Further memorandum by the Ministry of
Defence
DEFENCE PROCUREMENT
The following key milestones have been achieved
in these projects since last year's exercise:
Achievement of the BOWMAN In-Service
Date ahead of schedule, in March 2004.
Selection of the AirTanker consortium
as the Preferred Bidder for FSTA.
Signature of the Development and
Production contract for A400M.
Start of manufacture on HMS Daring,
the First of Class Type 45 destroyer.
Signature of amended contracts reflecting
the Agreements between MOD and BAE SYSTEMS on Nimrod and ASTUTE.
Delivery of the first Eurofighter
Typhoon and acceptance by the RAF.
Approval for FRES to go forward to
the Assessment Phase.
The cost and time data in the memoranda reflect
the latest estimates as at 31 March 2004, rather thanas
in previous yearsthe endorsed Equipment Plan allocation.
This data is therefore still subject to Departmental review and
action through the current planning round.
1. A400M
PROJECT SUMMARY
1. The A400M military transport aircraft
is being acquired to replace the remaining C-i 30K Hercules aircraft
fleet. The Secretary of State announced at the launch of the A400M
collaborative programme on 16 May 2000 the Department's intention
to order 25 A400M aircraft to meet our long-term outsize airlift
requirements from the latter part of the decade. Main Gate approval
was achieved in May 2000.
2. A single-phase Development and Production
contract for 180 A400M aircraft was signed by the European armaments
agency OCCAR (on behalf of the Participating Nations) and Airbus
Military (AM) on 27 May 2003. National offtakes are as follows:
Germany | 60
|
France | 50 |
Spain | 27 |
UK | 25 |
Turkey | 10 |
Belgium | 8 (including one on behalf of Luxembourg).
|
| |
3. Inter-Governmental Arrangements (IGAs) were signed
in May 2003 and comprise:
(a) a Memorandum of Understanding (MoU) committing the
nations to the programme;
(b) an OCCAR Board of Supervisors (BoS) Decision that
agrees to the assignment of the A400M Programme to OCCAR;
(c) a Programme Board Decision (PBD) setting out the management
arrangements.
POLICY CONTEXT
AND CAPABILITY
REQUIREMENT
4. The Staff Requirement (SR(A)435) to replace the C-130K
Hercules aircraft was endorsed in 1993. In July 1997, the UK announced
its intention to rejoin the collaborative European Future Large
Aircraft (FLA) programme (as A400M was then called). The associated
European Staff Requirement (ESR) matches and in some areas exceeds
SR(A)435. It specifies a larger cargo-carrying volume, a greater
maximum payload, and a higher cruise speed.
5. The Strategic Defence Review (SDR) confirmed the need
to replace the capability provided by the 0-130K and concluded
that an outsize airlift capability was required to support the
deployment of the Joint Rapid Reaction Force (JRRF). SDR New Chapter
also came to this conclusion.
6. The A400M will provide tactical and strategic airlift
capability to all three Services in peace, crises and war. The
aircraft will enter service with significantly more capability
than the C-130K, and will achieve an intermediate tactical clearance
of day/night, poor weather/hostile environment capability by 2011.
Full clearance is due in 2015.
COSTS
7. Expenditure to 31 March 2004 is £38 million.
*** The exact contract price is commercially sensitive, however
our commitment in the Memorandum of Understanding earmarks some
3 billion.
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
8. The current forecast UK A400M ISD is 2011 (at 50%
confidence) and is defined as "Entry into service of the
7th aircraft with Strategic Military Aircraft Release and support
arrangements".
9. The approved ISD at Main Gate was 2009 (at 90% confidence).
The ISD slippage is the result of the delay in bringing the contract
into effect caused by delayed approvals in Germany. Since contract
launch, there has been no further ISD slippage.
10. The A400M will have an In-Service life of 30 years.
First UK aircraft delivery is scheduled for 2010. Last UK aircraft
delivery is scheduled for 2015.
ACQUISITION APPROACH
11. On 4 September 1997, the seven-nation FLA Request
for Proposals (RFP) was issued to Airbus for an aircraft which
met the ESR. This was followed, on 29 July 1998, by the issue
of a four-nation competitive UK-led (FR, BE & SP also joined)
Future Transport Aircraft RFP to Airbus (FLA), Boeing (C-17) and
Lockheed Martin (C-i 30J).
12. On the basis of the proposals received, the European
A400M was chosen. In selecting A400M, the greater industrial benefits
to the UK and technical compliance were taken into account. 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.
13. The IGAs and contract were signed in May 2003 following
German Bundestag approval.
14. The collaborative procurement approach has enabled
nations to acquire a capability that otherwise would have been
unaffordable individually. The commercial approach is bringing
proven Airbus best practice, from civil aircraft development and
production, to the programme. The 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.
15. Management of this programme is being undertaken
by OCCAR. The A400M Programme Committee (consisting of senior
officials from each participating nation) has direction and oversight
of the programme.
16. 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.
INDUSTRIAL ISSUES
17. 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 is for the design, development, production
and delivery of the complete aircraft, including its engines and
all other systems.
18. The contract does not prescribe any national workshare
arrangements. AM is free to select its suppliers on grounds of
performance, time and cost, therefore ensuring that best value
for money is obtained. Consequently, there are no impediments
to UK companies securing sub-contract business. It is estimated
that the A400M programme will create up to 8,000 jobs in the UK
of which 2,500 will be long-term skilled in the aerospace sector
(notably in design and advanced engineering).
19. A key element of Airbus' 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.
20. In May 2003 AM selected the European TP400-D6 engine
offered by Euro Prop International, a Special Purpose Vehicle
comprising Rolls Royce, SNECMA, MTU and ITP. This was followed,
in July 2003, by the selection of Ratier-Figeac for the propeller,
and, in February 2004, by the selection of Messier-Dowty for the
Landing Gear System. 2004 is a key year for selection of remaining
A400M equipments and systems.
21. AM believes that there is a significant market for
the A400M beyond the Participating Nations. AM estimates of the
scale of this market vary, but could be around 200 aircraft. Australia,
Malaysia, Norway, South Africa and Sweden appear the most likely
early export targets for AM.
IN -SERVICE
SUPPORT
22. There is a wide range of In-Service options from
which to choose. Airbus Military has made its own proposals that
can be tailored according to the national level of contractor
support required, while other service providers may also be able
to offer competitive support options, especially when considering
PFI solutions. It is anticipated that RAF personnel will provide
forward support at RAF Brize Norton, while extensive use will
be made of contracted services to provide depth support. This
strategy will ensure flexible and responsive support to operations,
while making best use of industry experience and resources for
the conduct of the more specialised and resource-intensive tasks.
Opportunities for common support, including training, are being
actively investigated and any operational or cost benefits will
be considered in finalising the UK support options.
23. The A400M IPT is now also working towards compliance
with the guiding principles of the Support Solutions Envelope
(SSE), a tool developed by the DLO to ensure that the support
options selected by DPA IPTs consider the implications for support
through-life, thereby facilitating programme transfer from DPA
to DLO.
NEXT STEPS
24. The A400M 95-month Development phase is achieving
contractual milestones. Airbus Military declared that End of Concept
Phase was reached at end 2003 and the programme is now in Pre-Design
Phase which will be followed by Detailed Design later this year.
25. 2004 will be a key year for the selection of equipment
and systems. Industrial Partners have been allocated development
activities and are working satisfactorily.
26. Airbus Military is expected to submit its application
for Type Certification by April 2005. Work for the Final Assembly
Line site at Seville, Spain, has started and is scheduled to be
ready to receive jigs and fixtures for the A400M production line
by end 2005. First flight is programmed for December 2007 with
Type Validation following in July 2009.
2. ADVANCED SHORT RANGE AIR-TO-AIR MISSILE (ASRAAM)
PROJECT SUMMARY
1. The Advanced Short Range Air-to-Air Missile (ASRAAM)
is a highly agile, passively guided advanced air weapon, manufactured
by MBDA. It is being deployed on Tornado F3 to replace the Sidewinder
AIM-9L missile and it will also be fitted to Typhoon and Joint
Strike Fighter. ASRAAM entered service at an interim standard
in January 2002 and became available for operational deployment
in summer 2002. A series of incremental improvements will lead
to a full operational capability by late 2004.
2. Since the last HCDC survey, MBDA have delivered the
second, and most probably the final, software increment, which
has been accepted: work has begun to integrate this standard onto
Tornado F3. A cost benefit analysis on a third possible increment
will be made later this year.
3. The total number of missiles is confidential, but
will be supplied if required.
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
4. The ISD definition was the acceptance of the Certificate
of Design and performance statement, with the subsequent delivery
of 60 missiles fit for purpose. This was achieved at an interim
standard in January 2002.
5. ASRAAM entered service 37 months late against the
Main Gate approval. The reasons for this slippage were due to
missile hardware and software technical difficulties (+18 months),
alignment of missile production deliveries with candidate aircraft
(+6 months) and failure of the contractor to meet contractual
performance (+13 months).
6. The previous system on Tornado F3, AIM9, was judged
to provide sufficient capability for the period prior to the introduction
of ASRAAM. The effect of the delay was somewhat ameliorated by
delays to the introduction to service of the primary platform,
Typhoon.
7. The minimum proven life required for ASRAAM at entry
to service was 10 years, and the design was to be such that further
life extensions would not be precluded. This has been met. This
life will need to be extended by way of In Service Surveillance,
Life Extension Trials, Whole Life Assessment initiatives and periodic
replacement of pyrotechnics in order to match the Service life
of Typhoon and JSF.
8. The assumed Out-of-Service date is 2043.
SYSTEM PERFORMANCE
9. ASRAAM met 6 out of 10 Key User Requirements (KURS)
at ISD. The narrowly missed KURs covered target acquisition and
tracking, lethality in key engagement conditions and performance
against countermeasures.
10. A clear and robust route map towards achieving the
missile's full operational capability, and the remaining four
KURs, was agreed with the contractor, and endorsed by the Investment
Approvals Board (IAB), prior to the acceptance of ISD missiles.
11. In December 2003, the IPT accepted "FOC2"
standard software which met all the requirements agreed for this
performance increment, as well as delivering MBDA's obligations
for final (FOC3) performance levels for two of the outstanding
four KURs. While performance fell marginally short of the most
demanding levels set for the third outstanding KUR, the Department
also accepted at this stage that MBDA have maximised the performance
available from the current design, and that this KUR had therefore
been met. The company has exceeded the requirements of the fourth
KUR as endorsed by the IAB in December 2001. Any further performance
improvement in this area will be a value for money decision that
the Department plans to make later in the year, following a report
by the company; this work would be beyond the scope of the current
approval.
12. The RAF is delighted with ASRAAM's outstanding performance.
It is the world's best short range air-to-air missile and gives
our pilots a critical edge in achieving air superiority. It was
deployed on OP TELIC and showed very high levels of on-aircraft
reliability in an adverse environment, although no missiles were
fired.
13. ASRAAM has been bought by Australia. We continue
to work in partnership with the Australians on a programme of
through-life development. The programme aims primarily to ensure
that the required service life is achieved and could involve the
acquisition of emerging technology on an incremental basis.
COSTS
14. Expenditure to 31 March 2004 is £798 million.
The current forecast cost is £873 million compared with £866
million approved at Main Gate; an increase of £7 million.
The variation since the last HCDC report is an increase of £16
million. This was due to having to replace funding taken out of
the programme in a previous planning round on the assumption thatalthough
already under contractwe would be able to reduce the number
of missiles we would procure. In the event, the Department was
unsuccessful in re-negotiating a contract amendment.
ACQUISITION ISSUES
15. There are no plans to procure follow on buys of ASRAAM.
If further countermeasures improvements are required to achieve
an FOC3 standard this will be a new requirement, for which additional
funding and a new approval will be needed.
In-Service Support
16. ASRAAM is supported through a five-year contract
with MBDA, let in March 2003, based on contracting for availability.
Responsibility for the project will transfer to the Defence Logistics
Organisation (DLO) at the end of 2004.
17. The DLO plan to combine ASRAAM with other systems
from MBDA in a partnering arrangement that will ensure that the
full benefits of rationalisation and flexibility between programmes
are realised.
3. LIGHT FORCES ANTI-TANK GUIDED WEAPON SYSTEM (LF
ATGWS)
PROJECT SUMMARY
1. The LF ATGWS requirement is for a lightweight, man
portable medium range anti-tank guided weapon to equip the Light
Forces within the Joint Rapid Reaction Force and Mechanised Infantry.
It will be met by the US Javelin system produced by the Raytheon/Lockheed
Martin Joint Venture. In terms of key milestones over the last
12 months, final design modifications to the UK weapon system
were completed in January 2004.
