Page 36 - Australian Defence Magazine April-May 2021

36 SEA POWER HUNTER CLASS
APRIL-MAY 2021 | WWW.AUSTRALIANDEFENCE.COM.AU
capability through technology and knowledge transfer into Australia. This builds on Ultra’s Integrated Sonar System onboard the Hobart Class DDGs to further expand our Australian capability and supplier base, as well as through close collaboration with BAE Systems Maritime Australia, Saab Australia and OEM partners on the program.”
Central to an integrated capability is the relationship be- tween the ship’s sensors and Saab’s Australia Interface to en- sure that all data can potentially be exploited in a genuinely integrated and coordinated manner. Onboard the Hobart Class DDG Ultra delivers an Integrated Sonar System across multiple hull mounted and towed sonars as well as bring- ing its market leading position in airborne ASW through the supply of the majority of the world’s sonobuoy capability. Saab’s Australian Interface will be installed on board DDGs during Sea 4000 Phase 6 upgrade, and provides further op- portunity for commonality across the future fleet.
AIC CONCERNS
Despite the public statements from BAE Systems Mari- time Australia, the Commonwealth via the Department of Defence and Government, the engagement of small to me- dium Australian businesses has not been as rosy as some would hope.
the hand that feeds you.
The most damning quote came from a successful SME who has been involved in Aus- tralian shipbuilding and sus- tainment for almost 40 years – “If I wasn’t on the UK refer- ence ship as an SME, I would be nervous about BAE Systems Maritime Australia back track- ing on AIC like Naval Group
has on the Attack class.” According to a range of SMEs that ADM has spoken to, they are worried that BAE is proposing to CASG to pay BAE to set up their UK program Type 26 suppliers in Aus- tralia and then award them the first batch. This equates to
CASG effectively paying BAE Systems via:
■ Paying their incumbent T26 suppliers to set up facilities
in Australia (that often duplicate an existing Australian
capability);
■ Award the T26 incumbent the batch 1 (and possibly
batches 2 and 3) contracts without competition.
Can you imagine the government response to an Austra- lian SME that mandated that they were paid by government to set up a facility and then be awarded three ship sets of work without competition? And yet this is what the Hunter program is executing for the T26 supply chain in Australia, according to SMEs. This claim is refuted by BAE Systems Maritime Australia as ‘all our procurements are competi-
tively sought’ and all OEMs involved in the program are expected to have their own AIC plans in place.
Many SMEs are confused at the number of UK compa- nies being used on the first batch (a third of the overall Hunter program) for commercial equipment that is read- ily available in Australia. On background, OEMs are being asked to quote on 29 ships sets for benchmark cost purpos- es, frustrating many in the SME community. For Hunter, BAE Systems will only procure three shipsets of equipment for Batch 1, with Batch 2 and Batch 3 to be contracted sep- arately with AIC to increase over time, according to BAE Systems Maritime Australia.
The program had the chance to become a Joint Strike Fight- er type program in terms of international sharing of work pack- ages based on value for money. But the lack of US involvement, by far the biggest customer of frigates, is a defining factor ADM understands. The US have instead gone for an Americanised FREMM under their FFGX program, which is working at roughly $1 billion per hull vs the Australian program’s $5 bil- lion per hull. Even accounting for economies of scale, this is a significant price differential that is difficult to explain.
As previously mentioned, the weight considerations in the Type 26 UK program are also an issue, with the UK program having well documented issues in the wake of Brexit and COVID-19. It would be hard for BAE Systems UK to prioritise the Australian program when their own home market program is facing major challenges.
Lockhart confirmed that many of the main systems were never going to be designed or made in Australia and this has been the situation from the outset, much like the criti- cal systems on the Attack class program.
“The prime mover equipment, the category A and B that we refer to, were always the things that Australia does not manufacture domestically,” Lockhart said to ADM. “We don’t make gas turbines, we don’t make gearboxes, we don’t make shafts in country, so it was always a collaborative ef- fort through GCS and through GCS we bought 11 gear- boxes that will satisfy the initial batch for Australia, UK batch two and batch one for Canada.
“We continue to work as a global combat ship supply chain initiative for those prime moving equipment. The intention and what we’re doing with the Commonwealth is looking at the opportunities for moving some of that manufacturing ca- pability onshore and gas coupling is a great example of that. The gas coupling produced by Rolls Royce; they have produc- tion facilities in the UK but they also have them in Canada. They don’t have them here but do we choose the UK or do we choose Canada to buy the gas couplings? What we’re doing with Rolls Royce is pulling together a very robust AIC plan that says for the enclosure, the box, the gas coupling, ‘How do we do that, how do we deliver that for Australia?’
“We’re working with Rolls Royce and the likes of Marand, a very successful Australian company. Not only for them to supply not only our first shipset, but could be positioned to supply the whole of the global combat ship program into Canada and the UK. So we’re doing a lot of good work with the Commonwealth looking at those types of AIC cases across many aspects of the supply chain. Cat C and D were always intended to be for the domestic Australian market.
ADM spoke to over a dozen SMEs who have been in- volved in the Hunter and Type 26 programs in Australia and the UK respectively. Most were not comfortable putting their names or company on the record; one does not bite
“DESPITE THE PUBLIC STATEMENTS FROM BAE SYSTEMS MARITIME AUSTRALIA, THE COMMONWEALTH VIA THE DEPARTMENT OF DEFENCE AND GOVERNMENT, THE ENGAGEMENT OF SMALL TO MEDIUM AUSTRALIAN BUSINESSES HAS NOT BEEN AS ROSY AS SOME WOULD HOPE.”