Annex A (continued)
METEOR
Meteor is an all-weather, beyond visual range
air-to-air missile to equip Eurofighter (now Typhoon), which is
being procured from MBDA UK Ltd (formerly Matra BAe Dynamics)
in collaboration with Germany, Italy and Spain (our Typhoon partner
nations), France (for Rafale) and Sweden (for Gripen). It was
selected in May 2000, following a competition between MBDA and
Raytheon Systems Ltd. The combined design, development, production
and support contract was placed on 23 December 2002 following
approval and signature of the Meteor Memorandum of Understanding
(MOU) by all partner nations. It is forecast that Meteor will
enter service, on Typhoon in 2012.
Operational Requirement
The requirement is for a medium range air-to-air
missile for the Typhoon. Initial planning assumptions were based
on the ability of the AIM-120B Advanced Medium Range Air-to-Air
Missile (AMRAAM) to meet the longer-term threat, but changes in
the operational environment led to the issue of a revised Staff
Requirement in 1995. It underlined the need for the fighter to
achieve a large "no escape zone" against manoeuvring
targets during beyond visual range air-to-air combat, and to maximise
the number of firing opportunities. The Staff Requirement also
employed the principle of "performance objectives" as
opposed to "essential criteria". This was designed to
prompt bidders to propose innovative solutions and as wide a range
of options as possible.
Trade-offs
It should be possible to upgrade major missile
sub-systems to incorporate more cost-effective technology and
to match the evolving threat. The Staff Requirement sought to
encourage the designers to share the risk by matching and trading
the performance requirements to a realisable and affordable design
solution.
Numbers
***
Strategic Defence Review
The BVRAAM programme was considered during the
Strategic Defence Review, when the difficulties of achieving the
in-service date were assessed. It was concluded that BVRAAM remained
a key capability.
Military Capability
Meteor will be the primary air-to-air weapon
for Typhoon. It will provide a key capability in achieving and
maintaining air superiority wherever Typhoon is deployed. Meteor
will allow Typhoon to engage multiple and manoeuvring targets
simultaneously, at greater range than before, in all weathers,
day or night, and with greater survivability.
Equipment to be Replaced and In-Service Date
Meteor will not specifically replace any other
programme. Instead, it represents a new generation of weapon designed
to equip a new generation of fighter.
A 90% confidence ISD of August 2012 was approved
for Meteor at Main Gate; the approval noted a 50% confidence date
of September 2011. Until Meteor comes into service, Typhoon will,
for its Medium Range capability, be armed with the Advanced Medium-Range
Air-to-Air Missile (AMRAAM), manufactured by Raytheon. An interim
buy of AMRAAM missiles would have been required whichever BVRAAM
solution was chosen.
Acquisition Approach
Competition was maintained throughout the pre-Main
Gate phase, both at prime and sub-contractor levels, to ensure
best value for money. Bidders were required to submit firm prices
for an initial five-year period from award of contract and fixed
prices thereafter.
A Request for Information was issued in 1994
to a wide range of national and foreign government agencies, potential
prime contractors, and major equipment suppliers. Responses received
by the MoD in late 1994 suggested that a project was technically
feasible and capable of completion within an acceptable timescale.
Four potential partner nations, Germany, Italy, Spain, and Sweden,
agreed in principle in 1995 that the UK BVRAAM specification broadly
met their baseline missile requirements for Typhoon and, in the
case of Sweden, JAS 39 Gripen. These nations were invited to assess
the bids jointly with the UK, with a view to agreeing on a common
solution. In July 1999 France joined the programme, having identified
that the BVRAAM specification broadly met their capability requirements
for Rafale.
An invitation to tender was issued in 1995,
requesting bids for the full capability missile, as well as proposals
for a staged capability (ie an interim capability missile with
the potential for upgrade). Two companies, Raytheon Systems Ltd
(formerly Hughes) and Matra BAe Dynamics (now MBDA), submitted
bids. Raytheon submitted proposals for a Future Medium Range Air-to-Air
Missile (FMRAAM), a full capability missile, and the Extended
Range Air-to-Air Missile (ERAAM), with a proposed growth path
to full capability. MBDA proposed only a full capability missile,
Meteor.