POLICY CONTEXT
AND CAPABILITY
REQUIREMENT
2. The Strategic Defence Review (SDR) confirmed the need
for an anti-armour capability. This was reinforced in SDR New
Chapter and the 2003 Defence White Paper, which emphasised the
role of highly mobile expeditionary forces. Despite the world-wide
reduction in tank inventories since the end of the Cold War, nations
against which UK forces might be deployed have generally maintained
their numbers and several states are actively trying to acquire
new tanks with increased capabilities. Accordingly, the armoured
threat remains. The more modern Main Battle Tanks not only have
increased capabilities, they also have more capable armour and
are more difficult to destroy. The requirement for effective anti-armour
systems was reinforced by experience in Operation TELIC.
3. Operational analysis has demonstrated the need to
equip the dismounted soldier with a medium-range man portable
weapon that can be used against armour and secondary targets in
an offensive and defensive role. Javelin will replace the ageing
MILAN system and be effective against all ground vehicles including
modern and future battle tanks from all aspects. Effective range
will be out to 2.5km.
4. The procurement of a Military Off-The-Shelf solution
from the US will enable increased interoperability with a number
of other nations.
5. The quantities of Javelin being acquired for the Light
Forces and Mechanised Infantry are in the order of 350 Command
Launch Units and ****.
6. All Key User Requirements for the Javelin system are
forecast to be met.
COSTS
7. Expenditure to 31 March 2004 on the LF ATGW is £56
million.
8. The current forecast cost of the Demonstration and
Manufacture Phase of the programme (at 50% confidence) is £318
million, compared with the cost (90% confidence) approved at Main
Gate of £345 million.
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
9. The planned In-Service Date is November 2005 (at 50%
confidence). The ISD (90%) approved at Main Gate is August 2006.
ISD is defined as a brigade trained and equipped.
10. The planned Out-of-Service Date for Javelin is 2025.
ACQUISITION APPROACH
11. The Javelin system is being procured in accordance
with the principles of SMART Acquisition. This included, for example,
the trading off of some lower priority requirements in favour
of increased programme affordability. In addition, competitive
pressures during the Assessment Phase resulted in significant
cost savings and improved procurement terms.
12. Following LF ATGWS Main Gate approval (January 2003),
the contract for Demonstration and Manufacture was placed (February
2003) for procurement of the Javelin missiles and training systems
from the Raytheon/Lockheed Martin Joint Venture. This contract
is combined with a US Foreign Military Sales (FMS) case which
will supply the Command Launch Units (CLU) and the first five
years support of the equipment. It also includes fixed price options
for a further three five year support periods, providing opportunities
for equipment support through life. The combination of Direct
Commercial Sale and FMS represents a pioneering approach that
brings together the benefits of both processes.
13. Javelin was selected following a competition with
the Israeli Spike system offered by a joint venture between MBDA
and Rafael. The competitive pressures resulted in significant
cost savings and improved procurement terms.
14. The Javelin Memorandum of Understanding with the
US allows for future upgrades to the system, in co-operation with
the US, should these be required. Javelin is designed to permit
easy upgrade; the software required to operate the missiles is
held within the Command Launch Units and any software upgrades
that are developed can be easily distributed and rapidly deployed
to the missiles on launch.
15. There are some UK specific modifications to the CLU
including provision of a tripod. However, buying the Javelin system
essentially off the shelf will ensure highly capable performance
is delivered in the shortest possible time and preventing a significant
capability gap developing once MILAN is phased out (the option
of acquiring further MILAN weapons had previously been discounted
as not cost effective). The close working relationships that have
been established with industry, using Smart methodology, will
simplify problem resolution throughout the acquisition process.
16. As a consequence of the off-the-shelf acquisition
strategy, the possibilities for collaboration are limited. However,
several allied nations including Canada, Australia and Norway
have selected Javelin and we are in the process of identifying
areas where co-operation would be of mutual benefit.
17. Training will principally be conducted by simulation
with only very limited live training firings being undertaken.
This approach has been facilitated by rapid advances in simulation
technology and has the benefit that the number of training missiles
we need to procure can be reduced.
INDUSTRIAL ISSUES
18. The JAVELIN joint venture has established a team
of UK industrial partners including BAE Systems, INSYS, Woven
Electronics, Leafield Group Ltd and Thales Optics and has committed
to delivering 100% UK industrial participation.
19. There is likely to be significant world-wide demand
for weapons of this type over the coming years. If Javelin is
successful at meeting these demands there is potential for UK
industry to provide sub-components for these and potential US
Government procurements.
IN -SERVICE
SUPPORT
20. The system has a simple In Service Support strategy.
The missiles are maintenance-free through life, apart from routine
surveillance of the stockpile. Other than very basic repair, the
Command Launch Units and Training Systems will be maintained at
a contractor-run permanent UK repair facility.
NEXT STEPS
21. The next major milestone for the Javelin system will
be its entry into UK service, which is planned for November 2005.
4. WAH 64 ATTACK HELICOPTER
PROJECT SUMMARY
1. The Apache WAH 64 is an attack helicopter, based on
the American AH64D. It is optimised for its long range anti tank
capability. WAH 64 will replace the Lynx / TOW (Tube launched,
Optically Tracked, Wire guided missile) combination previously
used by the Army to attack armoured vehicles and point targets.
WAH 64 is seen as a quantum leap forward in capability, mainly
due to the surveillance and target acquisition capability of the
sensor suite and its significant increase in lethality and survivability
compared to previous systems. The WAH 64 Apache will facilitate
the introduction of an entirely new Air Manoeuvre doctrine and
a new Joint Rapid Reaction capability. Army tactics and formations
will change as a result, and the three Air Assault Regiments of
16 Brigade are each being restructured around two x Apache Squadrons
(total 16 Aircraft) and one Lynx Utility Squadron (12 Aircraft).
2. The WAH 64 prime contract with Westland Helicopters
Limited (WHL) for 67 aircraft (including certification and qualification
of the complete weapons system), support equipment and particular
spares, has a value of £2.2 billion. The warstock munitions
contract with Insys Limited (formerly Huntings Engineering Limited)
was worth £350 million.
3. Key Milestones achieved in the last year include delivery
of the first aircraft to arrive at Dishforth on 8 June 2003, Military
Aircraft Release 6a clearance (which accepted the embodiment of
several elements of Helicopter Integrated Defensive Aids Suite
(HIDAS) and an additional software release into the aircraft,
vital steps towards Initial Operational Capability, IOC), was
achieved on 15 December 2003. 656 Squadron Army Air Corps completed
conversion-to-type training on 20 February 2004. Ship Operating
Limit Trials on HMS Ocean were completed successfully on 30 March
2004.
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
4. The approved ISDbased on the delivery of nine
aircraftat Main Gate was December 1999. However, this was
subsequently revised to December 2000 as a result of decisions
to fit Rolls Royce engines and to ensure that Departmental resources
matched the programme requirements. ISD was achieved on 6 January
2001. Problems were experienced with the delivery of the Training
Service, with the resulting lack of trained pilots leading to
a delay in Apache being fielded. This issue was addressed in the
NAO Report Building on Air Manoeuvre Capability: The Introduction
of the Apache Helicopter published in October 2002. A key recommendation
of the report was that the Department should manage across the
six lines of development. Apache has fully incorporated this recommendation
into its business practices and, as a result, the programme is
now on track to meet the revised Operational Milestones set by
the Air Manoeuvre Policy Group (AMPG) of IOC (four AH and two
Lynx for peace time operations) in August 2004 and Lead Aviation
Task Force availability (the first Apache Regiment) in February
2005. The platform is on target to meet all its KURs, since ISD.
The final aircraft is expected to be delivered in early summer
2004. The aircraft is planned to remain in service until 2030.
SYSTEM PERFORMANCE
5. At the time WAH64 was procured, no Attack Helicopter
that met fully the Department's essential requirements was available
off the shelf. An incremental acquisition approach was adopted
to deliver this shortfall in capability. The first 36 aircraft
were built to an initial, baseline standard and are being retrofitted
with the HIDAS, secure communications, Helicopter Usage Monitoring
system, Low Height Warning System and Collective Training System.
The final retrofitted aircraft is expected to be delivered in
Apr 2005. There were technical problems with the HIDAS but MOD
has agreed a revised, incremental delivery programme with the
contractor. This safeguards the key project milestones set out
above, which are being adhered to.
6. Apache has secure data transmission facilities and
we have allocated resources to ensure compatibility with future
communications systems such as BOWMAN. Additional funding is being
sought for full secure voice communications; at IOC, Apache will
have the capability for secure voice communications with UK ground
troops equipped with "NATO Applique" Bowman radios.
COSTS
7. Expenditure on the Attack Helicopter Platform and
Munitions to date is £2,866 million, whilst the forecast
total cost is £3,196 million, compared with £2,974 million
approved expenditure (adjusted for change in Cost of Capital to
3.5% from Apr 2003). This is well within the 20% tolerance for
pre-Smart Acquisition approvals.
ACQUISITION ISSUES
8. Although Apache was procured pre Smart Acquisition,
a costed Through Life Management Plan (TLMP) has been developed,
including a 30 year strategic roadmap for the modernisation of
the Platform, in alignment with the US Apache Programme. MOD has
close discussions on all aspects of the programme with our US
counterparts and wherever opportunities arise for cooperation,
these are addressed through the US/UK Attack Helicopter Memorandum
of Understanding. We are planning a Capability Sustainment Package
for the platform, addressing issues such as digitisation of the
battlespace, ensuring secure voice and data communications with
other platforms; Beyond Line of Sight Communications in order
to support deep operations; enhanced platform protection to counter
the full range of future threats; and improved ability to deploy
rapidly to support and conduct smaller scale operations.
9. As noted in Paragraph 4, following the NAO report
on deficiencies in the delivery of training, Apache has managed
the programme with requirements across all of the six lines of
development in mind. These describe the full range of issues associated
with the delivery of military capability and identify clear responsibility
for each line of development at the appropriate level. This has
been key to ensuring that the recent project milestones have been
met.
IN -SERVICE
SUPPORT
10. Apache has innovative support arrangements, comprising
spares-inclusive repair contracts with industry for key Line Replacement
Units (LRUs) including the on-shore Special Repair Activity (SRA)
facility at Wattisham (an MOD-owned but Contractor-manned and
-operated repair facility for Apache main sensors). These substantially
reduce both repair turn round times and the need to hold repair
spares stocks compared to MOD's conventional logistic support
model. For the future, the AH Support Reappraisal Project (SRP)
is intended to reduce significantly WAH 64 whole life support
costs. Initiatives being assessed include a range of investments
in reliability improvements and a radical review of the aircraft
maintenance policy. In parallel, the SRP Team is working up proposals
for innovative long-term partnering arrangements to deliver further
Whole Life Cost savings.
5. TYPE 45 ANTI-AIR WARFARE DESTROYER AND ITS PRINCIPAL
ANTI-AIR MISSILE SYSTEM (PAAMS)
PROJECT SUMMARY
1. The Type 45 will be a versatile Destroyer capable
of contributing to worldwide maritime operations in multi-threat
environments. It will succeed the capability currently provided
by the Type 42s. Equipped with the Principal Anti-Air Missile
System (PAAMS), the primary role of the Type 45 Destroyer will
be Anti-Air Warfare (AAW), but in addition, it will be a multi-role,
general-purpose platform capable of operations across the spectrum
of tasks, from peace support to high intensity warfare.
2. Recent achievements on the programme include: the
opening of the Maritime Integration Support Centre at Portsdown
(which will support the integration of the ship's combat system);
letting of a tri-national contract with France and Italy to procure
the PAAMS systems for ships two to six; letting of a contract
(through OCCAR) for the main PAAMS missile buy; the first factory
transmission of the PAAMS multi-function radar; factory acceptance
of the first two Rolls Royce WR21 gas turbines; and the start
of main manufacture on the First of Class, HMS Daring, against
a mature ship design. Main manufacture of the second ship (HMS
Dauntless) is planned to begin in the summer of 2004.
POLICY CONTEXT
AND CAPABILITY
REQUIREMENT
3. The requirement to provide the capability offered
by the Type 45 Destroyer was re-confirmed during the Strategic
Defence Review. The key requirements of the Type 45 are to protect
itself and ships in its company from the threat posed by supersonic
sea-skimming missiles and to contribute to the wider force anti-air
warfare picture. As part of this it is required to provide tactical
control of at least four fixed wing aircraft or four groups of
aircraft assigned to the force. The Type 45 will also be required
to operate its own organic aircraft (either Merlin or Lynx); embark
a deployable force of Royal Marines and meet demanding targets
for range, availability and growth potential. At present, all
of these requirements are expected to be met.
