Appendix A: Defence Cooperation Program

Appendix C: Top 30 Acquisition Projects by 2016-17 Forecast Expenditure

68. 
    Top 30 Acquisition Projects by 2016-17 Forecast Expenditure (Gross Plan)
    

    	Project Number/ Phase	Approved Project Expenditure $m	Estimated Cumulative Expenditure to 30 June 2016 $m	Budget Estimate 2016-17 $m	Revised Estimate 2016-17 $m	Variation $m	Project Performance Update and Explanation of Variation
    Aerospace
    Maritime Patrol and Response Aircraft System	AIR 7000 Phase 2	5,253	1,578	1,047	1,090	43	In November 2016 the first RAAF P-8A Poseidon aircraft was delivered, and is expected to enter RAAF service in 2016. The aircraft will be utilised to commence the Initial Operational Test and Evaluation program, which will progressively expand the operational roles performed by the RAAF P-8A. The first two (of three) Mobile Tactical Operations Centres will also be delivered, and connected to the Defence Single Information Environment. The variance is due to earlier than planned payments for equipment, early establishment of the maintenance training contract and increase in mission support system costs.
    New Air Combat Capability	AIR 6000 Phase 2A/B	15,729	931	726	644	-81	Australian F-35A pilot training is continuing at the International Pilot Training Centre at Luke Air Force Base in Arizona, where the first two Australian F-35A aircraft are currently deployed. Initial Australian F-35 maintenance training will commence at Eglin Air Force Base in Florida from February 2017. Other major activities are progressing as follows: production of Australia’s next eight F-35A aircraft under the Low Rate Initial Production 10 Contract; contracting activity associated with procurement of a further eight F-35A aircraft under the Low Rate Initial Production 11 Contract, and 15 aircraft under the mature production Lot 12 Contract; construction of F-35A facilities at RAAF Base Williamtown, New South Wales; maturing the development of the sustainment model for Australian based support; and detailed planning for the ferry of the first two Australian F-35A aircraft to RAAF Base Williamtown in 2018. Variance in forecast expenditure (-$81 million) is attributed to aircraft contract payments being reduced to reflect latest estimate of contract schedules and invoicing, some earlier payments than expected (in financial year 2015-16 in lieu of 2016-17), some rescheduling of Foreign Military Sales Case activities, and movement in the Australian dollar relative to foreign currencies. These variations do not impact project schedule; the project remains on schedule to deliver F-35A Initial Operating Capability in 2020.

    
    Table 67: Top 30 Acquisition Projects by 2016-17 Forecast Expenditure (Gross Plan) (Continued)
    

Table 67: Top 30 Acquisition Projects by 2016-17 Forecast Expenditure (Gross Plan) (Continued)


	Project Number/ Phase	Approved Project Expenditure $m	Estimated Cumulative Expenditure to 30 June 2016 $m	Budget Estimate 2016-17 $m	Revised Estimate 2016-17 $m	Variation $m	Project Performance Update and Explanation of Variation
Joint
Battlespace Communications System (Land)	JP 2072 Phase 2B	930	119	167	140	-26	Detailed Design Review was completed on schedule in November 2016 and has demonstrated prototypes of key elements of the capability. The development of activities in 2016-17 is in preparation for capability testing, production and first deliveries in mid 2017. The key risk for the project is the contractor coordinating and integrating the developmental activities of multiple sub-elements of the capability. Funding variation relates to milestone delays for this project resulting from later than planned delivery of Enhanced Deployable Local Area Network.
Woomera Test Range Remediation	JP 3024 Phase 1	238	35	78	66	-12	Funding variation is due to anticipated delays in contract signatures for Detailed Design Review and Technical Progress Review activities, from 2016-17, now expected to occur in 2017-18.
Maritime Communication Modernisation	SEA 1442 Phase 4	435	102	71	66	-5	Funding variation reflects the re-programming of $5.4m in planned spares deliveries to 2017-18 to better align with the overall project schedule. SEA 1442 Phase 4 has experienced some delay in completion of the design stage, although this has no material impact to the scheduled Initial Operational Capability.
Civil Military Air Traffic System (CMATS)	AIR 5431 Phase 3	731	23	60	51	-9	Contract signature has been delayed into 2017-18 due to extended negotiations with the preferred tenderer under the joint OneSKY program being led by Airservices Australia.
Enhanced Land Electronic Warfare Systems	DEF 500 Phase 1	181	8	56	49	-8	Work against the Electronic Warfare manpack milestones is progressing ahead of schedule. Funding variation relates to delay in purchase of training systems to align with the delays in the upgrades to training facilities.
Battlefield Command Systems	LAND 75 Phase 4	376	293	53	27	-26	Variation relates to later than expected payments for final acceptance and physical configuration audit activities. Program still remains on track. The key risk for this project remains the complexity of systems integration of the Battle Management System into other related systems that are either in development or in use within the Australian Defence Force.
Improved Tactical Electronic Support Capability for ANZAC Class	SEA 1448 Phase 4A	280	120	52	59	8	The Project has successfully installed the new tactical Electronic Support system on seven Anzac Class frigates and at two shore facilities. The installation in the final Anzac class frigate is scheduled to be completed first quarter 2017. The expenditure of $8 million for the purchase of a Shore Support system was bought forward to enable in-country support of the new tactical Electronic Support system capability for the Anzac class.