Assessment highlighted areas of major technical
risk in each bid, and it was decided not to award an immediate
Development and Production contract. Instead, contracts for a
Project Definition and Risk Reduction phase were placed with the
two bidders in August 1997. Revised bids to meet the requirement
were received in May 1998, and these were followed by an additional,
unsolicited offer of Raytheon's ERAAM+ under the umbrella of a
joint UK/US collaboration. Best and Final Offers were received
from both companies in September 1999 and, following Ministerial
consideration, a decision to buy Meteor was announced on 16 May
2000.
Contractual negotiations with MBDA, involving
a number of complex technical and commercial issues, were fully
concluded in early 2002. Importantly, lessons learned from the
Advanced Short-Range Air-to-Air Missile (ASRAAM) programme were
applied, particularly in ensuring that both ourselves and MBDA
were in full agreement on the requirement and the means by which
this would be demonstrated. Signature of the contract was however
further delayed until German Bundestag approval was received in
December 2002.
Alternative Acquisition Options
No suitable "off-the-shelf" missile
was assessed as being able to meet the BVRAAM requirement. Options
considered in the early stages, but deemed not to have the required
performance, were the Matra MICA, the Alenia Aspide, and the British
Aerospace Dynamics Active Skyflash.
Collaboration
Meteor is a collaborative project with Germany,
Italy, Spain, France, and Sweden. The UK is leading the programme,
with industry having defined work-share based on technical excellence,
manageable risk, and best value for money, rather than any predetermined
formula. The collaborative Meteor contract placed by the DPA is
under UK contracting law. The contract incorporates production
options for partner nations, which enables them to commit to production
quantities at any stage of the development programme. The UK is
presently the only nation to commit to production. An MOU, setting
out the contractual, financial, and management arrangements for
the programme, has been signed by all partner nations. The UK,
France and Sweden signed the MOU in June 2001; Italy signed in
September 2001; Spain signed in December 2001 and Germany in December
2002. The final signature of the MOU allowed the UK to place the
contract with MBDA.
Missile requirements and in-service dates (ISDs)
for the other nations have yet to be advised. An International
Joint Project Office (IJPO) has been established within the MoD
Defence Procurement Agency under the UK's BVRAAM Integrated Project
Team Leader. The salary costs of partner nations' representatives
are being borne by their governments.
Export Potential
Meteor has good prospects for sales, particularly
as part of an integrated package on Typhoon. The opportunities
for overseas sales could be widened through sales of Gripen and
Rafale, by Sweden and France respectively.
Industrial Factors
Industrial factors were taken into account in
the assessment of bids. Meteor offered particular advantages to
the UK in terms of the quality and sustainability of the jobs
involved. MBDA stated that a total of 2,400 jobs would be created
or sustained in Europe; 1,200 in the UK.
Smart Acquisition
The Meteor programme embodies a number of Smart
Acquisition principles. Whole life costs formed an integral part
of the decision process. The IPT has also entered into a partnering
agreement with the Prime Contractor, that formally details how
the relationship between the company and the IPT will be managed.
Emphasis is being placed on continued delivery of value for money,
and gain-sharing potential will be kept under continuous review.
Importantly, the contractor has agreed to a series of four key
technological milestones, to demonstrate successful progress during
the development phase. If the company fails to achieve any of
these milestones, against clearly measurable acceptable criteria,
termination of the contract can be initiated, with all money being
returned to the partner nations.
Acquisition Phases
Key acquisition phases are shown in the table
below:
| Phase | Date
| Activity |
| Prime contractor selection | May 2000
| Contract negotiation. Drafting of Memorandum of Understanding.
|
| Demonstration and Manufacture Phases | December 2002
| Contract placed for Design, Development, Production and Support of Meteor.
|
Milestones and Costs
Expenditure up to 31 March 2003 was £77 million (on
a resource basis at outturn prices). The total approved (90%)
acquisition resource costs at Main Gate in May 2000 is £1,437
million, including the purchase on interim AMRAAM missiles. The
current forecast (50%) cost is £1,403 million. The years
of peak expenditure are likely to be 2010-11 and 2011-12.
In-Service Support
The aim of the Meteor Integrated Logistic Support strategy
is to minimise the support costs whilst maintaining weapons availability.