4. Type 45 and PAAMS are planned to replace the capability
currently provided by the Type 42 destroyer and its Sea Dart weapon
system. It is planned that the Type 42s currently in service will
be replaced progressively by Type 45s from 2007.
5. The current planning assumption is for the acquisition
of a class of up to 12 Type 45s.
6. Commonality of many of the PAAMS systems and sub-systems,
including in particular the Aster missile, will ensure a good
level of interoperability with both France and Italy. The ship
will be able to share its operational picture with allies, and
control assets in theatre with NATO land, sea and air forces that
are similarly equipped, providing maximum flexibility in force
mix. The Type 45 is planned to be fitted with the UK Co-operative
Engagement Capability which will greatly enhance the force situational
awareness and bring the full benefits of the Sampson radar (leading
edge radar technology that will form part of the UK PAAMS system)
to other suitably equipped platforms in the task force. The Fully
Integrated Communications System will provide the infrastructure
to support a wide range of communications facilities, including
Bowman, which will provide a secure command and control net with
UK land forces.
COSTS
7. Total expenditure on the project to 31 March 2004
is £1,421 million. The current forecast cost of the first
six ships[4]is **** against
a cost approved at Main Gate, of £5,668 million.[5]
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
8. The definition of ISD for the Type 45 is the date
by which the First of Class will meet the Customer's minimum operational
requirement, as represented by all of the Key User Requirements.
The ISD approved at Main Gate is November 2007; this is currently
under review. Deliveries of the Class are planned to complete
by the middle of the next decade. The Type 45 is planned to have
an in-service life of 25 years, giving it an out-of service date
in the 2040s.
ACQUISITION APPROACH
9. The Type 45 project is effectively hybrid insofar
as the warship element of the project was approved in the SMART
era, while the original approval for PAAMS was in 1999, thereby
pre-dating SMART. The project is currently in the Manufacture
stage of the acquisition cycle.
WARSHIP ACGUISITION
STRATEGY
10. In late 2000, the MoD awarded a contract for the
Demonstration and First of Class Manufacture to BAE Systems Electronics
(the Prime Contractor OrganisationPCO). The MoD accepted
a joint BAE Systems Marine/Vosper Thornycroft proposal for Marine
to assemble the first six ships from "blocks" built
by both companies. The contract was amended to this effect in
February 2002.
11. This strategy was further refined in March 2003 when,
following MoD agreement to a company request, BAE SYSTEMS announced
that all of their Type 45 production work planned to be undertaken
at Barrow would be transferred to their yards on the Clyde. This
was to avoid the risk (which due to slippage on the Astute programme
was then considered to be high) of conflict between the Type 45
and ASTUTE production programmes at Barrow.
PAAMS ACQUISITION STRATEGY
12. Following the termination of the Horizon programme,
collaboration between the UK, France and Italy continued on PAAMS.
Contracts are now in place (through the French contracting authority)
for the development of PAAMS plus systems necessary to equip the
first six Type 45s. To take advantage of economies of scale of
the OCCAR managed Franco-Italian Future Surface to Air Family
programme (which is a tri-service air defence programme using
the same missiles as the PAAMS system) the main PAAMS missile
buy is being managed by OCCAR through the FSAF programme.
BENEFITS OF
SMART ACQUISITION
13. The MoD and Prime Contractor are both committed to
partnering on this programme, which provides the following benefits:
(a) There is open-book working and a Charter outlining
the responsibilities of both sides of the IPT which each side
has confidence in. This has enabled issues and potential problems
to be aired earlier than might have otherwise have been the case,
leading to more effective resolution.
(b) A joint project control system is used by both sides
of the IPT on a day-to-day basis which means that all those involved
on the project have access to the same (up to date) information.
(c) The prime contract contains a gain-share clause which
incentivises both sides to maximise efficiency.
(d) Early design maturity reducing risks introduced by
change.
(e) The ability to "progressively accept" the
ship's design thereby allowing issues to be dealt with as they
arise rather than coming out during the production phase where
they are more expensive in time and money to rectify.
14. In order to get Type 45 and PAAMS in service as quickly
as possible, a strategy of incremental acquisition of platform
capability, from a baseline standard which is both affordable
and achievable in the time to in-service date, has been adopted.
This will enable the insertion of additional capability throughout
the life of the Type 45s as requirements become affordable and
to take advantage of future changes in defence requirements and
advances in technology. Following the placement of the Demonstration
and First of Class Manufacture (DFM) contract on 20 December 2000
it was decided to accelerate part of the Incremental Acquisition
Plan (IAP), and a hull-mounted sonar (the top priority in the
Plan) will be fitted to all the ships on build.
15. The principal cost/capability trade-off in the PAAMS
programme has been the acceptance of a capability sufficient to
meet the threat at ISD, rather than beyond. However, the PAAMS
Full Scale Engineering Development and Initial Production (FSED/IP)
contract includes a Growth Potential Study that examines the modifications
that may be required to meet the emergence of more demanding threats
and new capabilities.
INDUSTRIAL ISSUES
16. The fact that there is an order for six Type 45s
means that there is guaranteed shipbuilding work at BAE SYSTEMS'
yards on the Clyde, and at VT's Portsmouth facility, until at
least the end of the decade. In addition to the shipbuilding contractors
involved, there are around 30 UK firms engaged as major sub-contractors
with many more feeding into them.
17. With PAAMS systems for the first six ships now on
contract, the main issue for industry will relate to the potential
Type 45 class size and avenues for fitting PAAMS or pulling through
its technology to other classes of ship. The key UK elements,
Sampson and associated command and control, are specific to the
Type 45.
18. Export potential for the Type 45 system as a whole
is constrained by its high technological specification and cost,
but elements of the system such as propulsion (the Rolls Royce/Northrop
Grumman WR21 gas turbine), the electric propulsion system (Alstom),
and PAAMS (in particular its associated multi-function radar)
have considerable potential export prospects up to the value of
several billion pounds over the next 15 years.
IN -SERVICE
SUPPORT
19. BAE SYSTEMS is leading study work to examine options
for the optimum support solution for T45, expected to report in
mid 2005.
NEXT STEPS
20. The next significant steps for the programme are
the beginning of production on the second of class (HMS Dauntless)
in the summer of 2004, followed by launch of the first of class
(HMS Daring) towards the end of 2005.
6. METEOR
PROJECT SUMMARY
1. Meteor is an all-weather, beyond visual range air-to-air
missile, 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.
2. Meteor is currently in the Demonstration Phase. Since
contract let, the project has been performing well against its
schedule.
POLICY CONTEXT
AND CAPABILITY
REQUIREMENT
3. The Beyond Visual Range Air-to-Air Missile (BVRAAM)
requirement is for a medium range air-to-air missile for Typhoon.
Meteor will be the primary air-to-air weapon for Typhoon, and
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. The Strategic Defence Review concluded
that BVRAAM remained a key capability.
4. Currently, Meteor is forecast to meet all the Key
User Requirements agreed at Main Gate. The Meteor Main Gate approval
includes a requirement to procure Advanced Medium Range Air-to-Air
Missiles (AMRAAM) as an interim capability for Typhoon, pending
the availability of Meteor. The total number of missiles is confidential
but will be supplied if required.
5. The BVRAAM programme was conceived exclusively for
Typhoon, where the main carriage method is semi-recessed under
the fuselagea 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, we are conducting an assessment of Meteor's deployability
from the UK's Joint Strike Fighters.
COSTS
6. Expenditure up to 31 March 2004 is £118 million.
The current forecast cost (at 50% confidence) is £1,354 million,
including the purchase of interim AMRAAM missiles, compared to
a cost (90% confidence) of £1,362 million approved at Main
Gate. The approval and forecast have been changed to reflect the
revision to the Cost of Capital Charge. There has been a cost
increase of £16 million since the last report, driven principally
by: cost increases for AMRAAM; the net effect of $ and
exchange rate variations on AMRAAM and Meteor respectively;
and increased provision for UK ranges for the trialing of Meteor.
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
7. Meteor ISD definition is the achievement of an operational
capability with an initial number of missiles and supporting infrastructure.
8. Current forecast ISD (50%) is August 2012, which matches
the ISD of August 2012 (90%) approved at Main Gate.
9. Meteor has a 25-year design life, and is expected
to remain in service until beyond 2040.
10. The delivery of the first batch of AMRAAM 120C-5
missiles to provide an interim BVRAAM capability for Typhoon will
be complete by late 2006.
ACQUISITION APPROACH
11. The Meteor programme embodies a number of Smart Acquisition
principles. Importantly, the contractor has agreed to a series
of four key technological milestones, to demonstrate successful
progress during the development phase. If MBDA fails to achieve
any of these milestones, against clearly measurable and acceptable
criteria, termination of the contract can be initiated, with all
monies returned to the partner nations.
12. Meteor is a collaborative project with Germany, Italy,
Spain, France and Sweden. An MOU, setting out the contractual,
financial and management arrangements, has been signed by all
partner nations. This appoints the UK as the lead nation; responsible
for the procurement of Meteor on behalf of all the partners. Germany's
concluding signature of the MOU in December 2002 enabled the UK
to award the Meteor contract to MBDA UK Ltd that same month. MBDA
UK Ltd is the Meteor prime contractor and has placed principal
subcontracts with its sister MBDA companies in France and Italy,
and with suppliers in Germany, Spain and Sweden. The development
workshare arrangements detailed in the MOU, and now reflected
in the Meteor contract, are based principally on technical excellence,
manageable risk, and best value for money. The UK development
workshare is 39.6%. The Meteor contract covers development, production
and in-service support (10 years from delivery of the first production
missile). Currently, the other partner nations have committed
only to development, but production and support options exist
within the contract, which it is envisaged the partner nations
will wish to exercise during the progress of the development programme.
13. Meteor employs a modular design, which facilitates
the cost-effective upgrade of sub-systems to exploit emerging
technologies and to match the evolving threat. There are no current
plans to enhance the missile's performance once introduced into
service, with the exception that the missile's processing algorithms
can be reprogrammed to optimise seeker performance against new
targets and emerging counter-measure techniques. The energetic
(ie explosive) elements of the missile are "lifed" items,
and there is a planned mid-life replacement of these items.
14. 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 to meet the full capability requirement, were: Raytheon's
AMRAAM; Matra's MICA; Alenia's Aspide; and the BAe Dynamics' Active
Skyflash.
15. A contract is being negotiated with the US manufacturer,
Raytheon Missile Systems, for the procurement of the interim solution
AMRAAM 120C-5 missiles, for delivery in 2006. Once those have
been delivered, the current in-service stock of AMRAAM 120B missiles
will be refurbished, re-motored and rebuilt as AMRAAM 120C-Ss,
for use on Typhoon. Once Meteor becomes available, those AMRAAM
12CC-S missiles will continue to be available for use on Tornado
F3 until its out-of-service date, and can continue to be employed
on Typhoon for operations that do not demand the long range capabilities
of Meteor. They can also be used on Joint Strike Fighter.
INDUSTRIAL ISSUES
16. 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 have stated that a total of 2,400 jobs would be created or
sustained in Europe; 1,200 of which are in the UK.
17. Meteor has good prospects for sales, particularly
as an integrated package on Typhoon. Sweden and France could widen
the opportunities for overseas sales through sales of Gripen and
Rafale, respectively.
IN -SERVICE
SUPPORT
18. 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 logistic support. Contracts after the initial
10-year period will be subject to negotiation.
19. 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.
20. 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.
NEXT STEPS
21. The Meteor development programme is fully holding
to its contracted schedule. Free jet trials of the ramjet motor
in a supersonic wind tunnel are scheduled to complete in early
2005 and will provide the basis for clearance for the first air
launched demonstration firings of the missile (from a Gripen aircraft),
commencing in early 2006. These air-launched firings support the
demonstration of achievement of the programme's Key Milestones
1 and 2, scheduled for completion in late 2006 and mid 2007 respectively.
7. ASTUTE
PROJECT SUMMARY
1. The Astute Class will replace the existing Swiftsure
and Trafalgar Classes of nuclear-powered attack submarines. Its
greater weapons capacity, improved communications facilities,
and enhanced ability to operate in the littoral represents a significant
enhancement of capability for the Royal Navy.
2. In February 2003, the Government announced that it
had reached agreement with BAE SYSTEMS on a way ahead for the
Astute and Nimrod programmes. Since then a new structure for the
Astute contract has been agreed which reduces risk, while placing
new incentives on the company to perform. The MoD increased its
funding by around £430 million (in cash terms) as against
an increased contribution by BAE SYSTEMS of about £250 million.
An amendment to the Astute contract to enact the "Agreement"
was signed on 17 December 2003.
