The world of defence procurement programs is complex. It has its own unique jargon that is all but impenetrable to the general public. A quick course in code breaking is almost mandatory to even understand Department of Defence media releases.
So its perhaps understandable, if very disappointing, that so many of the national and local media made such a botch of reporting recent announcements about vehicle acquisitions under the Australian Defence Force’s LAND 121 vehicle replacement programs.
Phase 4 of this program is a potentially $1.5 billion project to acquire up to 1,300 protected and unprotected light vehicles, many of which will replace the ADF’s existing Land Rover fleet.
Thales Australia’s Hawkei has been selected as the preferred vehicle to proceed to the next stage of development and testing. This represents a major hurdle in the complex acquisition process as it essentially means that Hawkei’s competitors have been all but eliminated from consideration. Thales can now expect a significant order for the vehicle providing it passes a second stage of exhaustive testing and assessment over the next two to three years and meets the value for money conditions of the LAND 121 Phase 4 process.
As part of the first stage, the Government also invested in the development of alternative vehicles under the United States’ Joint Light Tactical Vehicle program. However this program is now several years behind schedule and stands a strong chance of being cancelled completely as part of planned cutbacks in US Government defence spending. This in itself is a good reason for the Australian Government to pursue a locally manufactured option.
The Phase 4 acquisition process, while complex and time consuming, is designed to ensure that Australian servicemen and women get the best available equipment for their needs and Australian taxpayers receive value for the significant amount of public money involved in such a purchase. This is the same process that was followed by the Howard Government in 1997 when the original Bushmaster Protected Military Vehicle received approval to proceed to the next stage of the testing, evaluation and contract negotiation.
No government in the world would commit in excess of a billion dollars for a purchase based on the evaluation of a single prototype or the exhortations of a regional trade union organiser and a few geniuses from the shop floor at Thales Bendigo who think they know it all. Thales will now be allocated substantial funding by the Australian Government to build and test further prototypes. This approach ensures both Thales and the Government share the risks associated with the development of a suitable production-ready vehicle.
By selecting the Hawkei as its preferred vehicle for the second stage, the Government is indicating it is confident it will meet all future testing requirements. Providing it does so, final contracts for the supply of a production version will be signed with Thales in due course.
There is an attractive (for Government) and viable alternative to this established and lengthy process and that is to pursue what is referred to as an ‘off the shelf’ option. This simply means the defence department study a catalogue of established and proven designs for the vehicles or equipment it needs, selects two or three options for appraisal and evaluation, chooses the equipment or vehicle that best suits its needs and places an order accordingly. Problem solved within a few months.
This negates having to undertake the time consuming and complex assessment tasks associated with a ground up locally designed and built option. However, ‘off the shelf’ options almost certainly results in acquiring the vehicles or equipment from overseas established manufacturers.
The selection of a locally-built vehicle potentially benefits Australian manufacturing, creating jobs and stimulating economic activity not just at Thales but also at the many small to medium enterprises that supply components. It also means that Australia will retain strategically important defence manufacturing skills and capabilities and not be solely reliant on overseas suppliers which, as we have seen with the US JLTV program, can be risky and unreliable.
As part of his recent statement, The Minister for Defence also announced that Thales Australia had been unsuccessful with its bid to supply a number of light-to-medium armoured utility vehicles under Phase 3 of the LAND 121 program.
The local and national media reporting of this announcement was, frankly, appalling.
Apparently taking their lead from a speculative story in the Melbourne Age Newspaper on Monday 12 December – written before the Minister had made his announcement – at least two local media outlets incorrectly reported that Thales had lost a $1.9 billion contract for the supply of 2,700 vehicles. This prompted the usual uninformed comment from regular knockers of our local manufacturing industry, including state and federal Coalition politicians.
The reporting was just plain wrong.
Thales’ only interest in Phase 3 was in a small section of the overall $1.9 billion program by supplying a number of the light-to-medium fully armoured trucks for which it was bidding a Bushmaster utility. This is a flat-top tray prototype based on the highly successful Bushmaster Protected Mobility Vehicle, and which easily met the required specifications. The program called for a range of vehicles, both armoured and non armoured.
No Australian-based manufacturer, including Thales Australia, produces any of the other vehicles required under LAND 121 Phase 3 and they therefore have to be sourced from overseas manufacturers. There is no local alternative and Thales Australia did not “lose” a $1.9 billion contract for 2,700 vehicles.
It is, of course, disappointing that Thales was unsuccessful in its bid to supply even a small number of Bushmaster utes because this would have gone a long way to bridging the time gap between the end of current Bushmaster Protected Military Vehicle production and the start of full production of the Hawkei in Bendigo.
However, there is no doubt the Australian Army would love thousands of extra Bushmaster PMV’s and an additional order for these proven vehicles would be the quickest and most effective way of bridging the production gap at Thales Bendigo.
As the Minister for Defence recently announced, the Government has agreed to further explore the option of topping up the fleet of Thales Bushmaster PMV’s and a decision will be finalised in the near future.
Steve Gibbons MP
Federal Member for Bendigo
27 December 2011