The weapon is being designed under an "all up round"
principle (ie a complete munition that requires no assembly or
maintenance immediately prior to loading) to reduce through life
logistic support. MBDA will be responsible for the first 10 years
of logistics support. Very little maintenance will be required
on the Meteor system in service. Missiles and support equipment
will be returned for repair to MBDA once any fault has been confirmed.
Contracts after the initial ten-year period will be subject to
negotiation.
Discussions between the UK, MBDA, and our partner nations
on support are now complete. All partner nations have indicated
that they would like to pursue a collaborative logistic support
contract for Meteor with the benefit of greatly reducing each
partner nation's support costs. The draft 10-year logistic support
contract has been worded to enable any partner nation to join
in this combined support contract as they commit to production.
Provision of initial operator and maintainer instructor training
and the associated training package are the responsibility of
MBDA. Future continuation training will be undertaken with in-service
resources. A number of ground-handling training missiles, telemetered
operational missiles and explosive ordnance disposal training
missiles will be procured. Technical publications will be produced
in full electronic format.
Front Line, Storage and Reserve Numbers
Current plans for operational missiles require *** to be
placed in storage and *** to be allocated to Main Operating Bases.
This includes telemetered rounds.
Interoperability
The BVRAAM programme was conceived exclusively for Typhoon,
where the main carriage method is semi-recesssed under the fuselage—a
key design driver. Meteor will be integrated on Gripen (for Sweden)
and Rafale (for France) and will therefore be interoperable with
these nations in addition to our Typhoon partners. Whilst the
extant UK requirement provides only for integration on Typhoon,
integration issues with respect to the Joint Strike Fighter variant
selected as the UK's Future Carrier Borne Aircraft will also be
assessed.
In-Service Life
Meteor has a required 25-year design life.
Development Potential
Through-life development of the missile will be considered
as the project progresses.
ADVANCED SHORT
RANGE AIR-TO-AIR
MISSILE (ASRAAM)
The Advanced Short Range Air-to-Air Missile (ASRAAM) is a
highly agile, passively guided advanced-air weapon, manufactured
by MBDA (formerly Matra BAe Dynamics). It is being deployed on
the Tornado F3 to replace the Sidewinder AIM-9L missile and it
will also be fitted to Eurofighter (now Typhoon). ASRAAM entered
service at an interim standard in January 2002 and became available
for operational deployment in summer 2002. Incremental improvements
will lead to a full operational capability for ASRAAM, which we
aim to achieve by the end of 2003.
Operational Requirement
The requirement for a highly agile missile with good infra-red
countermeasures resistance was driven by the need for short-range
air superiority in visual combat. Such a missile was to provide
Typhoon with a substantial advantage against the forecast threat
at the turn of the century, and would be complementary to Skyflash
and Meteor (see separate memorandum). The missile would, additionally,
be an important factor in the overall capability of the Tornado
F3.
Initially, the UK sought to meet the national requirement
for a short-range air-to-air missile through participation in
a collaborative development for a family of weapons. In accordance
with a Memorandum of Understanding between the UK, the US, and
Germany, signed in 1980, a tri-national Staff Requirement was
agreed in October 1984. Subsequent budgetary pressures, technical
and management problems, and changes to US requirements caused
our partners to withdraw from the project. The Staff Requirement
was re-endorsed as a UK national programme in 1990 without any
significant changes since the original approval.
Trade-offs
We have accepted that, for a short period of time, the missile
will be beneath the exacting performance standard we specified.
We have agreed to this only after having established a clear and
robust route map towards achieving the missile's full operational
capability. There is no additional cost to the Department for
the work that MBDA will have to do to achieve this. Notwithstanding
this, the missile that has entered service is the best in its
class.
Numbers
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Strategic Defence Review
The Strategic Defence Review (SDR) and SDR New Chapter did
not affect the requirement or existing orders.
Military Capability
ASRAAM will provide a significant contribution to achieving
and maintaining air superiority, as well as providing critical
self-defence capability for a variety of current and future UK
air assets. It will be employed in the full spectrum of air operations
from air policing to peace support through to high intensity conflict.