3. On 22 October 2003, Min (DP) performed the "keel-laying"
ceremony for HMS AMBUSH, the second of the three Astute-class
submarines on order.
4. The "Agreement" sought significant project
management improvements. Since February 2003, all the programme's
anchor milestones planned to date have been met on time. The Earned
Value Management technique is being introduced, and is due to
provide initial reports by July 2004.
POLICY CONTEXT
AND CAPABILITY
REQUIREMENT
5. The 1998 Strategic Defence Review reiterated the need
to maintain a strong, well-balanced maritime force, including
a modernised nuclear-powered attack submarine capability, able
to conduct joint operations with its NATO partners. Astute Class
submarines will fulfil this role from 2009. They will be flexible,
adaptable platforms with a global reach. As well as the continued
role of SSNs in supporting Trident SSBNs, the Astute class attack
submarines will undertake a wide range of other tasks, including:
supporting Special Forces;
land attack (Tomahawk Land Attack Missile -TLAM);
intelligence gathering;
support of surface forces such as task groups.
COSTS
6. Expenditure to 31 March 2004 on Astute is £1,331
million. The current forecast cost of £3,498 million takes
full account of the "Agreement", compared to £2,578
million which was approved at Main Gate in 1997. Last year's report
made a forecast (in hindsight pessimistic) of £3,600 million
ahead of the complex negotiations that followed.
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
7. The ISD is defined as Stage 1 acceptance of HMS ASTUTE
from the contractor, which encompasses "safe operation and
the start of operational work up". The current forecast ISD
is January 2009, compared to that of June 2005 approved at Main
Gate.
8. The in-service life of each Astute class submarine
is planned to be 25 years.
ACQUISITION APPROACH
9. The prime contract for the Astute Class Submarine
was placed in March 1997 which makes this project pre-Smart Acquisition.
10. Following restructuring and rebaselining of the programme,
measures have been introduced to incentivise and improve project
management. This includes the amended Target Cost Incentive Fee
arrangement for the design and development, construction, testing
and commissioning of HMS ASTUTE. HMS AMBUSH and HMS ARTFUL continue
construction pending agreement of prices; once there is sufficient
learning from the first submarine. Project management methods
introduced include the use of anchor milestones, risk-sharing,
Earned Value Management, joint MoD/BAE SYSTEMS three-point estimates,
and knowledge transfer from the US submarine supplier, the Electric
Boat division of General Dynamics. The MoD has increased its permanent
presence at the Barrow shipyard and now works with much greater
transparency between the MoD and BAE SYSTEMS on risks and opportunities.
INDUSTRIAL ISSUES/SUBSEQUENT
PROCUREMENT
11. The contract with BAE SYSTEMS is for three Astute
Class submarines, HMS ASTUTE, HMS AMBUSH and HMS ARTFUL. The proposals
for a second buy of up to three more Astute Class submarines had
been expected during 2002, but difficulties with the existing
programme have delayed this. BAE SYSTEMS' equipment subcontractors
have completed, or are nearing completion, orders for the first
three submarines and are heavily dependent on future Astute orders.
12. BAE SYSTEMS continue to examine methods to reduce
cost to benefit the Astute programme. As part of this, the company
announced a rationalisation programme on 2 April 2004, to reduce
their workforce by 760 people, following the delivery from the
yard of the Landing Platform Dock, HMS BULWARK.
13. The MoD, with US DoD, has been facilitating assistance
from the Electric Boat Division of the General Dynamics Company
to help strengthen BAE SYSTEMS' skills, notably in Computer Aided
Design management, and to benefit from recent Electric Boat experience
in the SEAWOLF and VIRGINIA submarine programmes for the US Navy.
IN -SERVICE
SUPPORT
14. The strategy for an initial period of Contractor
Logistic Support has been revisited. This has been made possible
by the delay to the Astute programme, emerging Defence Logistic
Organisation initiatives, and an inability to converge with Industry
on an acceptable price for the novel, Prime Contract-led, support
period. A definition study has been undertaken with key suppliers[6]
that successfully identified a framework for a new support solution.
This is now being developed in a MoD-led Joint Integrated Project
team with Industry.
NEXT STEPS
15. Key future activities include:
Conclude the pricing of HMS AMBUSH and HMS ARTFUL
once we have sufficient learning from the first submarine.
Consider further orders of the Class, recognising
many factors, including: the plans for the retirement of in-service
Swiftsure and Trafalgar Class submarines; the cost-effective interval
between successive submarines of the Astute Class; and BAE SYSTEMS
cost and schedule performance on the first three submarines.
8. NIMROD MARITIME RECONNAISSANCE AND ATTACK AIRCRAFT
MK4
PROJECT SUMMARY
1. The Nimrod Maritime Reconnaissance & Attack Mk4
(MRA4) will succeed the current Nimrod MR2 as the RAF's maritime
patrol aircraft (MPA), providing significantly enhanced maritime
surveillance and attack capability (primarily Anti Submarine and
Anti Surface Unit Warfare) through improved aircraft and sensor
performance. The aircraft, training system and in-service support
are being procured from BAE SYSTEMS (BAES) as Prime Contractor.
2. In February 2003 the government announced that it
had reached agreement with BAE systems on the way ahead for NIMROD
following identification of significant time and cost overruns
and losses to the company. Since then, a new structure for NIMROD
has been agreed which reduces risk and provides new incentives.
This recognised that there was, and remains, no alternative comparable
programme, as well as the potential of the NIMROD MRA4 aircraft
to offer longer term capability enhancements.
POLICY CONTEXT
AND CAPABILITY
REQUIREMENT
3. The Strategic Defence Review (SDR) confirmed the requirement
for a maritime patrol aircraft with the capabilities of MRA4.
The multi-role surveillance and attack capability provided by
MPA facilitate and support the world-wide expeditionary deployment
of joint UK forces, optimising access to the littoral. MPA are
highly flexible and their capability is often used to provide
much needed support to other tasks such as Homeland Security,
*** and Search and Rescue, some of which will be in support of
Other Government Departments (OGDs).
4. The currently planned requirement is for 18 MRA4 aircraft.
The Nimrod MRA4 will provide longer range and patrol endurance,
improved sensor performance and communications. Enhanced processing
capability, greater automation and improved ergonomics will allow
a reduction in crew numbers from the existing Nimrod MR2 minimum
of 13 to 10.
5. Concept work on the adaptability of the MRA4 is exploring
the extent to which the aircraft can serve as a multi-role platform,
contributing to Network Enabled Capability and helping to meet
the UK's future Intelligence, Surveillance, Target Acquisition
and Reconnaissance (ISTAR) needs.
COSTS
6. Expenditure to 31 March 2004 on the Nimrod MRA4 programme
is £1.8 billion. The current forecast cost for the programme
is £3.5 billion compared to £2.8 billion approved at
Main Gate and the £3.4 billion reported in last year's survey.
However, production prices beyond the three development aircraft
remain to be negotiated.
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
7. The In-Service Date (ISD) for Nimrod MRA4 is defined
as the delivery of the sixth production aircraft to the Royal
Air Force (RAF) together with the associated infrastructure and
personnel to support the in-service use of the aircraft. The first
series production aircraft is expected to be delivered in 2008;
the currently forecast ISD is 2009 compared to the date of 2003
approved at Main Gate. The February 2003 Agreement between the
MOD and BAE SYSTEMS made further production, beyond the first
three development aircraft, dependent upon the design and development
phase delivering a product of acceptable maturity.
8. Nimrod MRA4 has an assumed in-service life of 25 years
based upon 650 flying hours per year. This results in an out of
service date (OSD) of 2034, but a longer life may be feasible
9. 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. MOD has 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.
ACQUISITION APPROACH
10. The MRA4 programme pre-dates the introduction of
Smart Acquisition. The original 1996 contract for the supply of
aircraft, training systems and an interim support package was
the result of competitive tendering, with BAE SYSTEMS appointed
as the prime contractor.
11. The February 2003 Agreement changed the contract
from the previous fixed price basis, to a Target Cost Incentive
Fee (TCIF) arrangement for Design and Development. A contract
amendment to this effect was signed on 23 February 2004. The Department
believes the TOIF mechanism to be the best means of incentivising
BAE SYSTEMS to deliver the aircraft without further cost and time
slippage. Beyond an outer cost boundary of ***, the Department
is liable to bear all of the excess (subject to Departmental approval
for work beyond that point). Under the re-structured contract,
design/development and manufacture have been separated as far
as possible. This will reduce risk to the subsequent production
programme.
12. The production price for all aircraft has yet to
be negotiated, although a unit cost aim was set by the Agreement.
The recent contract amendment therefore refersbut does
not committo an option for the production of the remaining
15 aircraft. However, the contract allows for the approval of
long lead items and activity to preserve skill sets in the supply
chain, where appropriate, and minimise risk to the ISD schedule.
In this context, and as part of the work done by BAE SYSTEMS under
the old fixed price contract, substantial commitments have already
been made to long lead materiel requirements for production.
13. The re-structured contract has provided a contract
framework that has enabled the Department and BAE SYSTEMS to work
together much more closely and effectively, with combined resources
and with regular reviews of risk and progress. The reformed project
control system (integrated schedule, earned value management (EVM)
and risk management) is in place and recent independent reviews
have confirmed improving pace and progress. The MOD and the Company
have committed to ensuring that a proportion of future payment
is related to Earned Value performance.
INDUSTRIAL ISSUES
14. The MOD has worked closely with the Company to restructure
the Nimrod MRA4 programme so that design and development activity
could be brought to an effective and timely conclusion. Except
for work being carried out by major sub-contractors, where we
have agreed with the Company to allow work to continue rather
than re-negotiate major contracts, the controlled stop in the
supply chain has now largely been implemented, except to the extent
where it makes sense to continue with low level production activity
to protect essential skills and the schedule.
15. The re-start of production activity depends on acceptable
design maturity, price negotiation and MOD approvals. The MOD
and BAE SYSTEMS are working to determine the most cost effective
overall programme.
IN -SERVICE
SUPPORT
16. Joint work with BAE SYSTEMS is on-going to define
the scope and scale of the in service support structure for Nimrod
MRA4, including engagement with the Company's supply chain. This
work will help to inform the quality of the cost estimates to
inform departmental decisions about through life support. The
aim is to develop commercial arrangements that enable a coherent,
integrated support solution, inclusive of aircraft availability,
to be in place for the Ready For Training (RFT) and Logistics
Support Date milestones which need to be achieved before ISD.
NEXT STEPS
17. The key priority remains the 3 aircraft development
and manufacture programme, whilst work continues in parallel to
develop the in service support solution, the most effective further
production programme and to further embed reformed programme management.
18. Engine trials are now underway on the first aircraft,
PA-i. These will lead to low speed taxi trials in June 04 and
then first flight, scheduled for July to August 2004 PA-2, evaluating
the mission system, is scheduled to fly late 2004 and PA3 in mid
2005.
9. BOWMAN
PROJECT SUMMARY
1. BOWMAN will provide a secure, robust, tactical data
and voice communications system in support of land, amphibious
and air manoeuvre operations, to replace the Clansman combat radio
and some of the HO infrastructure element of the Ptarmigan trunk
communication system. It will be a key enabler of Network Enabled
Capability and also play a major role in the MOD's Command and
Battlespace Management initiative under which it will be progressively
integrated with specialist applications. It will serve as the
primary means of voice and data communication for tactical level
operationscharacterised by mobility and undertaken by numerous
individual fighting platforms and dismounted combatantsand
will be based on radio communications that can operate without
relying on fixed infrastructure.
2. The BOWMAN system will be made up of: a number of
radio communications sub-systems that are connected to provide
a tactical internet; a range of computers that provide messaging,
situation awareness and management information; a local area sub-system
that interconnects data terminals and voice users within a vehicle
or group of vehicles forming a deployed divisional, brigade or
battlegroup headquarters; and connections to trunk, satellite
and strategic communications systems. It will have a capability
for fast data communications and connections with external networks,
and high-quality voice and data transfer. As well as being man-portable,
BOWMAN will be an integral part of the communications fit of major
equipments such as the Challenger two Main Battle Tank, helicopters
such as Merlin, and warships, including T45.
3. BOWMAN achieved its ambitious ISD on 26 March 2004,
ahead of the target of 30 March. On current plans, BOWMAN equipment
will be fitted to some 20,000 vehicles, 139 naval vessels (including
five capital ships) and 239 aircraft, and some 75,000 Service
personnel will be trained to use it. Around 47,000 radios (excluding
the Personal Role Radio) and 26,000 computer terminals will be
procured.
