Project Data Summary Sheet 155 Project Number LAND19 Phase 7B Project Name SHORT RANGE GROUND BASED AIR DEFENCE First Year Reported in 2020-21 the MPR Capability Type Replacement Capability Manager Chief of Army Government 1st Pass Feb 17 Approva Government 2nd Pass Feb 19 Approval Budget at 2nd Pass $ 1,274.3m Approval Total Approved Budget $1,201.0m (Current) 2020-21 Budget $167.5m Complexity ACAT II Section 1 -Project Summary 1.1 Project Description LAND19 Phase 7B Short Range Ground Based Air Defence (SRGBAD) Project will introduce into service the Army-operated component of the Integrated Air and Missile Defence (AMD) capability to achieve an enhanced Ground-Based Force Protection system. The primary objectives of the project are to deliver a scalable SRGBAD capability that can sense, warn, manage and counter weapons and sensor effects of fixed and rotary wing platforms, unmanned aerial systems (UAS), stand-off weapons, Rocket Part 3. Project Data Summary Sheets Artillery Mortar (RAM) and missiles within the required environments. The capability being acquired is an enhanced version of the jointly developed Raytheon-Kongsberg National Advanced Surface to Air Missile System (NASAMS), which is currently in-service with a number of nations. The capability is being acquired through a contract with Raytheon Australia Two NASAMS Batteries are being acquired, each consisting of three Fire Units, with additional sub-systems for training purposes. A single Fire Unit consists of missile launchers, sensors, and a command & control centre, and is capable of protecting a specified area from a range of airborne threats. A single battery is capable of meeting the operational requirements, with the second battery being used for training purposes. 1.2 Current Status Cost Performance In-year As at 30 June 2021, financial year 2020-21 expenditure was $172.3m against a budget of $167.5m. The EOFY expenditure is in line with the forecast, with only minor variations. Project Financial Assurance Statement As at 30 June 2021, project LAND19 Phase 7B has reviewed the approved scope and budget for those elements required to be delivered by Defence. Having reviewed the current financial and contractual obligations of Defence, current known risks and estimated future expenditure, Defence considers, as at the reporting date, there is sufficient budget including contingency remaining for the project to complete against the agreed scope. Contingency Statement The project has not applied contingency funds in the financial year. SRGB Air Defence 155 Notice to reader Forecast dates and Sections: 1.2 (Materiel Capability Delivery Performance), 1.3 (Major Risks and Issues), 4.1 (Measures of Materiel Capability Delivery Performance), and 5 (Major Risks and Issues) are excluded from the scope of the ANAO's review of this Project Data Summary Sheet. Information on the scope of the review is provided in the Independent Review Report by the Auditor-General in Part 3 of this report. Project Data Summary Sheets Auditor-General Report No. 13 2021-22 2020-21 Major Projects Report 221Schedule Performance The project has completed the design phase for NASAMS during 2020, with successful completion of the Detailed Design Review on schedule in December 2020. There have been delays in the provision of some items of Government Furnished Materiel (GFM) to Raytheon Australia, primarily due to longer than anticipated export approvals. Despite mitigation strategies, these delays have created a risk of future schedule delays and associated cost increases. The project is also facing a high risk of future delays to major program milestones (notably Initial Operating Capability (IOC), due to the impact of COVID-19. The international travel restrictions in place between industry partners in Australia, Norway and the US have prevented effective collaboration, integration and test activities throughout 2020 and into 2021. When combined with GFM delays, this has transferred technical risk to later parts of the project, compressing planned activities and increasing the likelihood of rework. The Final Operating Capability (FOC) remains on schedule, despite the risk of delays to IOC. Materiel Capability Delivery Performance The project is on track to deliver against all agreed capability outcomes for the Final Operating Capability Note Forecast dates and capability assessments are excluded from the scope of the Auditor-General's Independent Assurance Report. 