASuW)
and Search and Rescue (SAR). In this role, it can be used across
a full range of missions and will contribute to 16 out of the
current 27 Military Tasks. In particular the platform has a significant
role to play in Protection of the Deterrent (MT26), Counter-Drugs
Operations (MT3) and Integrity of UK Waters in Peacetime (MT8).
Nimrod MRA4 will bring greatly enhanced capability over the existing
Nimrod MR2, which is already using some of the Nimrod MRA4 technology,
thereby reducing risk in the new programme and increasing existing
capability. The broader potential of the Nimrod MRA4 aircraft
as an "adaptable aircraft" which might fulfil roles
for deep strike and ISTAR is also recognised and will be explored
further.
Equipment to be Replaced and In-Service Date
The Nimrod MRA4 replaces the Nimrod MR2, which
has been in frontline service for over 20 years. Subject to further
negotiation with the Company over the revised delivery assumptions,
the re-structured programme envisages the first series production
aircraft will be delivered in 2007 with ISD achieved by early
2009 (now defined as the sixth series production aircraft delivered)
and the last aircraft delivered in 2011. We are currently reviewing
the decommissioning programme of the MR2 to minimise the impact
of MRA4 delays.
Procurement Approach
The original contract for the supply of aircraft,
training systems and an interim support package was the result
of competitive tendering. As a result of the recent re-structuring
however, the development and production of the first three Nimrod
MRA4s as development aircraft will continue, with first flight
planned for 2004. We have agreed with the Company that there should
be a controlled and economic cessation of series production until
design has reached a level of demonstrated maturity during trials
on the first three aircraft. If the potential for the Nimrod MRA4
as an "adaptable aircraft" can be realised and is cost
effective, we will ensure that the necessary provisions for adaptability
are included in the first batch of production aircraft. At the
appropriate time, we will consider whether to launch the production
of the remaining Nimrod aircraft to a new adaptable standard or
the existing MRA4 standard. We will also consider at the appropriate
time whether it would be economic to convert the remaining development
aircraft to a production standard.
Crewing
The Nimrod MRA4 will be crewed by Royal Air
Force aircrew. With its improved sensor performance, communications,
processing capability, automation and ergonomics, the MRA4 allows
a reduction in crew numbers from the existing Nimrod MR2 minimum
of 13 to 10.
Alternative Procurement Options
Nimrod 2000 (now MRA4), was compared to the
competitor P3 aircraft (Orion 2000 and Valkyrie), refurbished
Nimrod MR2 "do minimum" and also run-on of the MR2 the
"do nothing" option. In overall affordability terms
and taking account also of industrial factors, the Nimrod 2000
was selected as offering the best value for money.
There is no other comparable programme in the
world which offers the prospect of providing the MoD's required
maritime patrol capability in either a better timescale or at
a cost which could represent better value for money.
Export Potential
BAE SYSTEMS withdrew from contention for the
US Multi Mission Aircraft (MMA) CAD Phase 1 process in September
2002. However, the Company continue to review its position with
regard to this programme, and remains engaged in discussions about
possible contributions to it. The export potential of the aircraft
in other markets will be dependent in large part on the outcome
of the US MMA selection process.
Industrial Factors
The MoD is working closely with the Company
to restructure the Nimrod MRA4 programme so that design and development
activity can be brought to an effective and timely conclusion,
including the manufacture and final assembly of the first 3 aircraft,
used during the flight trials programme. The Company and MoD will
study the most cost effective way to bring production of aircraft
4-18 to a controlled stop, with some long lead and other procurement
proceeding where most economic. However, BAE SYSTEMS is responsible
for managing the results of the decisions they have to take in
order to deliver the Nimrod MRA4 capability in the timescale that
is now being contemplated. On 18 March BAE SYSTEMS announced 1005
job losses, the majority attributable to Nimrod MRA4, reducing
their direct work force to some 1000 strong. Four sites are affected
by these redundancies; Chadderton, Prestwick, Warton and Woodford.
Manufacture and test work is spread across these sites, with final
assembly at Woodford. BAE SYSTEMS is in consultation with employee
representatives to try to mitigate these job losses, most of which
are expected to take place by the end of 2003. Deferred production
will have implications, as yet unscoped, for the supply chain,
with decisions needed as to whether to continue or halt delivery
and how best to manage and or store, until required. Principal
sub-contractors are Rolls Royce (Filton and Berlin) for the engine,
Boeing for the Tactical Command System and some sensor sub-systems,
Ultra for the Acoustics system and Thales for the Radar and Training
System. The aircraft will carry a number of weapon systems, including
STING RAY Torpedoes, manufactured by BAES, sonobuoys currently
supplied by Ultra Electronics and US-sourced Harpoon air to surface
missiles.
Smart Acquisition
Although the MRA4 programme pre-dates the introduction
of Smart Procurement, (now Smart Acquisition) it is being managed
along Smart Acquisition lines. Performance, time and cost measures
drive the key milestones of the programme.