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
4. The BOWMAN ISD was defined as "a Brigade Headquarters,
two mechanised battalions and support troops capable of engaging
in Operations Other than War" (ie peacekeeping). The latest
acceptable ISD date approved at the main investment point was
December 2004. ISD was achieved on 26 March 2004. BOWMAN's planned
Out-of-Service Date is 2025.
SYSTEM PERFORMANCE
5. The achievement of Key User Requirements is linked
to the progressive stages of System Acceptance. For BOWMAN, this
will be concurrent with the delivery of the operational war fighting
capability in the land, amphibious and air manoeuvre components.
The BOWMAN Initial Operating Capability was fielded and put through
operational field trials towards the end of 2003. Further trials
were conducted in March 2004 on an uplifted capability fielded
to meet the ISD. We plan to field the Full Operating Capability
later in 2004 to deliver the operational war fighting capability
for the land component in 2005.
6. The provision of robust secure VHF and HF voice communications
down to section level demonstrated during the trials conducted
in March 2004 represents a step-change in capability for the Armed
Forces. Voice intelligibility is proving markedly superior to
CLANSMAN, electronic protection modes allows operation in a hostile
electronic environment that would defeat CLANSMAN, and embedding
a bespoke cryptographic processor has removed the need to use
time-consuming methods of encoding critical tactical information.
The ability of BOWMAN to deliver other functions, such as automatic
position reporting and the ability to pass digital data around
the battlefield, has been demonstrated and further trials of these
are planned this summer.
7. International interoperability will be achieved through
the implementation of all endorsed NATO Standards applicable to
the operating environment. To achieve secure interoperability,
BOWMAN mandates the endorsed NATO appliqué unit to meet
NATO encryption interoperability standards.
COSTS
8. Costs incurred to 31 March 2004 are estimated to be
some £1,100 million. On a full resource basis, the current
forecast Demonstration and Manufacture cost of BOWMAN is estimated
to be £1,991 million compared with a cost of £2,041
million approved at Main Gate. These figures are consistent with
the estimated acquisition costs, excluding long term support,
previously reported.
ACQUISITION ISSUES
9. Where BOWMAN is mandated as part of a future capability
supporting the land component, for example the Future Rapid Effects
System, the additional equipment will be sourced direct from the
suppliers within that procurement. Software upgrades to correct
identified faults in, or to enable the integration of further
specialist applications with, BOWMAN will be incorporated within
an annual incremental acquisition supporting the land component
Command and Battlespace Management capability. Although it is
too early to approve plans to enhance BOWMAN, we recognise that
there will be requirements to address hardware obsolescence and/or
software unsupportability either on the basis of incremental acquisition
or through periodic upgrades. We adopted an incremental acquisition
approach and delivered the Personal Role Radio ahead of the main
BOWMAN system. Spending more than the Smart Acquisition target
on risk reduction activities during the Assessment Phase enabled
the project quickly to re-open the competition following the decision
to remove preferred supplier status from the Archer consortium
in 2000. The Prime Contract incorporates smart acquisition principles,
in partnering, incentives and a shared data environment with Industry.
IN -SERVICE
SUPPORT
10. The Prime Contractor has been responsible for supporting
the equipment since it entered service. An MoD developed support
solution will be initiated from July 2004. The strategy is to
use proven traditional methods of support on operations, while
delivering an innovative, business-proven solution for more effective
support when not deployed on operations. These solutions will
combine MoD and contractor provided support systems.
10. TYPHOON
PROJECT SUMMARY
1. Typhoon (formerly Eurofighter) is an agile fighter
aircraft that will serve as the cornerstone of the RAF's future
fighting capability. It will bring a significant increase in our
air superiority capability as it replaces the Tornado F3 while
its multi-role capability will allow Typhoon also to fulfil the
ground attack roles now performed by the Jaguar. Its adverse weather,
multi-role capability will enable Typhoon to be employed in the
full spectrum of air operations from air policing to peace support
through to high intensity conflict. 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.
2. Typhoon achieved Type Acceptance in June 2003 which
signalled the start of the process to bring the aircraft into
service with the RAF[7]
Following Type Acceptance, Typhoon flight test and safety evaluation
was conducted and, after some delays, the first aircraft was accepted
off contract in December 2003. This allowed RAF Operational Evaluation
and Service Instructor Pilot Training at BAES Warton to get under
way utilising the 18 month initial contractor support arrangements
known as "Case White". The first solo RAF flight took
place in February 2004 and to date, four RAF aircraft have been
accepted off contract. Very good progress has been made and some
100 sorties have now been flown. On 27 February 2004 the first
instrumented production standard single-seat Typhoon made its
maiden flight in Spain.
3. International Memoranda of Understanding (MoU) between
the four partner nations envisage a total requirement for 620
aircraft to be procured in three tranches: 180 for Germany, 121
for Italy, 87 for Spain and 232 for the UK. The nations are committed
contractually to the first tranche which includes 55 aircraft
for the UK. Future production orders would commit the UK to 89
and 88 aircraft for Tranches 2 and 3, respectively. Industry proposals
for Tranche 2 are currently being evaluated; Tranche 3 is not
scheduled to be ordered before 2007.
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
4. ISD is defined as the date of delivery of the first
aircraft to the Royal Air Force and this was achieved in 2003.
5. The Typhoon ISD slipped by a total of 54 months compared
with the date approved in 1987 at the start of formal development
(the point now regarded as "Main Gate"). Of this slippage,
32 months has been attributed to difficulties with the application
of complex technologies required to enable the equipment to meet
the original Staff Requirement. The remaining 22 months delay
was caused by the "reorientation" of the programme in
response to the end of the Cold War, budgetary pressures on the
four nations and to delays in signature of the MoU for the Production
and Support phases. Of the 54 month overall slippage to ISD, a
total of 12 months occurred after the award of the production
contracts in 1998.
6. 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. The Operational Employment Date (OED), defined
as the date when Typhoon capability is declared to NATO, is currently
***, a date assumed in the latest budgetary round to provide a
high-confidence basis for RAF planning. There is no gap between
the planned out of service dates for the F3 and Jaguar fleets
and the OED of Typhoon.
7. The service life of the Typhoon fleet is expected
to be ***.
SYSTEM PERFORMANCE
8. Many of the Key User Requirements are not capable
of demonstration at ISD either because they relate to in-service
reliability over time, or because of the limitations routinely
placed on a new aircraft's initial flight "envelope"
at such an early stage. Currently, only one of the 10 KURs is
predicted not to be achieved and that relates to the aircraft's
landing distance. The shortfall (in the most adverse conditions)
was accepted by the Department's Equipment Approvals Committee
in 1994.
9. The standard of aircraft delivered at ISD has proved
satisfactory for initial service pilot training and for the operational
test and evaluation activity planned for this stage in the programme.
The Typhoon programme philosophy is to provide incremental capability
clearances that match the evolving requirements of the nations'
air forces. The first of these, IOC, should occur towards the
end of 2004. Full Operating Clearance (FOC) is defined as the
functionality, cleared for operational use, of the last Tranche
1 aircraft. The precise level of capability to be provided at
this stage is the subject of ongoing discussions between the nations
and industry and will form the baseline for the Tranche 2 aircraft.
The final planned capability increments will be delivered through
Enhanced Operational Capability (EOC) packages which will be introduced
after Tranche 2 deliveries start to provide Typhoon with the full,
multi-role capability. The Meteor Beyond Visual Range Air to Air
Missile is expected to be cleared for use on the aircraft at this
stage.
10. Early experience, albeit with only 100 hours of UK
in-service flying experience, has shown a good level of aircraft
availability and reliability and pilot feedback is particularly
encouraging.
11. Interoperability is fundamental to the Typhoon design.
The programme has adhered to NATO Standardisation Agreements (STANAGs)
and protocols to ensure Typhoon's compatibility with current and
future systems, both operational and logistic.
COSTS
12. Expenditure to 31 March 2004 is estimated at £8.6
billion.
13. Typhoon total UK acquisition costs are currently
forecast at £19,018 million compared to £16,670 million
at "Main Gate" approval dating from 1987, which represents
an increase of some £134 million since last year's review.
The majority of this increase, some £1 30M, relates to Cost
of Capital Charge (CoCC) increases as a result of an assumed six
month delay to the aircraft's `beneficial use date' as defined
for accounting purposes.
ACQUISITION ISSUES
14. The design standard of delivered aircraft will follow
an incremental acquisition path, with the first aircraft being
delivered to an initial standardto allow early trainingand
the full standard delivered later to meet the declaration of operational
capability.
15. The programme has encountered problems primarily
due to the lack of development maturity and the major overlap
between the various phases of the CADMID cycle. The main learning
point, reflected in the Smart Acquisition reforms, is that a greater
proportion of costs should have been expended on risk reduction
activities prior to commencing development and reducing the large
overlap between the phases. Actions have now been taken to ensure
that these issues are fully addressed prior to placing the Tranche
2 production contract.
16. Whilst there are clear benefits from collaboration,
the decision-making process can be slow and reconciling national
requirements can be difficult. The problems with lack of design
maturity and overlap between phases was greatly compounded by
the poor industrial organisation (in this case, national partner
companies reporting to a co-ordinating management company) for
understanding, planning and managing such a large and complex
programme. The Smart Acquisition process has also highlighted
shortfalls and inefficiencies in the way industry and work is
organised. These issues are being addressed to ensure improvement
in the industrial arrangements going forward with Tranche 2. Similarly,
improvements are being sought in the organisation of the NATO
Agency (NETMA) which administers Typhoon contracts on behalf of
the four partner nations.
17. Unlike previous programmes, where major enhancements
were incorporated via a major in-service upgrade, we shall, following
Smart Acquisition principles, establish a programme for through-life
evolution of the RAF Typhoon fleet. The aim is to acquire and
incorporate emerging technology, on an incremental basis, to maintain
the capability of the weapon system. Partnering between the MoD
and industry will provide the necessary expertise and focus to
enable us to identify, prioritise and pursue modifications to
Typhoon that balance operational effectiveness, life cycle costs,
and component obsolescence issues.
18. Typhoon has major significance for the UK defence
and aerospace industry sustaining some 16,000 direct UK jobs at
BAE SYSTEMS, Rolls-Royce, and direct subcontractors such as Smiths.
It is also expected to sustain, directly and indirectly, some
100,000 jobs across the UK when the aircraft is in full-rate production.
Typhoon further helps secure key skills and important supply chain
benefits which will maintain UK industry's capability in advanced
combat aircraft programmes.
IN -SERVICE
SUPPORT
19. Support for Typhoon is being managed collaboratively
to reduce life-cycle costs. MoUs and International Framing Agreements
aim to ensure that all elements of the project are taken forward
on an agreed international basis. Costs are shared by the four
nations involved in the programme, based on a variety of funding
"keys" depending on the type of support, but are broadly
in proportion to the aircraft off-take of each nation. This is
the first major international project to apply integrated logistic
support (ILS) procedures, thus enabling all aspects of logistic
support to be optimised. Emphasis is being placed on partnering
with industry to define the most cost-effective solution.
20. The RAF is closely involved in the planning process,
to ensure that the end users contribute to the development of
support policy and have a clear understanding of the developing
support concepts. The Typhoon support strategy will be compliant
with the DLO Support Solutions Envelope.
21. From the limited time that Typhoon has been in RAF
Service under Case White, it is not possible to draw any concrete
conclusions regarding support. However, the early signs are encouraging.
Aircraft serviceability rates have been satisfactory given the
current immaturity of the Weapon System. RAF groundcrew find the
aircraft easy to maintain at first line and have had little difficulty
converting to the new "paperless" maintenance management
system. When faults have occurred, diagnosis using the available
test equipment and databus analysers has been relatively straightforward.
"Teething" problems include the aircraft software generating
a large number of spurious fault indications, which have had to
be cleared laboriously on the Ground Support System at the end
of each day's flying. However, the next aircraft software release
is imminent, which will largely eliminate this problem.
11. WATCHKEEPER
PROJECT SUMMARY
1. The WATCHKEEPER system will consist of unmanned air
vehicles, sensors, and ground control stations. It will provide
UK commanders in the land environment with a 24-hour, all-weather,
Intelligence, Surveillance, Target Acquisition and Reconnaissance
(ISTAR) capability, providing accurate, timely and high quality
imagery to answer commanders' critical information requirements.
2. Proposals for the delivery of WATCHKEEPER have been
received from Thales and Northrop Grumman and are currently being
assessed prior to the main investment decision.