1.3 Project Context Background LAND19 Phase 7B was one of the first projects to be considered under the new Capability Life Cycle, and the Smart Buyer framework was still being defined at this time. The project participated in a pilot Smart Buyer workshop, and the principles identified in this were applied as part of the First Pass Approval process. This workshop identified risk in financial, requirements, integration, and schedule components of the project. These risks were subsequently considered as part of the project's acquisition strategy, and addressed in the Risk Mitigation Activity (RMA) between First Pass and Second Pass. The project received First Pass Approval from Government in February 2017. This approval included release of a Single Supplier Limited Tender to Raytheon Australia as Prime Systems Integrator (PSI) for the acquisition and sustainment of the SRGBAD capability, as well as for the conduct of a RMA between First Pass and Second Pass to reduce technical risks associated with system integration and assess the environmental durability of key sub-systems. This approval also included direction to nvestigate the Canberra-based company CEA Technologies' (CEA) sensors for use in a ground-based air defence environment between First Pass and Second Pass. The preferred capability option presented at Second Pass was based on the NASAMS baseline but with significant Part 3. Project Data Summary Sheets enhancements, This option provided an enhanced capability, addressed obsolescence risks, provided greater Australian industry content, and as a result was assessed as being better value for money. This option was approved by Government in February 2019. The following major procurement activities have since occurred: Contract signature was achieved with Raytheon Australia as PSI in June 2019; Contract signature was achieved with CEA Technologies for the provision of operational and tactical radars in November 2019 The Foreign Military Sales (FMS) offer for the purchase of missiles was accepted by the Commonwealth in March 2020; Contract signature was achieved with Raytheon Australia as the Support Contractor in December 2020. Uniqueness NASAMS is an established and mature ground based air defence capability, however under LAND19 Phase 7B, Defence is undertaking a number of enhancements, which make it unique. The most significant of these is replacing the standard NASAMS radar with radars from Australian company CEA Technologies. Other modifications, which are not common across the international user base, include integration with Army in-service vehicles and radios and interfacing with existing Land and Joint nformation networks Major Risks and Issues The project is currently managing the following major risks: Inability to conduct integration and test activities due to COVID-19 international travel restrictions, resulting in technical aults during acceptance testing, schedule variation and increased cost; and A heavily constrained operational test and evaluation timeline. SRGB Air Defence Other Current Related Projects/Phases LAND121 Phase 4 will acquire and deliver into service Protected Mobility Vehicles - Light (PMV-L) and companion trailers for command, liaison, reconnaissance and utility roles; and the associated training and support systems. Elements of LAND19 Phase 7B tactical radar and high mobility launcher system being acquired for this capability will be integrated onto the Hawkei mission system Note Major risks and issues are excluded from the scope of the Auditor-General's Independent Assurance Report. Project Data Summary Sheets Auditor-General Report No.13 2021-22 2020-21 Major Projects Report 222Section 2 -Financial Performance 2.1 Project Budget (out-turned) and Expenditure History Date Description $m Notes Project Budget May 17 Original Approval (First Pass Approval) 25.9 Jun 19 Government Second Pass Approval 1,248.4 Total at Second Pass Approval 1,274.3 Jun 21 Exchange Variation (73.4) Jun 21 Total Budget 1,201.0 Project Expenditure Prior to Jul 20 Contract Expenditure - Raytheon Australia 192.7) Contract Expenditure - CEA Technologies (57.9) Contract Expenditure - US Government (AT-D-YAI) Other Contract Payments / Expenses (25.3) N - (275.9) FY to Jun 21 Contract Expenditure - Raytheon Australia (118.4) Contract Expenditure - CEA Technologies (44.7) Contract Expenditure - US Government (AT-D-YAI) Other Contract Payments / Expenses (9.2) 2 (172.3) Jun 21 Total Expenditure (448.2) Part 3. Project Data Summary Sheets Jun 21 Remaining Budget 752.8 Notes Price and expenditure related to missile procurement is classified. This expenditure has been reported as part of Other Contract Payments / Expenses. 