Back to news

July 3, 2018 | International, Naval

Australia officially announces $26B frigate contract. Here are the build details

By:

MELBOURNE, Australia ― Australia will acquire nine high-end anti-submarine warfare frigates from the end of the next decade under a deal with BAE Systems worth AU$35 billion (U.S. $26 billion).

The announcement was formally made Friday at the ASC shipyard in Osborne, South Australia, by Prime Minister Malcolm Turnbull, Minister for Defence Marise Payne and Minister for Defence Industry Christopher Pyne.

A version of BAE Systems' City-class Type 26 ASW frigate, now under construction for the British Royal Navy, will be acquired under Australia's SEA 5000 Phase 1 project, also known as the Future Frigate Project.

Referred to as the Global Combat Ship―Australia, or GCS-A, during the competition, the design will be known as the Hunter-class in Royal Australian Navy service and will replace the Navy's existing Anzac-class frigates.

There has been speculation in the media that the decision to go with BAE may be driven, in part, by Australia's desire to secure strong terms with the U.K. as it negotiates a series of new trade agreements after Britain leaves the European Union.

Payne noted Friday that the GCS-A design was selected because it was the most capable ASW platform.

“This is a decision entirely based on capability, the best capability to equip the Navy in anti-submarine warfare,” she said.

Regardless, news of BAE's win was welcomed in the United Kingdom, with Secretary of State for Defence Gavin Williamson referring to it as the “biggest maritime defence deal of the decade.”

“This £20 billion ‘deal of the decade' demonstrates how British defence plays a huge role in creating jobs and prosperity and is ‘Global Britain' in action,” he commented on social media. “Great to see our military and industrial links strengthen with Australia.”

The ships will be built by ASC Shipbuilding in South Australia, using local workers and Australian steel, under the Turnbull government's continuous naval shipbuilding program.

“What we are doing here is announcing our commitment to build the nine Future Frigates,” Prime Minister Turnbull said. “The Hunter-class frigates will be the most advanced anti-submarine warships in the world.”

The Hunter-class frigates will be equipped with CEA Technologies-built CEAFAR phased array radar currently fitted to the Navy's post-anti-ship missile defense Anzac frigates, together with Lockheed Martin's Aegis combat system and an interface provided by Saab Australia.

The Aegis combat system was mandated for all of Australia's major surface combatants by the Turnbull government in October 2017.

The GCS-A design was selected in preference to Fincantieri's Australian FREMM, dubbed FREMM-A, a variant of the ASW-optimized FREMM frigate now in service with the Italian Navy; and the F-5000 from Navantia, based on an evolution of the Royal Australian Navy's Hobart-class air warfare destroyer, which in turn is a derivative of the Spanish Navy's F-100 Álvaro de Bazán class.

An ASW capability was the highest priority for the Royal Australian Navy, according to Chief of Navy Vice Adm. Tim Barrett.

“I spoke as recently as last night to the First Sea Lord, my equivalent in the [British] Royal Navy, and I am assured by his comments on just how successful this platform will be as the world's most advanced anti-submarine warfare frigate,” he said Friday.

The first steel is due to be cut on prototyping activities for the build at Osborne in late 2020, with full production following in 2022. The first ship of the class will be delivered to the Royal Australian Navy in the late 2020s.

Under the deal, the government-owned shipbuilder ASC will become a subsidiary of BAE Systems during the build, with the government retaining a sovereign share in the entity. The shipyard will revert to government ownership at the end of the project.

Turnbull said the arrangement ensures BAE Systems is fully responsible and accountable for the delivery of the frigates, noting that Australia retains the intellectual property and a highly skilled workforce at the end of the program.

“My expectation is that the next generation of frigates that comes after the ones we're about to start building at ASC will be designed and built in Australia,” he said.

BAE System's global maritime systems business development director, Nigel Stewart, told Defense News that he welcomes the build strategy.

“We were really pleased with that as an outcome because ASC has great capability. We always wanted to use the workforce, but this allows us to join ASC and BAE together much earlier, and we think that will be really positive,” he said.

Stewart said the plan was for the Hunter-class build to follow the Type 26 activity in the U.K. by around five years, which will serve to de-risk the Australian program. BAE is due to deliver the first ship, HMS Glasgow, to the British Royal Navy in 2025, with entry into service in the 2027 time frame.