POLICY CONTEXT
AND CAPABILITY
REQUIREMENT
3. The UK continues to move towards the goal of fully
supportable expeditionary forces that are capable of decisive
force projection and will be able to act rapidly and decisively
at a place of their choosing and with an enhanced detect, decide
and destroy capability. The Defence White Paper stresses the need
to exploit new technologies, introducing multi-role capability
and to develop a Network Enabled Capability, the heaviest burden
of which will fall on the "key enablers" of "better
intelligence and target acquisition". The White Paper also
stresses the need for the network to produce "effects that
can far exceed the sum of the parts". This area is one where
the capabilities offered by a UAV system, such as persistence
and endurance, are best able to contribute. UAV systems also offer
significant growth potential, allowing for inclusion of new technologies.
4. The Strategic Defence Review New Chapter identified
the ability to gather information about an opponent and to then
use it to maximum effect as central to future combat capabilities
in both high intensity conflicts and peace support operations.
5. Within this strategic context, WATCHKEEPER will be
a critical element of tactical ISTAR capability in the land environment.
It will enhance commanders situational awareness of the battlespace
such that UK forces can achieve information superiority, thereby
exploiting Network Enabled Capability to facilitate decision making
and effects-based targeting.
6. The broad range of users of the WATCHKEEPER product
will require imagery and imagery intelligence (IMINT) for immediate
support to manoeuvre operations concurrently at both unit and
formation level. They will require access to imagery across the
full range of climatic environments, the ability to identify and
accurately locate targets of interest and provide data into the
"kill chain" for subsequent engagement by weapon systems.
The system is required to integrate with BOWMAN and the accompanying
management applications to ensure that WATCHKEEPER is part of
the Land communications network. WATCHKEEPER is required to be
able to deliver a capability to support rapid reaction forces
deploying by air or sea. The requirements include the requisite
standards to achieve interoperability with other NATO UAV systems.
7. The number of systems to be procured is the subject
of an ongoing assessment which will inform the main investment
decision. We are aiming to procure sufficient systems to be able
to support two concurrent Medium Scale deployments.
COSTS
8. To 31 March 2004, expenditure on WATCHKEEPER has been
£50.5 million.
9. The current forecast cost (at 50% confidence) for
the Assessment Phase is £51.7 million against an Initial
Gate approval of £51.7 million.
10. The overall cost of the programme is in the region
of £1 billion.
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
11. The definition and timing of the In-Service Date
for an Initial Operating Capability for WATCHKEEPER will not be
confirmed until Main Gate. Proposals have been solicited on the
basis of delivering a UAV capability to support a Medium Scale
warfighting deployment by the end of 2006.
12. The main investment decision for WATCHKEEPER is planned
for late 2004.
13. The currently planned Out-of-Service date for the
WATCHKEEPER capability is 2036.
ACQUISITION APPROACH
14. WATCHKEEPER was anchored in the Smart Acquisition
process at Initial Gate. The programme combined three UAV Requirements
(SENDER, SPECTATOR and the Phoenix Enhancement Programme) to derive
a single statement of requirement. The acquisition strategy has
been based on selecting UAV systems to suit a defined capability
requirement rather than an air vehicle centred approach.
15. The programme is completing the Assessment Phase
of the acquisition cycle and is in the process of recommending
the preferred system solution to support a main investment decision
to enter Demonstration and Manufacture next year. Through evaluation
and system concept demonstration, the Assessment Phase has driven
down technical and schedule risks and derived the whole life costs
associated with the proposed options. Trade-offs between User
and System Requirements continue to be identified and final decisions
can shortly be made, taking full account of the impact across
all Lines of Development and supported by balance of investment
studies.
16. Alternative acquisition options have been considered.
Collaboration was explored during the early stages of the Assessment
Phase but it was not possible to align requirements. High levels
of co-operation amongst allied nations on matters of requirement
definition, technology, operational experience and acquisition
are being maintained.
17. The requirement to deliver an early capability, coupled
with the need for significant system integration with the emerging
Network Enabled Capability requirements, has led the DPA and the
potential prime contractors to adopt an incremental approach.
This approach also supports the Force Readiness Cycle and provides
for a phased uplift of capability at discrete intervals.
18. Opportunities to enhance WATCHKEEPER beyond the Full
Operating Capability have been considered during the assessment,
with options for enhancement included in the bidders' proposals.
Assets such as airframes will in any case need to be renewed during
the life of the programme.
INDUSTRIAL ISSUES
19. WATCHKEEPER will be the first major UK procurement
of UAV systems since they achieved a heightened prominence for
Defence. Both the potential prime contractors, Thales and Northrop
Grumman, will offer UK industry the opportunity for involvement
in the programme and, potentially in the growing UAV world wide
market through Industrial Participation and the transfer of UAV
system technology to the UK.
IN -SERVICE
SUPPORT
20. WATCHKEEPER will be operated and maintained by military
personnel with in-depth repair carried out by the selected contractor.
It will be supported by a comprehensive Contractor Logistic Support
package and will be compliant with the Defence Logistic Organisation's
Support Solutions Envelope (SSE).
21. It is planned to have the initial logistic support
elements in place by early 2006.
NEXT STEPS
22. The next significant step for the project will be
completion of the assessment of the two WATCHKEEPER bids, leading
to a main investment decision currently planned for later in 2004.
12. FUTURE JOINT COMBAT AIRCRAFTFJCA (FORMERLY
FUTURE CARRIER BORNE AIRCRAFTFCBA)
PROJECT SUMMARY
1. The Future Joint Combat Aircraft (FJCA) will replace
the capability currently provided by the RN's Sea Harrier and
the RAF's Harrier GR7/9 in the second decade of this century.
The aircraft will be operated in a joint force, from both the
new aircraft carriers and land bases, in the manner of the current
Joint Force Harrier.
2. The Short Take Off and Vertical Landing (STOVL) variant
of the US-led Joint Strike Fighter (JSF) has been selected to
meet the requirement, and the UK is currently engaged in the System
Development and Demonstration (SDD) phase of that programme, as
the only Level 1 collaborative partner.
POLICY CONTEXT
AND CAPABILITY
GAP
3. The original FCBA requirement was intended to provide
the Royal Navy with a new multi-role fighter/attack aircraft to
replace the Sea Harrier from about 2012. There has been no significant
change to the requirement, in terms of the aircraft's capabilities,
since the Staff Target was approved in 1996. The Strategic Defence
Review (SDR), however, concluded that we should plan to replace
Invincible class carriers with two new larger aircraft carriers
and establish the Joint Force 2000 (since renamed Joint Force
Harrier), comprising RN and RAF elements. Therefore, the FCBA
project assumed a common aircraft to replace both the Sea Harrier
FA2 and RAF Harrier GR7, capable of being deployed in both land
and sea based operations. FCBA was later renamed FJCA to reflect
the move away from a purely sea based capability.
4. The important features of the Key User Requirements
(KURS) are to provide a single seat supersonic aircraft, incorporating
advanced "stealth" technology, that is capable of performing
multi-role (ground attack, reconnaissance and air defence) operations
from aircraft carriers and land bases, in pursuit of independent
UK objectives or as part of coalitions with the US or other allies.
Reliance on US framework capability has been fundamental to the
success of operations in the Gulf since 1991 although, as indicated
in the New Chapter to the Strategic Defence Review, there could
still be a need for the UK to operate independently or as a lead
nation in a coalition.
5. Interoperability is a key tenet for JSF in terms of
maintaining commonality within the three variants of the aircraft
and across national fleets. In addition, there are multiple information
exchange requirements that seek to ensure interoperability within
the Network Enabled Capability of the future.
6. As development has progressed, the work to mature
the design to meet weight targets necessary to achieve desired
performance levels has proved much more demanding than expected.
Whilst the problem affects all three variants, it is the STOVL
performance projections that present the greatest concern given
the tighter margins associated with this variant. A significant
rebaselining of the SDD phase is in staffing for approval by the
US Defense Acquistion Board (due June 2004), which will allow
for additional design effort to ensure requirements are satisfied
through a range of options, including air vehicle weight reduction.
The initial assessment of the outcome of this work is not likely
to be possible before Summer 2004, when the necessary data will
start to become available to estimate overall performance with
a higher degree of confidence than is possible now. Until then,
performance against the KURs is difficult to predict, but the
re-baselining will unavoidably carry with it a significant time
and cost penalty to the JSF programme. The predicted ISD for the
US Marine Corps STOVL aircraft, for example, is expected to slip
from 2010 to 2012, whilst the overall cost of the SDD phase will
rise by some $7 billion, from $33 billion to $4l billion, although
not all of the cost increase is attributable to the additional
design effort. The consequential impact on the JCA programme is
still being assessed.
7. The current UK planning assumption is for 150 Short
Take Off and Vertical Landing (STOVL) aircraft. Final numbers
will depend on the outcome of ongoing work to confirm overall
future offensive air capability requirements.
COSTS
8. The spend on the project to 31 March 2004 is £342
million, of which some £144 million was incurred by the end
of 2001-02 on the UK's contribution to the US JSF Concept Demonstration
Phase and UK Feasibility Studies. Despite the $7 billion increase
to SDD, the UK contribution (in cash terms) to the phase remains
at $2 billion, which equates to £1.4 billion using current
mandated exchange rate assumptions. This contribution will be
paid over an 11-year period that began in October 2001.
9. The current estimated cost of the JCA Demonstration
phase including costs incurred on UK national work is £2.57
billion (50% confidence), against an approval (at 90% confidence)
of £2.2 billion.The growth of £337 million reflects
areas of cost increase offset by decreases elsewhere. The increases
include emergent aircraft system requirements, exchange rate fluctuation
and a systematic re-examination of overall risk. The intention
is further to examine cost, time and performance trade options
to bring the programme back to within approval by March 2005.
10. Overall aircraft numbers, which have yet to be determined,
will drive the cost of the programme. It is currently estimated
to be in the region of £7-10 billion.
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
11. The FJCA ISD is defined as the ability to conduct
sustained operations with 8 aircraft. As a result of a new investment
strategy to take forward Joint Force Harrier (JFH) into the era
of FJCA and Future Carriers (CVF), we plan to increase the offensive
capability of our carrier-borne aircraft by upgrading the Harrier
GR7 to GR9 standard and withdrawing the Sea Harrier FA2 from service
in the period 2004 to 2006. ISD approval for FJCA will be sought
in the Production/Support Main Gate, which is not likely to be
required before late 2006, on the basis of current US programme
timescales. The FJCA Out of Service Date is envisaged to be in
the 2040s.
ACQUISITION APPROACH
12. FJCA is in the UK Demonstration phase of the CADMID
cycle, although it predates Smart Acquisition. The JSF programme
that is providing the solution is also pre-Smart Acquisition but
accords with its principles. The joint US/UK programme office
operates as an integrated project team, including close partnering
arrangements between the programme office and the prime contractor,
and operational staffs are contributing to the development of
the requirement. The concept of "cost as an independent variable"
means that through life affordability has been taken directly
into account, along with lethality, survivability and supportability,
in the evolution of requirements and design solutions. The US
programme has also made significant "front end" investment,
for example through the Technical Maturation Program, designed
to reduce risk by proving technology before it was offered to
both companies for potential incorporation in their solutions,
and in the Concept Demonstration aircraft flown by both companies.
13. Seven other countries have now joined the JSF programme:
Italy and the Netherlands as Level 2 Participants, and Australia,
Canada, Denmark, Norway and Turkey as Level 3 Participants. Israel
and Singapore have joined as Security Co-operation Participants
(SCP) in JSF. SCP status is a separate bilateral arrangement with
the US and does not involve accession to the joint programme MOU.
14. Alternative options considered for FJCA were a "navalised"
Typhoon, the US F18E/F, the French Rafale and an updated Harrier.
JSF was the clear value for money winner, on both cost and capability
grounds.
15. JSF is an incremental acquisition programme. The
SDD phase will provide a fully developed and tested aircraft as
well as trained pilots. The Production and Support phases will
be conducted on a multilateral collaborative basis and will be
the vehicles for purchasing aircraft and support. An incremental
approval approach to the phases is envisaged to minimise the risk
inherent in concurrent development and production programmes.
Block upgrade programmes will be the means to introduce performance
updates, as required, throughout the life of the aircraft beyond
ISD. It is too early to comment on the potential UK options for
the post ISD work.
INDUSTRIAL ISSUES
16. UK participation as a full collaborative partner
in the JSF programme represents a significant opportunity for
UK industry and the UK economy. UK companies have won, on merit,
substantial high quality work valued in excess of £4.5 billion
and this is expected to continue in the future production and
support phases of potentially the largest military procurement
programme ever. BAL Systems is a main player in the Lockheed-Martin
team developing the aircraft and aircraft systems, and Roll Royce
has major roles in the STOVL propulsion system (contracted with
Pratt and Whitney) and the Fl 36 engine programme (contracted
with General Electric), which will eventually compete against
the Pratt and Witney F135 engine for aircraft fits. The requirement
for the partner nations and world wide Third Party Sales is estimated
to amount to between 3,000 and 5,000 aircraft, at a production
cost that could reach over $3008n. UK industry can be expected
to play a significant part in this work.