2 Other Contracts Payments/Internal Expenses comprises: Risk Mitigation Activities, operating expenditure, contractors, consultants, and other capital expenditure not attributable to the aforementioned contracts 2.2A In-year Budget Estimate Variance Estimate PBS $m Estimate PAES Estimate Final Explanation of Material Movements Sm Plan $m 174.4 171.5 167.5 PBS-PAES: Forecast expenditure is in line with the 2020-21 Budget Estimate with only minor variation. PAES-Final Plan: Forecast expenditure is in line with the 2020-21 PAES with only minor variation. Variance $m (2.9) ( 4.0) Total Variance ($m): (6.9) Variance %% (1.7) (2.3) Total Vanance (%): (4.0) SRGB Air Defence Project Data Summary Sheets Auditor-General Report No. 13 2021-22 2020-21 Major Projects Report 2232.2B In-year Budget/Expenditure Variance Estimate Actual Variance Variance Factor Explanation Final Plan $m $m $m 1.7 Australian Industry The variance is primarily due to early (0.8) Foreign Industry delivery of some milestones, minor cost increases due to design changes, and Early Processes higher than estimated escalation costs. 3.8 Defence Processes Foreign Government Negotiations/Payments Cost Saving Effort in Support of Operations Additional Governmen Approvals 167.5 172.3 4.8 Total Variance 2.8 % Variance 2.3 Details of Project Major Contracts Signature Date Price at Type (Price Form of Contractor Basis) Contract Signature 30 Jun Notes $m 21 $m Raytheon Australia Jun 19 680.1 730.7 Fixed Price Standard 1, 2 Defence Contract CEA Technologies Nov 19 137.1 153.1 Fixed Price Standard 1 , 2 Defence Contract US Government (AT-D-YAI) Mar 2 Reimbursement FMS 3 Notes Contract value as at 30 June 2021 is based on actual expenditure to 30 June 2021 and remaining commitment at Part 3. Project Data Summary Sheets current exchange rates, and includes adjustments for indexation (where applicable) 2 The price increa ce contract signature is primarily due to escalation and foreign exchange rate variation. 3 Pricing related to missile procurement is classified Contractor Contracted Quantities as at Scope Notes Signature 30 Jun 21 Raytheon Australia NASAMS Fire Units plus training equipment CEA Technologies Tactical Tactical Radars plus training and support equipment Radar Radars Operational Operational Radars Radars US Government Classified Classified Missiles Major equipment accepted and quantities to 30 Jun 2 Nil Section 3 - Schedule Performance 3.1 Design Review Progress Review Major System/Platform Original Current Achieved/ Variance Notes Variant Planned Contracted Forecast (Months) System Requirements NASAMS Oct 19 NI Oct 19 SRGB Air Defence 0 CEA Radars Apr 20 N/A Apr 20 0 Preliminary Design NASAMS May 20 N/A May 20 0 Detailed Design NASAMS Dec 20 NIA Dec 20 0 CEA Radars Jul 21 N/A Jul 21 Notes 1| Preliminary Design aspects for CEA Radars were covered in the NASAMS PDR. Project Data Summary Sheets Auditor-General Report No.13 2021-22 2020-21 Major Projects Report 2243.2 Contractor Test and Evaluation Progress Test and Evaluation Major System/Platform Original Current Achieved/ Variance Notes Variant Planned Contracted Forecast (Months) System Integration First of Type (FOT Jan 22 N/A Jan 22 1 Canister Launcher Factory Acceptance Test (FAT) FoT Fire Distribution Apr 22 N/A Apr 22 0 1 Centre FAT Flight Trial Jun 22 N/A Jun 22 0 1 Acceptance Fire Unit 1 (first) Mar 23 NIA Mar 23 0 1, 2 (NASAMS Fire Units) Fire Unit 7 (final) May 24 N/A May 24 0 Acceptance (CEA Tactical Radar (first) Mar 2: NIA Mar 2: 0 Radars) Tactical Radar (final) Jun 24 N/A Jun 24 0 Operational Radar (first) Mar 23 N/A Mar 23 0 Operational Radar Apr 24 N/A Apr 24 (final) Notes This milestone is at risk of delay, however the magnitude of the delay is still to be determined. COVID-19 restrictions on international travel have prevented effective collaboration, integration and test activities throughout 2020 and into 2021. There have also been delays to provision of Government Furnished Materiel, which are expected to further impact forecast dates. 2 Fire Unit composition varies per Fire Unit (i.e. number and type of launchers and other major systems). 3.3 Progress Toward Materiel Release and Operational Capability Milestones Item Original Planned Achieved/Forecast Variance (Months) Notes Initial Materiel Release (IMR) May 23 May 23 0 Initial Operational Capability (IOC) Jun 23 Jun 23 0 Final Materiel Release (FMR Sep 25 Sep 25 0 Final Operational Capability (FOC) Jun 26 Jun 26 Part 3. Project Data Summary Sheets Notes This milestone is at risk of delay, however the magnitude of the delay is still to be determined. COVID-19 restrictions on international travel have prevented effective collaboration, integration and test activities throughout 2020 and into 2021. There have also been delays to provision of Government Furnished Materiel, which are expected to further impact forecast dates. hedule Status at 30 June 2021 Approval FMR FOC Original Planned IMR IOC IMR Forecast Achieved / Approval FMR FOC Feb-19 Jun-19 Oct-19 Feb-20 Jun-20 Oct-20 Feb-21 Jun-21 Oct-21 Feb-22 Jun-22 Oct-2 Feb-23 Jun-23 Oct-23 Feb-24 Jun-24 Oct-24 Feb 25 Jun-25 Oct-25 Feb-26 Jun-26 SRGB Air Defence Note Forecast dates in Section 3 are excluded from the scope of the Auditor-General's Independent Assurance Report. Project Data Summary Sheets Auditor-General Report No. 13 2021-22 2020-21 Major Projects Report 225