Acquisition Phases/Key Milestones/Costs
Predicted milestone dates reflect the current
assumptions used in the negotiation of the MoD/BAE SYSTEMS Memorandum
but are subject to further negotiation.
| Milestone | Notes
| Date |
| 1st Flight |
| Mid 2004 |
| 1st Delivery |
| Late 2007 |
| ISD |
| Early 2009 |
| Final Delivery | Defined as delivery of the 6th production aircraft
| 2011 |
The approved procurement costs for the programme in resource
terms stands at some £2.98 billion. The cash addition to
the programme resulting from the latest Agreement is some £270
million. Taking this into account, together with the overall impact
of four years' programme slippage (including increased cost of
capital of some £250 million) and other activity including
work with QinetiQ, the current estimated forecast cost of the
programme is some £3.4 billion in resource terms. These costs
will be refined during the course of negotiations and subject
to re-approval when the detailed programme is reset in the Summer.
In-Service Support
The DPA and BAES signed a Memorandum of Capability Partnering
(MofCP) in December 2000. This appointed BAES as the prime contractor
for support of the MRA4 weapon system. In order to define and
acquire the required support, the DPA and BAES formed a joint,
integrated team to conduct the Capability Partnering (CP) studies.
The CP studies have considered how to ensure that the requirements
of the DPAs for Nimrod MRA4 are met and preserve the integrity
of the operational command chain, while providing for long-term
industrial involvement in Nimrod MRA4 support. Slippage and consequent
restructuring of the programme offers opportunities to revisit
the proposed support arrangements to scope improvements in efficiency
and effectiveness. A scoping study has considered how to merge
the CP activity with the current contract obligations, where they
remain valid, with the aim of creating a new single integrated
support contract. This will be developed further through risk
reduction work to enable an integrated support solution to be
progressively introduced from July 2005 to support the Ready For
Training (RFT) date in July 2007, first delivery at end 2007 and
ISD in 2009.
"Front Line" Numbers
The requirement is for 18 MRA4 aircraft. These will be split
between 17 operating fleet and one sustainment aircraft (covers
attrition and deep servicing). The operating fleet will be held
at varying levels of readiness. All will be available within 60
days.
Interoperability
MRA4 complies with the NATO Defence Capabilities Initiative.
Furthermore, the proposed Capability Enhancement studies will
consider the extent to which the MRA4 platform can participate
in and contribute towards network centric capabilities.
Disposal of Equipment Replaced
Those remaining MR2 aircraft which have not been converted
as part of the MRA4 programme will then be withdrawn from use
in their present role. The timescale for this remains to be assessed
in detail. However, we have already introduced improvements to
existing Nimrod MR2 aircraft by using some of the technology planned
for the new MRA4, thereby both reducing risk in the new programme
and increasing existing capability.
In-Service Life
Nimrod MRA4 has an in-service life of 25 years based upon
650 flying hours per year.
Development Potential
The mission systems have been designed with future development
potential in mind. Provision is included for the installation
of role fit work stations in the rear cabin. The aircraft's synthetic
aperture radar, advanced communications suite, and extensive range
and sortie duration make it a platform capable of adaptation to
other roles. Capability Enhancement studies suggest there is latent
potential in the Nimrod MRA4 platform which will be explored further
during the Assessment Phase of study work scheduled to begin in
Autumn 2003.
TYPHOON (EUROFIGHTER)
"Typhoon" has been formally adopted as the four
partner nations' name for Eurofighter. Typhoon is an agile fighter
aircraft that will serve as the cornerstone of the RAF's fighting
capability from the early years of this century. It will replace
the Tornado F3 and Jaguar in air defence and offensive air support
roles. Typhoon is being developed in a collaborative project with
Germany, Italy, and Spain. Contracts for the production of the
first Tranche of 148 aircraft, of which 55 are for the RAF, were
signed in 1998. As announced in Parliament on 5 December 2002,
the planned date for delivery of the first aircraft to the RAF
is now June 2003. The first Series Production Aircraft for each
nation made their maiden flights in February 2003.
Operational Requirement
The original European Staff Target for the then European
Fighter Aircraft (EFA), agreed in 1984, set a requirement for
a new agile fighter aircraft, designed to fulfil air defence,
including air superiority and interception, and air to surface
roles (with the air-to-air capability generally recognised as
the conditioning role). EFA was to be capable of intercepting,
fighting in air combat, and destroying a wide range of aerial
targets, including cruise missiles, remotely piloted vehicles,
and drones at a threat level expected in the mid 1990s and beyond,
as well as attacking enemy airfields and enemy surface forces.
It was to be able to operate in the electronic warfare environment
of a late 1990s European scenario by day and by night, in all
weathers for air defence, and in poor visibility and low cloud-base
for its air-to-surface role. The numerical superiority of hostile
air forces was to be compensated for by EFA's superior quality
and operational flexibility. Low observability and survivability
were key design goals, as were reliability, maintainability and
testability.
