As the Australian Air Force marks the end of an era with the withdrawal of the Heron remotely piloted aircraft from service, questions have been raised about the handling of project AIR 7003 Phase 1.
Project AIR 7003 Phase 1 is calling for a medium-altitude long-endurance (MALE) unmanned aerial system (UAS), colloquially known as self-piloted killer drones.
The Defence Integrated Investment Program (DIIP) lists the project as one that is a contestable project, but Israel Aerospace Industries (IAI), Israel’s largest defence company and a supplier of UAS solutions, has claimed the department has blocked out the company from tendering in favour of a foreign military sale (FMS) of the US General Atomics Reaper.
General Atomics Aeronautical Systems (GA-ASI) launched their industry partnership for Team Reaper with key industry players at Avalon 2017, a team made up of Cobham, Raytheon Australia, CAE Australia and Flight Data Systems.
IAI, which has had representation in Australia for the last 35 years, has been attempting to put forward its Heron TP capability, the armed and improved variant of the recently withdrawn Heron, which has an altitude of up to 45,000 feet and a maximum take off weight of 5,400 kilograms, but the company says the department has all but decided on a FMS of the Reaper.
"All indications are, from the department and particularly from the Air Force, the Air Force wants to sole source it through FMS to General Atomics for their Reaper/Certifiable Predator B variant," said Claire Willette, IAI's senior consultant on the project.
While it is not surprising that the Australian Air Force would favour the same UAS capability as its US ally, the process for acquiring this capability is seemingly lacking due diligence.
"This is one of the problems we have with this process, the lack of transparency," vice president of IAI's Military Aircraft Group Shaul Shahar said.
"This is a contestable project, according to the IIP. Now, there [are] two suppliers/two countries companies that [have] this capability to support the requirements in this project. As a company we have a significant footprint all over the world with our product ... We think that we have a solution that can benefit of Australia.
"Because of the lack of transparency in this process, and it's very weird to us because we expect that there will be a process including evaluation, risk analysis, according to all the stages that they need. At the end they can decide to go to sole source, but during the evaluation, we thought that they need to check what other alternatives that are on the table and to have all the data needed to do this analysis. If they (RAAF) didn't approach us, and up to now haven’t given us the chance to know what questions need to be answered, what information we need to bring to the table, it means they are moving forward without going through all the right stages in their stated process."
Interestingly, when both IAI's and General Atomics' solutions have gone head-to-head in evaluation processes overseas in France and Germany, the Heron TP solution has come out on top.
Given the industry's overwhelming disappointment in the recent LAND 19 Phase 7B project decision, which saw the government opt for a single supplier limited request for tender and award Raytheon a $2 billion deal, it is somewhat surprising an RFI has not been issued.
“Another example of the Department making sole-source decisions is Land 19. The difference in that case is that limited RFIs were released prior to the decision to sole-source. In the case of AIR 7003 this isn’t the case as no RFIs have been released,” said IAI Australia's managing director Daniel Lipshut.
IAI has also stressed that the handling of the project is in direct contrast to Minister for Defence Industry Christopher Pyne's ongoing initiative of increasing Australian industry content across the defence industry, an initiative the company supports and one it feels it can contribute to with this project, unlike an FMS option.
"The initiative of the new Minister for Defence Industry Christopher Pyne ... this is something that is very important because at the same time that you are speaking about the way that they are continuing to buy systems from the US in FMS cases, there is an initiative and a lot of correspondence, direction and saying from the Government that Australia really wants to take their defence industry forward and to grow this kind of industry in the specific field," explained Willette.
"FMS usually caps out anywhere from 0-10 per cent in terms of offset industrial participation. You'd figure that this is a $1-2 billion project, that could be anywhere from $35-70 million. The Australian industry content (AIC) associated with a Heron TP equates to a significant percentage of the overall program cost. This is in addition to through-life support and maintenance costs; as well as the value of IP transfer.
"IAI would offer integration, training, education, ground stations and beyond that, everything that comes with sustainment and through-life support. The accrued knowledge along with the IP transfer that is substantive, and frankly, one of those almost unheard of things across defence industry will also allow for that sort of excellence and systems subject matter as perceived to be homegrown here in Australia, which would then be able to lead towards the development of an exportable market whether it's into the region here or elsewhere."
And while it may be all but too late for IAI, with Defence's Investment Committee expected to make a decision in the next two weeks, the company has put forward this question: "Where can the department demonstrate that they have done a comparison? A comparative analysis that includes capability, Australian industry content, which is AIC, and best value for money, that evaluates systems and proposals other than those provided by General Atomics?"
Defence Connect contacted the Department of Defence for comment. At the time of publication no comment was provided.
The Department of Defence provided Defence Connect with the following statement after publication.
"Defence is considering a range of options for the future Australian Defence Force capability to be delivered by AIR 7003. No decision on which system will be acquired has been made."