Equipment Replaced and In-Service Date
ASRAAM will replace Sidewinder AIM-9L on Tornado F3 in a
delivery programme that started in January 2002 and is the planned
short-range air-to-air weapon for Typhoon. In addition, following
the announcement, in September 2002 of the Joint Strike Fighter
(JSF) as the Future Joint Combat Aircraft platform ASRAAM will
provide the same capability on JSF. ASRAAM is no longer planned
for Harrier GR9 or Sea Harrier FA2 following the new investment
strategy for Joint Force Harrier announced in February 2002.
The ISD set at ASRAAM's Main Gate equivalent was December
1998; following re-approval in August 1999 this was reset to April
2001. ASRAAM entered service in January 2002, 37 months late against
the Main Gate approval. The achievement of ISD marked the successful
resolution of a contractual dispute between MoD and MBDA. Prior
to this, the missile had been offered for acceptance by MBDA but
we were unable to accept it as a number of specified performance
standards had not been met. The performance shortfalls were in
the areas of lethality, target acquisition, tracking, and resistance
to countermeasures. The Department worked closely with MBDA to
agree a clear and robust route map to full operational capability
which enabled the missile to enter service in January 2002.
The incremental route to full operational capability comprises
a number of stages. The missiles accepted in January 2002 were
at an interim standard that is higher than that offered by MBDA
for the ISD of April 2001. Even though improvements over and above
this standard are required, the missile's level of performance
at ISD was far superior to that of AIM-9L and it is the best short-range
air-to-air missile available. The first incremental upgrade standard
(FOC1) involves both hardware and software improvements, and deliveries
at this standard of missile began in late 2002. The ASRAAM development
programme will continue with further software upgrades that will
lead to full operational capability, (FOC2) by late 2003. Any
improvements identified as being required beyond this will be
incorporated into an FOC3 standard for which additional funding
will have to be found. The delay has had no impact on Typhoon's
operational capability.
Acquisition Approach
Under the provisions of the 1980 MoU, the US was to develop
an advanced medium range air-to-air missile, and the UK and Germany,
along with Norway and Canada, who had subsequently joined the
programme, were to develop the advanced short-range system. The
European programme was managed by a joint project office, with
Bodenseewerk Geratetechnik GmbH and British Aerospace Dynamics
Ltd as the principal contractors. Difficulties with the programme,
including problems with missile configuration and the establishment
of effective collaborative arrangements, led to the withdrawal
of Germany from the programme in 1989 and the US, Norway, and
Canada in 1990.
Once ASRAAM had been re-endorsed as a UK national programme,
an invitation to tender was issued in 1991. It called for a package
deal, covering development, production, and associated logistic
support of the missile and its associated training variants. We
also stipulated the minimum use of Government Furnished Facilities
and Equipment, and the earliest possible ISD.
A number of candidate weapons were considered. British Aerospace
Defence Ltd; Raytheon; a consortium of GEC, Marconi, and Matra;
Bodenseewerk Geratetechnik GmbH, (BGT); and Loral Aeronutronic
all expressed an interest in the competition. In the event, Raytheon
and Loral did not respond to the ITT. The BAe bid of ASRAAM, the
GEC Marconi/Matra bid of MICA ASRAAM, and the BGT AIM9L IRIS were
considered as options in early 1992. Other weapons, including
a further BGT bid, the AIM 9LI (an improvement over the standard
AIM9L) and a number of US options either in service or in development
were also considered, but were not assessed as capable of meeting
the UK requirement.
The BAe bid met the Staff Requirement and offered a number
of advantages over the BGT and GEC Marconi/Matra bids. BAe Defence
Ltd (now MBDA) was awarded a fixed price contract in 1992.
Export Potential
ASRAAM won its first export order in December 1998 when it
was selected for the Royal Australian Air Force, with whom we
are working closely. Australia has had similar concerns to us
with respect to performance, however they are now reasonably confident
that their requirements will be met and enable Service Release
of the Full Operational Capability ASRAAM in December 2003. There
is also interest from a number of other nations, including Canada,
Oman, Singapore, Spain, Finland and Saudi Arabia. The main competition
to ASRAAM is from missiles being built in the USA, Germany, Russia,
Israel, France, and South Africa.
Industrial Factors
The decision on the main development and production contracts
took account of the employment implications for the UK. MBDA has
estimated that more than 80% of the work in total would be in
the UK, securing some 7,000 jobs. The GEC Marconi/Matra bid offered
only 50% of work in the UK, although they estimated that this
would rise to 70% if potential sales were achieved.
