On Wednesday Defence Minster Joel Fitzgibbon cancelled the Royal Australian Navy’s purchase of 11 Super Seasprite helicopters.
The long overdue decision brings to an end one of the worst acquisitions in Australian military history. The Super Seasprites were ordered 11 years ago and have so far cost the Australian tax payer upwards of $1.3 billion. Despite being finally delivered last year, they are still grounded due to software and safety concerns, and have never reached operational capacity.
The saga of the Super Seasprites tells us much about why the forward projections for Australian defence acquisitions run past $60 billion, with no less than $23 billion worth of projects at "medium to high" risk of failure, according to Fitzgibbon.
First and foremost, the Seasprite is an old helicopter with a new brain. Brendan Nelson’s quote about "squeezing a modern Holden into the frame of an EH" has been repeated at length by the news media, but if anything it underestimates the difficulty of the task that the Navy had demanded from the Seasprite’s manufacturers, Kaman Aerospace International.
The original Seasprite helicopter was delivered in the 1950s for the US Navy, and operated off its frigates, cruisers and carriers chiefly in an anti-submarine warfare role. In the 1980s, the original design was refitted with new engines and renamed the Super Seasprite. It was not renowned for its reliability or performance. The Super Seasprite was a light helicopter able to operate in a combination of anti-submarine and anti-surface roles, although it has to be said its Penguin anti-ship missile lacks the range and lethality of state-of-the-art Soviet-designed anti-shipping missiles. Still, the Super Seasprite is an important "force multiplier" for the ships it operates off. Or, at least it would have been.
The Navy originally wanted the Super Seasprite because it needed a light helicopter capable of operating off the small mini-frigate (the "offshore patrol combatant") that Australia had hoped to develop with Malaysia in the early 1990s. The Malaysians eventually backed out of that deal, so the Navy decided to keep the Seasprite for the ANZAC frigates that Australia was building with New Zealand. But the ANZAC frigates are bigger ships and can carry the SH-60 / S-70 Sea Hawk helicopter that Australia eventually also purchased. The Sea Hawks are a newer, more durable design and are also capable of mounting the Penguin. In short, Australia never needed the Super Seasprites. We could have simply bought more Sea Hawks.
But, as US legislators have repeatedly found, defence acquisitions are notoriously difficult to kill off. The mind-boggling sums of money involved often lead defence planners and politicians into the "sunk cost fallacy" – in other words, they throw good money after bad.
So the Navy decided to persevere with the Seasprite project. But to make sure they were getting bang for their buck, Defence and the Navy placed some onerous conditions on Kaman Aerospace. Essentially, Kaman would be asked to deliver a brand new helicopter, with state-of-the-art avionics and software. These complex new machines-that-go-ping pushed up the cost of the 11 helicopters to something like $100 million a pop, and posed huge engineering challenges for Kaman. Of particular concern was integrating the Litton Integrated Systems Division Integrated Tactical Avionics System (ITAS) into the old airframe. This is why the Super Seasprite was still not operating off ANZAC frigates in early 2008 after being delivered to the Navy in 2003.
The Super Seasprite had some serious problems. In 2006 the choppers were grounded over safety concerns. According to this ABC report, they had trouble flying at night and over water. That’s an issue in a naval helicopter.
What’s left is an unholy mess. The Navy doesn’t get its helicopters, and the taxpayer is $1.3 billion in the hole. Kaman will no doubt sue the Commonwealth over the cancellation, so you can add massive legal fees and a possible damages payout to the bill.
Who’s to blame? Just about everybody, really. The Navy pushed for an ambitious and ultimately unrealistic project, essentially requesting a brand new helicopter when off-the-shelf models with similar capability were available. Defence completely mismanaged the contract with Kaman, allowing them to miss deadline after deadline with little or no sanction or risk management. And John Howard’s government baulked at cancelling the project when faced with the obvious prospect of failure.
Joel Fitzgibbon deserves high praise indeed for finally having the guts to cancel a defence purchase. He’s going to need plenty more courage in the months and years ahead. Australia is committed to some astonishingly risky defence acquisitions. There are several other upgrades trying to put new software into old platforms, which are also running behind. Most notable of these is the Guided Missile Frigate upgrade, but we’re also refitting things like our old F/A Hornets and the M-113 armoured personnel carrier. Brendan Nelson also controversially committed to the purchase of F/A-18 E/F Super Hornets; this purchase itself is up for review. Then there’s the F-35 Joint Strike Fighter. These planes are brand new, not properly tested, overweight on their specifications and running late.
What about replacement submarines for the Collins-class boats due to be retired in the mid-2020s? These will need to be commissioned and begun in the next few years, and are expected to cost up to $25 billion. Fitzgibbon has also foreshadowed upgrading the Air Warfare Destroyers currently under construction to carry SM-3 missiles capable of ballistic missile defence, which could further complicate what is already a massively complicated project.
All in all, you wouldn’t want to be Stephen Gumley right now. He’s the CEO of the Defence Materiel Organisation, the Government agency responsible for managing these vastly complex acquisition projects. Good luck Stephen. You’re going to need it.
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