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Land 400 tender: SA fights for $10 billion defence contract

03/09/2015

About 10 contractors are expected to compete for the A$10 billion contract to make up to 700 armored vehicles to replace the Australian Army’s ASLAV 8x8 combat vehicle. The first batch of 225 vehicles has now been put to tender.

SOUTH Australia is in the midst of a crucial four-month bid for one of the country’s most lucrative defence contracts.

The battle between global defence companies fighting for the $10 billion job to make up to 700 new armoured vehicles for the Australian Army has begun.

“This is it,” Defence Teaming Centre chief executive officer Chris Burns says. “It’s absolutely critical — if a partnering doesn’t happen with the tenderers, South Australia will miss out on another opportunity.”

 

Defence Minister Kevin Andrews recently announced that work on the first 225 combat reconnaissance vehicles for the Land 400 project was open for tender.

 

Of the 10 or so companies expected to bid in the next four months, there will only be two or three left standing at the year’s end.

 

Ministers and Defence SA staff have spent the past four years travelling the globe to meet the contenders, spruiking the state’s advantages and promising to build a dedicated land combat precinct if they consider channelling work to the state.

 

 

The odds of winning. There is some promise. Three of the strongest contenders, BAE Systems, General Dynamics and potentially Rheinmetall MAN Military Vehicles, all have a presence in SA. BAE Systems, whose Australian headquarters are in Adelaide, has teamed with Finnish company Patria to put forward the Patria 8x8 Armoured Modular Vehicle. And BAE’s Land and Integrated Systems director Graeme Bent says they will “seek Australian manufacturing and supply chain involvement”.

“Patria AMV is a very capable and battle-proven vehicle, which has been selected by seven nations,” he says.

 

“Our primary objective is to establish the in-country capability to sustain the Australian Patria AMV fleet throughout its service life.”

 

He says the vehicle has been successfully manufactured in countries outside of Finland and “has a strong track record of technology transfer to user nations”.

 

“This demonstrates that given the right economic conditions, the design of the platform allows for cost-effective, localised manufacture,” Mr Bent said.

 

And Mr Bent also pointed to a solid track record of BAE working in SA.

 

“We have previously delivered more than 1200 military and other protected vehicles from our SA facilities, and last year procured $650 million worth of work from 2000 suppliers.”

 

But there’s fierce competition

Queensland is interested in snaffling work and Geelong in Victoria has launched a high-profile campaign to lure bidders, holding public meetings, lobbying primes and winning $5 million in Victorian government support for a dedicated defence procurement office.

 

Flamboyant Geelong Mayor Darryn Lyons has claimed his city is best placed to deliver the combat vehicles saying its closing Ford and Alcoa sites were prime spots for advanced manufacturing.

 

When Defence Minister Kevin Andrews announced the tender for the off-the-shelf vehicles was open last week, he was in Victoria with MP Sarah Henderson at his shoulder, claiming she would “fight tooth and nail” to support Geelong and Corangamite’s bid.

 

This week Avalon Airshow is happening near Geelong, and all the major defence primes are there.

 

So too is South Australia’s Defence Industries Minister Martin Hamilton-Smith, busy meeting all the Land 400 contenders.

 

“It’s huge for advanced manufacturing and an opportunity in combat vehicles and combat systems integration,” Mr Hamilton-Smith says.

 

“We have talked to all consortia.”

 

He believes the right Land 400 deal could secure 30 years of advanced manufacturing and sustainment work for South Australians with the acquisition phase alone valued at more than $10 billion.

 

“Having built more armoured fighting vehicles than any other state in Australia, we have the track record, skills and supply chain,” Mr Hamilton-Smith says.

 

“It has the potential to create hundreds and hundreds of jobs.”

 

But he says the potential is hampered by the Federal Government failing to make tenderers promise that a set amount of work would be completed in Australia.

 

Instead, Mr Andrews chose to say they “will be asked to look at how than can maximise local industry content”.

 

“So we don’t know when they make the decision whether it will simply be about parking and putting numberplates on at the dock or whether it will be helping assemble or whether it will be assembling and manufacturing some of the componentry here,” Mr Hamilton-Smith said.

 

Whatever it involves, the companies chosen for the final round must make a serious commitment to the job.

 

Each is required to produce two vehicles, worth about $10 million each, so they can be driven, tested — and even blown up — by the army.

 

The state’s defence team says it must be intricately linked to the process.

 

“We want to be the location for the consolidation of those vehicles,” Mr Burns said.

 

LAND 400 Phase II

Federal Defence Minister Kevin Andrews has opened the tender for the multi-billion dollar project to replace the Australian Defence Force’s Australian Light Armoured Vehicle (ASLAV) with 225 Combat Reconnaissance Vehicles.

 

Companies have four months to bid, and a short list of two to three companies was expected by the end of 2015.

 

The Combat Reconnaissance Vehicles will replace the existing fleet of Australian Light Armoured Vehicles, manufactured and supported by General Dynamics Land Systems in South Australia.

 

This would be followed by Infantry Fighting Vehicles to replace the M113 Armoured Personnel Carriers, also produced locally by BAE Systems Australia, and Manoeuvre Support Vehicles.

 

SOUTH AUSTRALIA’S ASSETS

M113 armoured personnel carrier and Australian Light Armoured Vehicles programs were managed from SA

Users of up to a third of the Land 400 vehicles are based in Edinburgh.

SA’s Cultana Training Area is Australia’s top venue for Land 400 manoeuvres

State Government has promised to fund a dedicated land combat system precinct.

 

(Source: The Adelaide Advertiser; published 09.03.2015)

Date: 
03/09/2015
Companies & Organizations: General Dynamics Land Systems
Defense Products & Services Sectors: 

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