“We cut steel for the first Type 26 in the U.K. in June 2017, and we'll cut steel for full production of the Hunter class in South Australia in 2022,” he said. “We'll run at an 18-month drumbeat in the U.K., and somewhere between 18 months and two years in Australia. That will keep a five-year gap, which is almost perfect. You are de-risking the Australian program in the U.K. and you don't get the obsolescence issues you would if there was a longer gap, so it's a really good program overlap.”

In other news Friday, the Turnbull government announced it will set up a AU$670 million training and capability center for the Hunter-class frigates in Western Australia.

Known as Ship Zero, the initiative will be established at HMAS Stirling, the Navy's Fleet Base West, at the shipbuilding facility in Henderson. Much of the training traditionally performed at sea will be transferred into the land-based facility.

The capital works project will be considered by the Australian Parliament early next year, and construction is expected to commence in 2019.

https://www.defensenews.com/naval/2018/06/29/australia-officially-announces-26b-frigate-contract-here-are-the-build-details/

On the same subject

  • Defense contractor with billions in sales got millions in pandemic loans intended for small businesses

    August 4, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    Defense contractor with billions in sales got millions in pandemic loans intended for small businesses

    By Aaron Gregg August 3, 2020 at 8:00 a.m. EDT A military equipment supplier that has been accused of fraudulently misrepresenting its size in order to benefit from privileges associated with being a small business has received a Paycheck Protection Program small business loan worth at least $2 million, public records show. Atlantic Diving Supply, a Virginia Beach, Va.-based reseller of specialized military gear, is the latest organization whose receipt of taxpayer-backed loans through the Paycheck Protection Program has raised questions about a program launched in early April to help sustain employment at small companies through the economic crisis. In late April, the Treasury Department retroactively clarified its rules after well-known restaurant chains, car dealerships and hotel companies reported receiving PPP loans. Several of them returned the loan funds following public uproar; others kept the money. The SBA has said it will audit all PPP loans above $2 million to determine whether the recipients were eligible. Representatives from the Small Business Administration and Atlantic Diving Supply did not comment on the company's receipt of SBA loans. The company's legal issues are detailed extensively in a report released Monday by the nonprofit Project on Government Oversight, known as POGO. A review of business data by POGO and the nonprofit Anti-Corruption Data Collective concluded that ADS was one of at least 27 PPP recipients estimated annual sales of more than $1 billion in 2019. Another 2,068 loan recipients cleared $100 million in sales last year, according to the analysis. Nick Schwellenbach, a senior investigator at POGO, questioned whether it's appropriate for ADS to receive small business coronavirus loans. Schwellenbach's investigation also found that two other firms allegedly tied to ADS ― including one that was named in a settlement with the Department of Justice ― separately received smaller PPP loans. “It's important that taxpayer funding reserved for genuine small businesses isn't siphoned off by companies that are not eligible,” Schwellenbach said. “As a top government contractor with revenues well over a billion dollars a year, it strains credibility that Atlantic Diving Supply is a real small business, especially given several recent settlements and law enforcement outcomes related to their alleged small business contracting fraud." Although it received a favorable ruling from the SBA as recently as November 2019, ADS's small business credentials have long been called into question. ADS started as a small, family-owned shop focused on the military diving community in Virginia Beach, which includes the Navy SEALs. It was transformed under the leadership of long-time chief executive Luke Hillier, winning its first major government contract in 2000. It grew quickly to meet an insatiable demand for military gear of all sorts in the years following 9/11. That fast growth became permanent business as the U.S. military presence in Iraq, Afghanistan and elsewhere dragged on for nearly two decades. At one point, ADS filed papers to go public, something that is usually the purview of large corporations. In 2015 it purchased Theodore Wille International, a military food and equipment supplier with offices in seven countries. Its business has remained healthy despite recent troop reductions. ADS received more than $3 billion in unclassified government contract dollars in 2019, procurement records show. That's more than some well-known, objectively large government contractors, including Bechtel, KBR and CACI. ADS has already cleared $1 billion in federal contract receipts in 2020 despite the economic crisis. As it has grown ADS's continued status as a small business status has been critical to its participation in the Defense Department's Tailored Logistics Support, or TLS program, a lucrative military supply line that is largely restricted to SBA-approved small and disadvantaged businesses. In recent years, ADS's official headcount has teetered close to the SBA's 500-employee limit for small-company designation, and the company has fought off repeated challenges to its size status. If ADS were declared “no longer small,” it would not only be ineligible for SBA coronavirus assistance, but would also be forbidden from competing on small business set-aside contracts that drive its business. In 2017, ADS settled federal allegations that it used a network of allegedly-affiliated companies to rig bids and fraudulently misrepresent its size. The Justice Department called the $16 million settlement “one of the largest recoveries involving alleged fraud in connection with small business contracting eligibility.” Hillier, who has moved on from the CEO role but remained the company's chairman as of July 20, according to a company filing, separately paid $20 million to settle federal allegations that he “violated the False Claims Act by fraudulently obtaining federal set-aside contracts reserved for small businesses that his company was ineligible to receive.” The settlements resulted from a Qui Tam lawsuit brought by whistleblowers. Two of the alleged affiliate businesses — Karda Systems and SEK Solutions — were named in a related case in which Ron Villanueva, a former state lawmaker from Virginia Beach, pleaded guilty to federal charges that he conspired to defraud the United States. Villanueva admitted that he and a friend pretended both companies were run by people who qualified for particular grants and drafted a misleading letter to the SBA that mischaracterized the degree to which one firm relied on other suppliers. ADS briefly lost its small business designation as a result of those allegations when a Defense Department contracting officer, concerned by ADS's settlement, requested a formal SBA review of the company's size status and its degree of affiliation with other companies named in the whistleblower lawsuit, according to documents obtained by The Washington Post. That SBA review determined that ADS was “other than small,” which temporarily blocked the company from bidding on set-aside contracts. But ADS successfully appealed that ruling, which was reversed because it relied on old financial records. Today the company continues to receive federal contracts designated for small firms. Because the settlements arrived at by ADS and Hillier did not include a determination of liability, the company has been allowed to keep benefiting from the SBA's various small business programs. Its most recent size determination, which found it to be a small business, was finalized in November 2019. https://www.washingtonpost.com/business/2020/08/03/defense-contractor-with-billions-sales-got-millions-pandemic-loans-intended-small-businesses

  • £150m military bridge contract to transform UK Army bridges and safeguard jobs
  • Lockheed Martin-Built AEHF-5 Protected Communications Satellite Now in Transfer Orbit

    August 8, 2019 | International, Aerospace

    Lockheed Martin-Built AEHF-5 Protected Communications Satellite Now in Transfer Orbit

    The Lockheed Martin (NYSE:LMT)-built AEHF-5 satellite is now responding to the squadron's commands as planned. The squadron began "flying" the satellite shortly after it separated from its United Launch Alliance Atlas V 551 rocket approximately 5 hours and 40 minutes after the rocket's successful 6:13 a.m. ET liftoff. AEHF-5 complete a geostationary ring of five satellites delivering global coverage for survivable, highly secure and protected communications for strategic command and tactical warfighters operating on ground, sea and air platforms. Besides U.S. forces, AEHF also serves international partners including Canada, the Netherlands and the United Kingdom. "This fifth satellite adds an additional layer of flexibility for critical strategic and tactical protected communications serving the warfighter. This added resilience to the existing constellation will help ensure warfighters can connect globally to communicate and transmit data at all times," said Mike Cacheiro, vice president for Protected Communications at Lockheed Martin Space. "In the weeks ahead, AEHF-5 will move towards its operational orbit, deploy all of its solar arrays and antennas, and turn on its powerful communications payload for a rigorous testing phase prior to hand over to the Air Force." AEHF-5, with its advanced Extended Data Rate (XDR) waveform technology, adds to the constellation's high-bandwidth network. One AEHF satellite provides greater total capacity than the entire legacy five-satellite Milstar communications constellation. "Individual data rates increase five-fold compared to Milstar, permitting transmission of tactical military communications, such as real-time video, battlefield maps and targeting data," said Cacheiro. "AEHF affords national leaders anti-jam, always-on connectivity during all levels of conflict and enables both strategic and tactical users to communicate globally across a high-speed network that delivers protected communications in any environment." Lockheed Martin designed, processed and manufactured all five on-orbit AEHF satellites at its advanced satellite manufacturing facility in Sunnyvale, California. The next AEHF satellite, AEHF-6, is currently in full production in Silicon Valley and is expected to launch in 2020. The AEHF team includes the U.S. Air Force Military Satellite Communications Systems Directorate at the Space and Missile Systems Center, Los Angeles Air Force Base, Calif. Lockheed Martin Space, Sunnyvale, Calif., is the AEHF prime contractor, space and ground segments provider as well as system integrator, with Northrop Grumman Aerospace Systems, Redondo Beach, Calif., as the payload provider. For additional information, visit our website: http://www.lockheedmartin.com/aehf

All news