The European Staff Requirement agreed in 1985 incorporated
a number of key parameters—an unstable, delta-winged aircraft,
with canards, to have a "basic mass empty" of 9.75 metric
tonnes, a wing area of 50 square metres and two engines each producing
a static sea level thrust of 90 kiloNewtons. The ESR needed to
be updated to reflect the radically changed political and military
situation in Europe after 1989 and to address the requirement
for the year 2000 and beyond, taking account of EFA development
work. Amendments were embodied in the European Staff Requirement
for Development (ESR-D) of a European Fighter 2000—then
Eurofighter—signed in 1994. The ESR-D acknowledges that
specific threats are no longer predictable in detail, but stipulates
that a future European fighter aircraft must be capable of operating
effectively in a variety of roles and theatres.
Trade-offs
To maintain contract signature and the aircraft delivery
schedule for Tranche 1 aircraft, staged minimum functionality
standards in the initial service release and acceptance standards
were agreed with industry in 1998, along with a plan to upgrade
the aircraft subsequently. This approach was designed to allow
aircraft of a standard suitable for training to be delivered at
the earliest possible stage.
Numbers
The current requirement, following changes to initial levels,
is for 620 aircraft—180 for Germany, 121 for Italy, 87 for
Spain, and 232 for the UK. The UK is committed contractually to
the Tranche 1 production of 55 aircraft. Future production contracts
would commit the UK to 89 and 88 aircraft for Tranches 2 and 3
respectively. Industry proposals for Tranche 2 are being evaluated
now.
Strategic Defence Review/"New Chapter"
The SDR confirmed our commitment to acquiring 232 Typhoon
aircraft. The acquisition of Typhoon will provide a step change
in the RAF's ability to achieve air superiority and provide air
defence. The additional "New Chapter" work carried out
in the wake of the attacks of 11 September 2001 recognised that,
since the SDR was published in 1998, the risk of large scale conflict
in Europe had further reduced and placed new emphasis on the need
for rapid reaction forces. Given the wider changes in the strategic
and operational environment, there is a need to continue the evolution
of our force structures away from the legacy systems more suited
to the Cold War and towards capabilities that are optimised to
meet the new threats and challenges. We shall keep under review
how the capabilities offered by Typhoon can best respond to and
be employed in this changing environment.
Military Capability
Typhoon will bring a significant increase in our air superiority
capability as it replaces the Tornado F3. It will also provide
a true adverse weather, multi-role capability. This will allow
it to be employed in the full spectrum of air operations from
air policing to peace support through to high intensity conflict.
Its multi-role capability will also allow it to fulfil the ground
attack roles now performed by Jaguar.
Equipment to be Replaced and In-Service Date
The Typhoon will replace the Tornado F3 and Jaguar, the out
of service dates for which are 2009 and 2008 respectively. The
aircraft being replaced will have reached the end of their fatigue
life.
Over the past year, the flight test programme to gather the
flight safety and performance data necessary for acceptance into
service, as well as the resolution of outstanding and arising
design issues, has not proceeded as quickly as expected. The crash
of a development aircraft in Spain on 21 November 2002 also affected
the flight test programme. In this light, we concluded with our
international partners and with Industry that the evidence required
to permit contractual acceptance of the aircraft by the four partner
nations would not be complete until March 2003. Allowing for the
joint, four-nation acceptance process, aircraft should now be
ready for hand-over to the RAF by the end of June 2003 which represents
a delay of 54 months against the original ISD of December 1998.
Every effort is being made to accelerate the entry to service
and work-up process to prevent or minimise any delay in the operational
employment of Typhoon, scheduled for the second half of the decade.[1]
Acquisition Approach
Early work in each participating country by defence contractors
working to their national governments was co-ordinated under Memoranda
of Understanding between the partner nations. Full collaborative
development was launched in 1988. Collaborative Production Investment
and Production, including Initial Support, was launched by the
partner nations at the end of 1997, following signature of further
MoUs, and contracts were signed in January 1998. Contracts for
production of the first Tranche of 148 aircraft, including 55
for the RAF, were signed in September 1998.
Typhoon development and production are undertaken by two
consortia: Eurofighter GmbH and Eurojet GmbH. Eurofighter GmbH
comprises BAE SYSTEMS from the UK, Alenia from Italy, EADS (Deutschland)
from Germany, and EADS (CASA) from Spain. It is responsible for
developing and producing the airframe, avionics, and the other
aircraft systems, and for the integration of the EJ200 engine.
The latter is being developed and produced by Eurojet GmbH, comprising
Rolls-Royce from the UK, MTU from Germany, Fiat from Italy, and
ITP from Spain. A large number of smaller companies in the UK
and elsewhere contribute as subcontractors and suppliers to the
prime consortia.
The purchasing arrangements are summarised in the following
tables.
1
The contracting route is unchanged since last year; prices are
fixed, and subject to variation of price for inflation. The previous
report used NATO terminology, which refers to such arrangements
as "firm" prices. Back
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