Table 67: Top 30 Acquisition Projects by 2016-17 Forecast Expenditure (Gross Plan) (Continued)


	Project Number/ Phase	Approved Project Expenditure $m	Estimated Cumulative Expenditure to 30 June 2016 $m	Budget Estimate 2016-17 $m	Revised Estimate 2016-17 $m	Variation $m	Project Performance Update and Explanation of Variation
Land Systems
Medium and Heavy Capability (MHC), Field Vehicles, Modules and Trailers (FVMT)	LAND 121 Phase 3B	3,405	318	686	682	-4	The variation is primarily due to bringing forward the delivery of trailers into 2015-16 and vehicles into 2016-17 to align with industry’s capacity to deliver.
Soldier Enhancement Version 2 - Lethality	LAND 125 Phase 3C	466	41	110	105	-4	The variation is primarily due to a change to align with industry’s capacity to deliver in 2017-18.
Project Overlander - Protected Mobility Vehicle-Light	LAND 121 Phase 4	1,961	247	95	56	-39	The variation is primarily due to the rescheduling of design review payments from June to July 2017.
Enhancements to Special Operations Capability	JP 2097 Phase 1B	339	174	89	96	7	The variation is primarily due to reprogramming from 2015-16 to 2016-17 in relation to a subcontractor entering administration, and reliability and design issues with the Special Operations Vehicle – Commando.
Enhanced Gap Crossing Capability	LAND 155 Phase 1	218	46	69	81	12	The variation is primarily due to emergent integration requirements for the Rapid Emplacement Bridge 10x10 vehicles; reprogramming of the delivery of footbridges and Managing Contractor activities into 2016-17.
Direct Fire Support Weapons	LAND 40 Phase 2	165	44	63	52	-11	The Light Weight Automatic Grenade Launcher Acquisition and Support contracts were signed in June 2015. The first weapon systems were delivered to Army in November 2016 with the remaining weapon systems planned to be delivered by the end of July 2017. The variation is primarily due to the reprogramming of deliveries into 2017-18 to align with industry’s capacity to deliver.
Additional Lightweight Towed Howitzers and Capability Assurance Program	LAND 17 Phase 1C1	223	79	58	56	-2	The variation is primarily due to reprogramming associated with procurement of training simulators.
Soldier Enhancement Version 2 - Survivability	LAND 125 Phase 3B	185	95	52	61	9	Funding was reprogrammed from 2015-16 to 2016-17 to align with the supplier’s capacity to concurrently deliver LAND 125 Phase 3B and Army’s Soldier Combat Ensemble Modernisation Plan equipment requirements.


Table 67: Top 30 Acquisition Projects by 2016-17 Forecast Expenditure (Gross Plan) (Continued)