17. Central to the continued involvement of UK companies
in the high technology areas of the JSF programme is Information
and Technology release. Whilst a number of difficult issues remain
to be resolved, the UK has achieved considerable success in obtaining
release of sensitive data at both a Government to Government and
Government to Industry level. The release of information to meet
the requirements of our involvement during the SDD phase is almost
complete.
18. The requirement to provide the UK with the ability
to operate and support the aircraft on a sovereign basis was set
out in the UK Exchange of Letters (EOL) between the US and UK
Defence Secretaries in January 2001. The UK intends during the
next two years to refine further the detailed data release requirements
and will work closely with our US colleagues in both Government
and Industry to establish a jointly agreed sustainable plan. There
are a number of issues to be considered in the context of a best
value solution for the UK, including the establishment of an in-country
assembly facility.
IN -SERVICE
SUPPORT
19. Support arrangements are currently being examined,
including the desirable extent of collaborative support and the
role of industry in direct support. Detailed plans for the transition
from the current Harrier fleet to FJCA will be formulated nearer
the time.
NEXT STEPS
20. The intention is for the UK to play a full part with
the US over the next few months to determine the efficacy of the
SOD re-baselining efforts. Once the necessary initial data is
available in the Summer, an assessment will be made of the ability
of the STOVL variant to meet UK KURs, together with impacts, if
any, on the design of the CVF.
21. Despite these problems, other areas of development
are proceeding satisfactorily. For example, the first mechanical
component for the SDD phase aircraft was produced in November
2003, and the F135 engine that will be fitted to the first production
batches of the aircraft has passed its Critical Design Review
ahead of schedule and testing is well advanced. The propulsion
system for the STOVL variant, comprising the Fl 35 engine and
the lift fan and roll ducts, is scheduled to commence testing
in April 2004, some six weeks ahead of schedule.
13. FUTURE STRATEGIC TANKER AIRCRAFT
PROJECT SUMMARY
1. The Future Strategic Tanker Aircraft (FSTA) is planned
to replace the Air Refuelling (AR) and elements of the Air Transport
(AT) capability currently provided by the RAPs fleet of VC1O and
TnStar aircraft. The Ministry of Defence is considering whether
the capability could be provided through a service contract, under
the Private Finance Initiative (PFI). Under such an arrangement,
a contractor would own and maintain the aircraft and provide training
services, infrastructure and some personnel, whilst the RAF would
be responsible for all military operations. The contractor would
be able to earn commercial revenue, using spare aircraft not required
by the RAF in peacetime, to offset the cost of the service.
2. On 26 January 2004, the Secretary of State for Defence
announced that a bid from AirTanker Ltd, a consortium comprising
EADS, Rolls Royce, Cobham and Thales, had been judged to offer
the best prospective PFI solution. AirTanker Ltd proposed a service
solution utilising Airbus A330 aircraft. Negotiations are currently
being taken forward with AirTanker Ltd.
POLICY CONTEXT
AND CAPABILITY
REQUIREMENT
3. The Strategic Defence Review highlighted that "the
ability to rapidly deploy, sustain and recover our forces is of
critical importance if we are to be able to respond quickly to
future crises". This indicates the continuing need for an
AR capability, to provide force multiplication and operational
range enhancement for front-line aircraft across a range of defence
roles and military tasks. The importance of AR has been demonstrated
on operations over many years, and remains a central element of
defence capability in this era of expeditionary warfare. Its importance
has been reaffirmed in the Strategic Defence Review New Chapter
and in last year's Defence White Paper.
4. The RAF's fleet of 19 VC10 and nine TriStar aircraft
provide current AR/AT capability. All of the VC10s and six of
the TriStars are configured for AR and of these 11 VC1O0 and six
TriStars are also capable of carrying passengers and freight.
Three TriStars are configured for the passenger carrying role.
The VC10s first entered service in the 1960s while the TriStars
first entered RAF service in the early 1980s. The VC10 was retired
from commercial airline service in the early 1980s and the type
is now unique to the RAF. Therefore, our current AR aircraft,
particularly the VC10s, are old and in need of replacement. FSTA
aims to provide the RAF with a modern and effective replacement
AR capability, commencing from around the end of the decade.
COSTS
5. The FSTA programme is currently in an assessment phase
designed to confirm whether a PFI solution can provide the required
capability at best value for money. At 31 March 2004, the cost
of the assessment phase is estimated to be £24 million, at
50% confidence. This compares to a cost of £13 million approved
at Initial Gate. The variation results from the Department's need
for additional external legal and financial advice, following
an extension to the Assessment Phase (£21 million), coupled
with an agreement, in Oct 2002, to fund some of industry's assessment
phase risk reduction work (£10 million). The estimated whole
life cost of the PFI programme is shown in the table below:
£m (outturn prices)
| Lowest | Most Likely
| Maximum |
Current forecast cost of PFI programme
| 11,300 | 12,300 | 13,100
|
Forecast cost of PFI programme at Initial Gate
| | 12,400 | 13,900
|
| |
| |
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
6. On current plans, it is anticipated that a PFI service
would commence around the end of the decade. However, FSTA project
timescales are dependent upon the outcome of ongoing discussions
with AirTanker Ltd. AirTanker Ltd has been judged to offer the
best prospective value for money PFI solution to the FSTA requirement,
but a number of complex issues remain to be resolved before the
Department can be confident that a PFI solution could provide
a value for money and affordable solution. Consequently, the Department
has decided not to make a final decision about whether to proceed
with PFI until further contract negotiations with AirTanker Ltd
have been completed.
7. A PFI contract of around 27-years duration is anticipated.
This would break down, broadly, into a four-year establishment
phase, a three-year transition phase and 20-years of full service
capability. The In-Service Date would fall between commencement
of the PFI service (known as the Introduction to Service Date)
and the date on which full service capability is achieved (the
Full Service Date). The expected date for achievement of ISD is
also subject to ongoing discussions with AirTanker Ltd.
8. ***.
ACQUISITION APPROACH
9. FSTA was nominated as a potential PFI programme in
1997, when it was judged that the project, scoped as a service,
could offer better value for money than conventional asset-based
procurement. A key tenet of the PFI acquisition strategy is the
potential to transfer the through life risk of ownership of the
aircraft assets to the private sector. Considerable innovation
could also result from the PFI approach. This includes the opportunity
for the contractor to earn commercial revenue through third party
use of the aircraft assets. Furthermore, a mix of Regular RAF
and civilian contractor personnel, some of whom will have a Sponsored
Reservist obligation, will be employed in delivery of the service.
INDUSTRIAL ISSUES
10. Industrial issues were not a factor in the selection
of AirTanker Ltd. Both PFI bids offered potential benefits for
UK industry. A PFI contract could be expected to create or sustain
several thousand jobs in the UK, over the lifetime of the service.
The UK decision to take forward single bidder negotiations with
AirTanker Ltd represents an opportunity for Airbus to gain a foothold
in the global air refuelling market, which is currently dominated
by Boeing.
IN -SERVICE
SUPPORT
11. In service support of the aircraft and associated
infrastructure is planned to be an integral part of the PFI contract,
although the support arrangements are being mapped against the
Support Solutions Envelope model developed by the Defence Logistics
Organisation. In order to safeguard our ability to deploy the
operational capability effectively, Regular RAF maintenance personnel
will be employed in support of the aircraft. They will work alongside
civilian contractor personnel, some of whom will have a Sponsored
Reservist obligation.
NEXT STEPS
12. Negotiations aimed at agreeing a PFI contract that
is acceptable to all parties are underway. Successful completion
of these discussions represents the next key milestone for the
project. The Department plans formally to review progress in the
Summer of 2004.
14. FUTURE RAPID EFFECT SYSTEM (FRES)
PROJECT SUMMARY
1. The Future Rapid Effect System, FRES, will be the
central pillar of a capable, coherent and highly deployable medium
Land Force, networked to harness joint effects, and with broad
utility across the spectrum of operations. It is envisaged that
FRES will significantly enhance the speed at which Land Forces
can operate and the effect they can bring to bear through improvements
in mobility, lethality and a reduced logistics footprint. It is
anticipated that the capability will be provided by a family of
medium-weight armoured vehicles that will replace the GVR(T) series,
Saxon, elements of the existing FV430 series.
2. The FRES Initial Gate investment decision was approved
in April 2004. Achieving Initial Gate took longer than expected,
but it was important to get our strategy right in order to lay
solid foundations for success. We therefore spent time considering
how best to balance a number of issues such as a challenging and
complex requirement, technological risk and the need for an early
deployment of the capability.
POLICY CONTEXT
AND CAPABILITY
REQUIREMENT
3. In setting out the need for the UK to be able rapidly
to project military power world-wide, the Strategic Defence Review
(SDR) made specific reference to FRES. The New Chapter further
explained the strategic context for the requirement, stating that
as part of our move towards more rapidly deployable forces we
are pursuing the concept of a Future Rapid Effect System, a family
of air-transportable medium-weight armoured vehicles.
4. Ongoing Future Army Structures work envisages restructuring
the Army into the "Balanced Force" with heavy, medium
and light brigades. The Future Land Operational Concept provides
the conceptual basis for the development of the Balanced Force,
capable of operations across the full spectrum of conflict but
with a significantly improved rapid intervention capability.
5. FRES will provide a capability to deploy an effective,
combined arms land based force between the two existing extremes
of heavy armour (slow to arrive and with a large footprint) and
light forces (quick strategic deployment but limited endurance
and reach). It must be able to be deployed quickly with minimal
logistical support in agile combined-arms force packages to engage
in missions across the spectrum of conflict from war-fighting
to peacekeeping and be able to achieve knowledge superiority and
contribute to Network Enabled Capability through its own and linked
assets.
6. FRES will be the first Land combat vehicle system
fully able to exploit the capabilities of Command and Battlespace
Management (CBM). The plan is to network FRES so that it can greatly
enhance joint force situational awareness, sensor-shooter links,
flexible reorganising, agility and effects-based planning. This
will result in improved control, targeting precision and time
sensitivity, rapidity of effect and force protection.
7. The FRES capability will embrace a number of roles,
including Protected Mobility, Reconnaissance and Communications.
The size of the force will be determined during the Assessment
Phase, informed by any trade-off decisions that are made.
8. The four requirement drivers for FRES are: the need
for an armoured rapid effect land capability; wide operational
utility; maximum interoperability with other parts of deployed
forces, other components and allies; and the need to address the
obsolescence of existing fleets. The priority for the FRES programme
is to deliver the central pillar of a credible and balanced land
medium rapid effect capability, thereby helping to fill the significant
capability gap between the current heavy and light forces.
9. FRES will be required to integrate fully with a wide
range of battlefield assets to enable the delivery of joint effects.
It will also be expected to support joint operations with NATO
allies. Achievement of interoperability requirements is a factor
to be addressed during the Assessment Phase.
10. Co-operation during the Assessment Phase is likely
to focus on harmonising requirements for interoperability in support
of coalition operations and mitigating common areas of technology
risk. However, opportunities for collaborating on sub-systems
and sharing information on technologies and requirements will
be explored during the Assessment Phase, and the scope for future
collaboration assessed prior to the Main Gate investment decision.
COSTS
11. The full Programme cost has yet to be established,
but the provision could be in the region of £6 billion. Whole
life costs are expected to be in the region of £50 billion.
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
12. FRES has just achieved Initial Gate, and ISD will
not be formally endorsed until Main Gate. One of the aims of the
Assessment Phase work will be to identify and reduce risk in the
programme to enable us to define an appropriate ISD in both capability
and programme terms for endorsement at Main Gate. The planning
assumption is to introduce the early variants of FRES around the
end of the decade, with a phased approach to achieving full operational
capability.
13. FRES is expected to be in service for some 30 years.
The ability of potential solutions to accommodate incremental
enhancements to upgrade the capability by exploiting new technologies
in response to changing threats will be a key consideration for
the Assessment Phase.
ACQUISITION APPROACH
14. The acquisition strategy for the Assessment Phase
was determined against the key principles of harnessing the broadest
range of industrial capability, creativity and innovation, and
keeping open the widest possible options for all future phases
in order to best meet our requirements. The endorsed approach
is to engage a Systems House (SH), through a short competition,
to lead the initial Assessment Phase. The SH is required to be
independent of product or manufacturing capability and will be
selected for programme management, risk management, systems engineering
and supply chain management capabilities. It will therefore be
in a strong position to leverage the widest possible industrial
involvement whilst leaving the options open for future acquisition
phases. As well as the capabilities noted above, the SH will bring
an objective view of the ideas and technologies which may be applicable
to FRES, and a detailed understanding of the risks inherent in
complex "systems of systems" integration.