Smart Acquisition
MBDA proposed in September 1998 a number of Smart Acquisition
"gain sharing" initiatives. These included the introduction
of a more powerful processor into the missile, enhancing the potential
for future performance upgrades and eliminating an obsolescence
problem at no cost to the MoD, and better alignment of missile
production deliveries with candidate aircraft platforms. A contract
amendment was agreed in September 1999. The subsequent contractual
dispute between MoD and MBDA was eventually resolved in 2002 and
the outcome, an incremental route map to full operational capability,
follows Smart Acquisition principles. Lessons from our experience
of the ASRAAM programme are informing our acquisition from MBDA
of the Meteor beyond-visual-range air-to-air missile. (See separate
Meteor memorandum).
Acquisition Phases
Details of the current acquisition phase are shown in the
table below:
| Phase | Date
| Activity |
| Development & Production | March 1992
| Full development and production of ASRAAM starts
|
Milestones and Costs
Expenditure to 31 March 2003 (on a resource basis at outturn
prices) is expected to total £777 million, comprising £72
million on Feasibility and £705 million on Development and
Production. Total approved costs are £866 million. The expected
final cost is £857 million (ie £72 million on Feasibility
and £785 million on Development and Production). The delay
in achieving ISD resulted in the Department incurring approximately
£7 million additional costs. These include extra intramural
expenditure and costs arising from the need to maintain Sidewinder
missiles in service.
Delays to the programme have triggered liquidated damages.
The majority of these have already been collected totalling some
£19 million. The amended contract makes provision for further
liquidated damages up to a maximum of 6% (approximately £23
million) of the value of deliverable items. The MoD will continue
to claim any liquidated damages that fall due. We have, however,
accepted the company's claim that some of the programme delay
has been caused by the need to dedicate significant resources
to the MoD/company contractual dispute. Accordingly as part of
the overall agreement to bring ASRAAM into service, a period of
grace has been allowed in the schedule determining liquidated
damages. But any further delays by MBDA could negate the benefit
the company derives from this period of grace.
In-Service Support
ASRAAM is an industry-supported missile, with maintenance
being undertaken by the prime contractor. A five year Support
contract, based on delivering an agreed level of availability,
was awarded to MBDA on 1 March 2003.
Most of the support equipment and handling procedures for
ASRAAM will be the same as for the current AIM-9L weapon. However,
as the design has been completed under the "all up round"
principle (ie a complete missile, ready for use, stored in its
own container), there will be a substantial reduction in routine
servicing requirements and all major servicing will be undertaken
by industry. Having identified potential storage difficulties
(the result of ASRAAM stocks building up without equivalent reductions
in AIM-9L stocks), we undertook a Weapon Loading and Storage Study.
The recommendations are now being implemented and we are confident
that no significant problems will arise. Since the operational
and training missiles both have classified software, unlike the
current air-to-air weapons, of which only the operational weapons
are classified, modified security procedures have been put in
place.
Front Line, Storage and Reserves Numbers
The Air Force will operate a dual inventory policy where
the majority of the stock will be held in store and the remainder
held forward for first line use.
Interoperability
ASRAAM has demonstrated its compatibility with earlier AIM-9L
launch equipment and interfaces. It is capable of being carried
and fired, with minimum modification, by all UK and other allied
air forces' aircraft that can carry and employ AIM-9L. The system
is compatible with the rail launchers on Typhoon. It is also designed
to be employed using multiple sensors, such as the infra-red search
and track systems and helmet-mounted sights planned for Typhoon,
as well as radar.
Disposal of Equipment Replaced
Surplus Sidewinders may have potential for re-sale. Missiles
that cannot be sold will have no operational use and will be scrapped.
In-Service Life
The current life required from ASRAAM is 10 years. However
this will need to be extended to at least 25 years in order to
match the Service life of Typhoon and JSF. A strategy to do this
will be developed over the course of this year.
Development Potential
We continue to work, in partnership with Australia, to establish
a programme of through-life development. The programme is primarily
to ensure a useful service life of 25 years and could involve
the acquisition of emerging technology on an incremental basis.
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