Three months after signing an agreement with Eurocopter subsidiary Australian Aerospace to resolve long-standing problems with the Australian Defence Force’s (ADF) MRH-90 helicopter program, the Australian government says the onus remains on the company to deliver on schedule. A deed of agreement, signed on Nov. 23, 2011, is intended to resolve delivery delays and multiple technical issues experienced on the A$3.75 billion (US$3.89 billion) project, which is now running two years late.

The Australian government remains as committed to the purchase, but has stepped up the pressure on Australian Aerospace by adding the 46-helicopter buy to its “projects of concern” list, meaning direct ministerial involvement in continuing project management. In extreme cases, projects on the list can be cancelled, as happened with the Royal Australian Navy’s (RAN) purchase of Kaman SH-2G(A) Super Seasprite helicopters in 2008.

Australia’s senior defense minister Stephen Smith announced on November 28 that he had added the MRH-90 project to the watch list because the schedule delays posed a capability gap for the ADF. He said the Australian army is planning to briefly extend the service life for its existing Sikorsky S-70A-9 Blackhawk helicopters as a temporary countermeasure.

The minister also revealed an additional short-term Sikorsky S-70B-2 Seahawk unit is being called up to offset the decommissioning of the navy’s Westland Sea King Mk50A helicopters on December 16 after 35 years of service.

Exhaustive Review

Smith indicated the decision to shift the MRH-90 buy to the watch list had not been taken lightly. “We have worked our way through this very carefully and very methodically, and it’s now been the subject of an exhaustive gate review,” he stated.

The minister acknowledged that most technical problems being experienced by Australia are shared with other customers for the wider NH-90 family. “There are two reasons for…going on the projects of concern list,” Smith said. “One is a series of technical challenges, a small number of which are unique to Australia, but some of which are shared internationally. And second, delays in time.”

Australia tapped Australian Aerospace in August 2004 to provide 12 troop transports for the army with deliveries to be completed in 2008. Actual acquisition contracts were signed in June 2005. Twelve months later the order was expanded to 46 aircraft following government approvals to replace all army Blackhawks and navy Sea Kings. The RAN will operate six aircraft and the army 40, with common service and support split across three bases.

Two lead aircraft, built in France, were handed over to Australia in December 2007, with the first Australian assembled aircraft, tail number 5, delivered in December 2008. The June 2006 expansion of the program envisaged the RAN achieving initial operational capability in 2010 and the Australian army in 2011. A total of 11 aircraft were handed over by May 2010 but in November that year the Defence Materiel Organisation (DMO) stopped accepting deliveries citing prime contractor nonperformance.

Multiple Issues

An engine failure incident in April 2010 resulted in the grounding of the type for three months. Subsequent investigations carried out jointly with engine manufacturer Rolls-Royce Turbomeca found a turbine compressor blade had impacted against the engine casing, which was caused by the turbine spool flexing as it cooled after engine shutdown. The ADF resumed flying operations with the type in July 2010 but the problem is repeatable if insufficient cooling time occurs between flights, meaning restrictions on operational tempo until a permanent solution is realized.

Other identified problems include engine and windscreen tolerance to foreign object damage, stability of the inertial reference system, shortfalls in rear cabin ballistic protection and floor strength, shortfalls in documentation and training systems, and poor spares availability.

A spokesman for Australian Aerospace told AIN on January 19 that on the day the project was placed on the ministerial oversight list the company delivered the 14th helicopter. Aircraft No. 15 was handed over on December 13, and, he said, “Aircraft delivery is back to the agreed schedule.”

But the company, which has long shied away from discussing its corporate performance publicly, has also openly conceded that issues necessitating the deed of agreement include schedule and technical compliance problems.

Similar To Tiger Problems

Australian Aerospace has been down the projects-of-concern path before. The problems facing the MRH-90 buy echo Australia’s Eurocopter Tiger armed reconnaissance helicopter project, for which Australian Aerospace is also the prime contractor. The last of that type was delivered in December, two years and eight months late.

While the Australian army is planning to achieve full operational capability with the Tiger in the second half of 2012, the program history includes 10-month suspension of payments to the prime contractor between June 2007 and April 2008 because of a combination of schedule problems, training system nonavailability and poor through-life support arrangements.

When the Australian government introduced the projects-of-concern concept at the start of 2008, the Tiger was added immediately. Australian Aerospace secured its release via a deed of agreement, signed in April 2008, that rebaselined the entire project schedule. It also required contractor provision of two EC135 helicopters for 24 months to offset aircraft availability shortfalls, and a swap of in-service support arrangements to a performance-based mechanism. Yet when the last aircraft was eventually handed over to the army in December 2011, it was five months late against that rebaselined schedule. The Australian National Audit Office said in its latest annual review of major defense projects that availability of spares for Tiger remains an issue.

The MRH-90 project underwent what the Australian government is calling a “comprehensive independent diagnostic gate review” in April 2011, with Australian Aerospace being directly invited by the defense minister to participate in the process. That review saw an agreement with the company for a new-build baseline for the troop-lift helicopters with existing aircraft to be upgraded to that configuration at the company’s expense. It also saw the minister order another review to be held at the six-month mark to assess performance. Australian Aerospace delivered aircraft Nos. 12 and 13 a few weeks later.

The revised delivery schedule up until the September review had anticipated the RAN achieving initial operational capability in December 2011 and full operational capability in December this year. The army had planned to reach initial operational capability in October this year and full operational capability in July 2014. By the time the second review was held, Smith said the DMO was already seeing new warning signs on progress and recommending the project go onto the ministerial watch list.