15. Our intention is to take an incremental approach
to capability acquisition for the FRES programme; this will, in
particular, apply to the insertion of technologies as they mature.
FRES is not intended to be a high technology risk programme, but
there is a need to mitigate the risks of certain technologies
in order to determine if they are suitable for FRES. Much of this
risk reduction work will be carried out during the Assessment
Phase.
16. The planned Integrated Technology Acquisition Programme
(ITAP) approach links technology to capability in order to enable
the pull-through of mature technologies at the optimum time without
delaying the implementation of FRES. A series of Technology Demonstrator
Programmes (TDPs) will be undertaken during the Assessment Phase
as a means of assessing and, where necessary, accelerating, the
maturity of technologies and enablers. Technologies will only
be considered for inclusion in FRES if they are at an appropriate
level of maturity at pre-designated key decision points.
17. It is too early in the project to determine the strategy
for future phases, however a range of alternative options will
be explored during the initial Assessment Phase in order to arrive
at the optimum strategy for later phases.
18. The project is looking to exploit Smart Acquisition
initiatives and to identify and pursue additional opportunities
to introduce new or revised practices to deliver the FRES capability.
The size and impact of the project offer the potential to improve
existing processes and procedures, and implement innovative ideas.
INDUSTRIAL ISSUES
19. Industrial issues related to FRES are being assessed
in line with the Defence Industrial Policy, and in association
with Other Government Departments, in order to determine how these
issues may influence the project. The detailed development of
acquisition options will be made against the background of wider
industrial factors. One of the considerations will be the potential
role for the UK Armoured Fighting Vehicle industry.
20. The FRES programme is at an early stage, therefore
it is difficult to assess future export opportunities. However,
we would expect it to attract interest from potential export customers,
based on both the export success of some of the vehicles it is
planned to replace and the interest expressed by other nations
in a medium force capability.
IN -SERVICE
SUPPORT
21. A key requirement of FRES is the need to sustain
operations of extended duration and operate over long lines of
communication with limited transport assets. This will necessitate
high levels of operational availability, and significantly reduced
logistic demands. It will need to be frugal in its consumption
of fuels, oils, road gear (tracks or wheels) and technical spares
in comparison with the current in-service equipment. It must be
reliable and easy to maintain and service. The anticipated improvements
in efficiency will contribute to speed of deployment and reduce
the logistic footprint.
22. Development of the support strategy for the system
will be an important element of the work to be conducted during
the Assessment Phase.
NEXT STEPS
23. It is imperative now to proceed with the planned
Assessment Phase activities, and to regain the momentum on this
important programme. The broad aims of the Assessment Phase are:
to further define the FRES capability required within the developing
medium force and network enabled operational concepts and thus
develop a series of affordable options for meeting the FRES requirement;
to develop optimum procurement and support strategies for future
phases in order to present a robust case at Main Gate; and to
manage technology and supplier risk to acceptable levels.
15. FUTURE CARRIERS (CVF)
PROJECT SUMMARY
1. Under the CVF project, we will procure two large aircraft
carriers to replace the three Invincible-class carriers from around
2012. These carriers will operate the Short Take Off and Vertical
Landing (STOVL) variant of the Joint Strike Fighter (which has
been selected to fill the role of Joint Combat Aircraft), the
Maritime Airborne Surveillance and Control (MASC) capability and
other aircraft in a variety of roles.
2. CVF received Initial Gate approval in December 1998
and in November 1999, competitive contracts for the Assessment
Phase were awarded to BAE SYSTEMS and Thales UK. Following the
January 2003 announcement of an alliance approach involving BAE
SYSTEMS, Thales UK and the MOD as the best method for delivering
CVF, Stage 3 of the Assessment Phase formally started on 5 September
2003 and ran until 31 March 2004. Work is continuing to develop
the carrier design to a high degree of maturity and the MOD is
discussing the alliancing strategy for the Demonstration and Manufacture
(D&M) Phases with the two companies. The programme remains
on target to meet the ISDs of 2012 and 2015.
POLICY CONTEXT
AND CAPABILITY
REQUIREMENT
3. The requirement for the Future Aircraft Carrier (CVF)
was endorsed in the Strategic Defence Review (SDR) which identified
a continuing need for rapidly deployable forces with the reach
and self-sufficiency to act independently of host-nation support.
The SDR concluded that the ability to deploy offensive air power
will be central to future force projection operations, and aircraft
carriers can provide valuable flexibility in a range of operational
circumstances. The SDR conclusions were endorsed by the New Chapter
work of 2002 and the Defence White Paper in December 2003.
4. It was therefore decided to replace the three INVINCIBLE-class
carriers with a new class of two larger and more capable carriers
known as CVF. These shipswhich will be called "Queen
Elizabeth and Prince of Wales"will have the objective
of supporting an increased emphasis on offensive air operations
and force projection as a central component of joint maritime
operations.
5. The design parameters for the ships continue to evolve
to meet our capability requirement; as a routine part of the Assessment
Phase, cost capability trade-off work has been carried out to
ensure that the programme provides the best value for money capability
that is consistent with the needs of defence policy and is affordable
within the overall defence budget. We anticipate being in a position
to refine our assumptions towards the end of the year and in the
meantime, our primary focus remains on delivering the capability
that offers the best value for money solution.
COSTS
6. Costs incurred to the end of 31 March 2004 (including
pre-feasibility studies) total around £153 million. This
represents an increase of £35 million over the approved Initial
Gate costs of £118 million as a result of the revised procurement
strategy and renegotiations to the Stage 3 contracts that were
placed with the two companies in September 2003. The costs remain
within the boundary set for the project.
7. Estimates for the Demonstration and Manufacture (D&M)
are being prepared on a progressive basis throughout the Assessment
Phase. The current estimate of most likely (50%) cost for the
carriers is around £3 billion (including combat system but
excluding the aircraft). Cost of Capital charges add a further
£450 million to the estimate. Total acquisition costs are
being refined during the remainder of the Assessment Phase to
take into account maturing design and price information from BAE
SYSTEMS and Thales UK.
IN -SERVICE
DATE (ISD) AND
SERVICE LIFE
8. ISD will be declared when the military capability
provided by CVF is assessed as available for operational use.
The first CVF is scheduled to enter operational service in 2012
and the second in 2015. Current work in the CVF Assessment Phase
suggests that it is possible to meet these dates, although work
is continuing to identify the optimum design and build strategy.
Each CVF is planned to have an in-service life of 30 years with
a stretch target of up to 50 years.
ACQUISITION APPROACH
9. The CVF Assessment Phase began in November 1999 with
the award of competitive contracts to BAE SYSTEMS and Thales UK
and has been split into a number of phases. Stage 1 involved the
examination of several carrier designs and an assessment of the
costs of extending the lives of the three existing carriers by
10 years to provide a baseline against which the cost effectiveness
of all the options could be evaluated. During Stage 2, BAE SYSTEMS
and Thales UK concentrated on refining their designs and taking
key trade-off decisions. From September 2002, work concentrated
on building the carriers to an innovative, adaptable design which
will enable them to operate the STOVL variant of the JSF aircraft;
and with modifications, a further generation of conventionally
launched aircraft. This represents a sensible way to secure the
best return from our investment in the carriers and good long
term value for money.
10. An innovative Continuous Assessment process was used
throughout Stage 2 to evaluate the contractors' performance. This
concluded that an alliance approach involving BAE SYSTEMS, Thales
UK and the MOD represented the best approach to delivering CVF
within the time and cost parameters. The alliance procurement
strategy was announced in January 2003. The alliance is envisaged
as a co-operative relationship between the customer (the MOD)
and the key contractors which will enable us to make the most
of the resources and strengths of all the alliance members with
the shared objective of improving on agreed performance targets.
11. A third Stage of the Assessment Phase was taken forward
on the basis of an evolving alliance approach and formally started
on 5 September 2003. The maturity of the design was increased
and discussions continued to be held with the companies on the
alliancing strategy to take the programme through the D&M
Phases. Design maturity has already reached a comparatively higher
level for CVF than for other legacy maritime projects. We believe
that the alliance approach remains the best method for delivering
the programme to time and cost. Stage 3 completed on 31 March
2004. Advice has been submitted to Ministers on the way forward
for the programme, and an announcement is expected shortly.
12. Opportunities for international co-operation are
being reviewed during Assessment, especially for equipment systems
and subsystems. Although whole ship collaboration is unlikely
to be a viable option, opportunities to share best practice in
assembly integration and outfitting will be explored. In particular,
discussions are continuing with the French and US to explore areas
for possible co-operation in common areas of aircraft carrier
technology at a system or sub-system level. There is agreement
between the UK and France, at Ministerial level, that industry
to industry co-operation represents the best way forward for any
UK/France co-operation on aircraft carrier issues.
13. The CVF programme is adopting and further developing
a range of Smart Acquisition techniques and has embedded a number
of Smart Acquisition processes into its activities with the Aircraft
Carrier Team (formed by BAE SYSTEMS and Thales UK). A greater
emphasis is being placed on identifying, evaluating and implementing
effective trade-offs between system performance, whole-life costs
and time. Incremental acquisition is being adopted in areas such
as mission systems, which will allow for the incorporation of
up-to-date technologies to avoid obsolescence. SMART project management
processes are being used to achieve early risk reduction, such
as the use of Technology Readiness Levels (TRL) to ensure that
any technologies that need developing have reached a sufficient
TRL at appropriate points within the acquisition cycle. We are
also developing a mature risk assessment process based around
a joint risk register, linked with Earned Value Management (EVM),
which enables the project team to track and manage key risks and
ensure that, if required, appropriate mitigation strategies are
being implemented.
INDUSTRIAL ISSUES
14. In accordance with current government policy for
the construction of Royal Navy warships, the CVF will be assembled
in UK shipyards. Industrial factors were taken into account in
the decision to adopt the alliance approach for CVF; in January
2003, we identified that, subject to value for money considerations,
the best way forward was for CVF to be potentially built by a
combination of four UK shipyards (BAE SYSTEMS Naval Ships at Govan,
Vosper Thornycroft at Portsmouth, Swan Hunter on Tyneside and
Babcock BES at Rosyth) although the involvement of other UK yards
has not been ruled out. This approach was underpinned by a detailed
analysis of facilities, capabilities and likely capacity across
the UK shipbuilding industrial base. Final decisions will be made
based on achieving value for money while taking due account of
the capability, capacity and resources of UK industry to meet
the full range of planned naval programmes. Discussions are continuing
with the yards on the precise arrangements and work allocation
on this basis. The predicted overall loading in the yards during
the CVF construction timef name is also being examined. It is
estimated that CVF will sustain or create some 10,000 jobs across
the UK during the course of its design and manufacture.
15. It is unlikely that this project will lead directly
to whole-ship sales, although the commercial marketing of CVF
design skills and production technology could benefit UK industry.
Much of the ship's equipment could have export potential. Industrial
Participation proposals will be invited, as appropriate, for offshore
content of the proposed solution.
IN -SERVICE
SUPPORT
16. Contractor Logistic Support (CLS) will be considered
for some or all of the maintenance and logistics and OLS options
for up to 30 years are being examined during Assessment. One option
to be considered is the adoption of best practice in supply chain
techniques, to minimise MOD ownership of spares, by contracting
for agreed spares availability from industry. We are also developing
options to let a contract for an Initial Support Period up to
and including the dry docking of the first vessel.
17. The upkeep cycle of the CVF will reflect both the
vessels' modern design and developments in upkeep practice such
as "reliability centred maintenance" rather than lengthy
and expensive refits. This will enable availability requirements
to be met by only two carriers.
NEXT STEPS
18. Stage 3 completed on 31 March 2004. Advice is currently
with Ministers on the way forward for the programme, and an announcement
is expected shortly. In the meantime, work on the project continues
and negotiations are on-going between the MOD and the companies
over the alliance strategy for the Demonstration and Manufacture
phases. The target ISDs for the carriers remain unchanged at 2012
and 2015.
April 2004
4
There is currently approval for the first six ships, LAP and associated
missiles. Approval for further ships will be sought at the appropriate
time, but probably by 2006. Back
5
The approval figure differs from figures reported in previous
years' memoranda which included pre-Main Gate costs associated
mainly with the Horizon Programme. The figures now quoted are
consistent with those reported in the Major Projects Report. Back
6
BAE Systems, Devonport Management Ltd, Babcock Naval Services
and Rolls Royce Naval Marine. Back
7
Type Acceptance is the process to confirm that a defined standard
of aircraft has been properly documented, that the minimum acceptable
performance standard has been demonstrated and that industry has
provided the required safety evidence. Back
|