Minister for Defence Stephen Smith and Minister for Defence Materiel Jason Clare today announced the removal of another three projects from the Projects of Concern list – halving the number of projects on the list over the past 12 months.

The three projects to be removed are:

• Land 121 Phase 3B – Overlander replacement field vehicles, trailers and modules (Medium Heavy class);
• AIR 5418 Phase 1 – Joint Air-to-Surface Standoff Missile (JASSM); and
• JOINT 129 Phase 2 – Tactical Unmanned Aerial Vehicles.

This cuts the number of projects on the Projects of Concern list from 12 at the beginning of the year to six. 

So far this year seven projects have been removed from the list, six through remediation and one through cancellation.  One project has been added.

The Projects of Concern process was established by the Government in 2008 to focus the attention of the highest levels of Government, Defence and Industry on remediating problem projects. 

Since then, 19 projects have been put on the list.  Of those, 13 have been removed – 11 due to remediation and two due to cancellation.

The removal of these three projects is further evidence that the system is working.

In June, Mr Smith and Mr Clare announced reforms to strengthen the Projects of Concern process, including:

• The establishment of a more formal process for adding projects to the list;
• The establishment of a formal process for removing projects from the list;
• The development of agreed remediation plans, including formal milestones for the removal of a project from the list; 
• Increased Ministerial involvement and oversight of the process; and
• Incentives for companies to fix projects on the list by taking into account the performance of companies in addressing Projects of Concern when evaluating their tenders for other projects.

Four out of five of these reforms have been implemented with the fifth – development of agreed remediation plans – well underway.

Land 121 Phase 3B:

This project was listed as a Project of Concern in 2008 due to increased technical, cost and schedule risks, and concern about the ability of the originally preferred tenderer’s capacity to deliver against their tendered offer. 

These issues, together with probity concerns arising from additional vehicle and module requirements, led to the Commonwealth withdrawing from negotiations.  A resubmission of tenders was conducted in 2010.

Yesterday, the Government announced that subject to the negotiation of a suitable contract Rheinmetall MAN had been down-selected as the preferred tenderer and will now enter into detailed negotiations to provide up to 2,700 protected and unprotected medium and heavy vehicles. 

Due to this milestone being reached, the Acting Chief Executive Officer of the Defence Materiel Organisation has recommended the project be removed from the Projects of Concern list.

The Government has agreed with this recommendation.

AIR 5418 Phase 1 – Joint Air-to-Surface Standoff Missile (JASSM):

This project was approved in December 2005 to acquire JASSM for deployment on Classic Hornets.

The project was listed as a Project of Concern in November 2010 due to a failure by Defence to keep Government properly informed about the project’s progress.

The lesson of this project is that Defence cannot fail to keep Government properly and fully informed about projects and their difficulties.

The JASSM project has been used as a case study for improvements in the management of major Defence projects. Lessons from the project informed the Government’s response to the “Review of the Defence Accountability Framework” (the Black Review), which Minister Smith released in August.

In July this year, the missile was successfully tested at theWoomeraTestRangeinSouth Australia. In November the Chief of Air Force provided service release, certifying the JASSM for use onAustralia’s F/A-18 A/Bs.

The Acting Chief Executive Officer of the Defence Materiel Organisation has recommended the project be removed from the Projects of Concern list.

The Government has accepted this recommendation.

JOINT 129 Phase 2 – Tactical Unmanned Aerial Vehicles:

This project will provide two Shadow 200 Tactical Unmanned Aerial Vehcile (TUAV) systems, each of five air vehicles, two ground control stations, and associated support systems, logistics and training.

The project was first approved in November 2005. 

The project was added to the Projects of Concern list in 2008, when the original contract to acquire TUAVs from commercial sources was terminated after a number of technical issues and schedule delays.

Following cancellation of the original contract, in 2010 Government approved the acquisition of 2 off-the-shelf Shadow 200 systems under aUnited States’ Foreign Military Sales (FMS) arrangement.

The first of these has been delivered toAfghanistan.

With the achievement of this milestone, the Acting Chief Executive Officer of the Defence Materiel Organisation has recommended that the project be removed from the Projects of Concern List.

The Government has accepted this recommendation.

Projects of Concern List:

Projects removed from Projects of Concern list: