National Audit Office report blames delay on ‘production problems' at BAE Systems

Australia's Defence Materiel Organisation (DMO) has reduced the value of payments to BAE Systems by A$8.7 million ($6.6 million) for late deliveries on its Hawk 127 lead-in fighter trainer programme. Additional "payments in kind" of free deliverables, worth A$4.2 million, have also been obtained as liquidated damages.

A report by Australia's National Audit Office says the main trigger for invoking the claims was a six-month delay in delivery of the first 11 Hawks in October 2000 caused by "problems associated with aircraft production". The Royal Australian Air Force has acquired 33 Hawk 127s under a June 1997 contract worth A$850 million.

The report attributes the delayed availability of the Hawk's radar simulation and emulation systems to a "shortfall in the aircraft's mission system capacity" and says BAE is working on "an agreed alternative to the contracted design". It also notes "selection of the alternative design was influenced by the DMO's inability to provide contracted government-furnished equipment" and criticises the DMO for failing to provide "suitable on-site defence representation".

BAE Systems Australia earlier this year confirmed that the Hawk 127's radar simulation and emulation systems would be delivered by early 2006, but said no penalty payments had been incurred (Flight International, 22-28 March).

The audit office report also reveals Tenix Defence Systems subsidiary RLM Systems is required to pay "in kind" liquidated damages of A$8.8 million for late deliveries on the Jindalee Operational Radar Network project.


Source: Flight International