Page 36 - Australian Defence Magazine Oct 2018
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“The contract is a long-term document intended to drive efficiency, but also to add some certainty for industry.”
While most of the LHD sustainment work is performed at Fleet Base East, there is some work performed around Australia from time to time as the ships are deployed away from Sydney. Both the current contract and the future document take this into ac- count. BAE Systems were the acquisition agency for the two ships under JP2048 Phase 4 and the initial sustainment con- tract is due to expire in 2019.
“The current model was only ever intended to be a transitionary support arrangement and therefore it doesn’t include all of those things you would require for a long-term, enduring asset stewardship-type contract,” explained LHD System Program Office (LHD SPO) Director, Captain Brad Smith to ADM. “Ele- ments such as asset management, continuous improvement, routine engineering tasks and long-term performance measures are not built into the original contract, because that was a transitionary contract out of the acqui- sition phase when the ships entered service.”
ment. CAPT Smith says deep engagement between industry and Defence will enable greater knowledge transfer to Defence, sup- porting the Smart Buyer outcomes of CASG.
Ultimately, he says the future model is seeking to reduce costs over the life of the assets, deliver against performance targets and provide an agile support system that is able to rapidly adapt and adjust to a dynam- ic maritime support environment.
One of the overarching principles of this new arrangement will be to let industry take the lead in sustainment of Na-
vy’s surface combatant fleet. “The model was developed through the Smart Buyer process which the Common- wealth began in 2017 and is the result of workshop activi- ties between different stake- holders to determine what the best model would be for the LHD assets moving forward,”
CAPT Smith said.
Working through the Smart Buyer
process, the team identified a number of high-level supplier engagement model re- quirements which has formed the basis of the future contract. Included in these were that the model was sufficiently resilient to provide ongoing and efficient sustainment over the life of type of the LHDs and that it aligned with the directions of major reform programs within Defence such as the First Principles Review.
“We also needed to deliver the outcomes of the existing Materiel Sustainment Agree- ments (MSAs), we needed to provide a structure that provides accountability and fosters a collaborative environment, to maximise efficient and effective sustain- ment and that the transition to the future model needs to occur with minimal risk to the availability, cost and performance of the assets,” CAPT Smith explained to ADM.
Given that the key performance indica- tor for the Navy is how many days a plat- form is available for sea over a given period, one measurement of the success of the new
During Exercise Sea Explorer 18 an LHD landing craft from HMAS Canberra returns to the well deck on completion
of training activities.
model will be assurance from the LHD SPO that the Fleet Commander’s required Material Ready Days (MRDs) can be met.
“There are a number of metrics that will be defined and industry is participating in this process. It will be a performance-based contract with its own measures of success, in terms of key performance indicators,” CDRE Elliott added. “Ultimately what we’re looking for is a long-term partner that’s vested in the asset, with a platform steward outcome focus. And of course we’re looking for a reduced total cost of owner- ship over the life of the platform.”
Request For Tender
The timeline for the introduction of the new sustainment contract is quite tight, with the transition period scheduled to be- gin early next year, however the team has been engaging with industry for some time, including an invitation to register inter- est (ITR), which was followed by an eight- week period of consultation to determine best practices within industry, and this has subsequently been used to inform the RFT.
The RFT itself was released to industry on August 2 and the successful bidder will be announced during the fourth quarter of this year.
“It is a tailored RFT phase, to make sure that it produces the best outcome for us and is the best use of both Commonwealth and industry resources to produce that outcome. It is written acknowledging that many of the traditional RFT artefacts need to be de- livered collaboratively,” CDRE Elliott said. “Thus the volume of plans mandated in tra- ditional RFTs has been removed and we’ve done some things in there in terms of trying to reduce the cost of going to tender.”
The contract has been written as a long- term document which is intended to drive efficiency, but also to add some certainty for industry. The initial contract will be for five years but, as noted earlier, there are two extension options – each of five years – which can be awarded subject to satisfac- tory performance.
At the present time, LCC sustainment is performed in the Sydney region via a sepa- rate maintenance support contract between the Commonwealth and UGL.
“We’re transitioning that into the future LHD contract, which brings they two capa- bilities together,” CAPT Smith said. “The desired outcome for us is to bring capabil- ity together where it best suits and reduce overheads.”
Future model
With the current contract set to expire in 2019, Defence is undertaking an open- market contracting activity for future LHD sustainment. The desired outcome is to maximise the knowledge and expertise in industry, enabling Commonwealth resourc- es to be focussed where they are most needed and creating clearer lines of accountability and responsibility between the participants.
By providing long-term certainty in the contract term, the idea is that industry will be better placed to invest in staff, infrastructure and specialist skills to support the National Maritime Enterprise objectives of Govern-
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