ISD Definition: ISD is defined as acceptance
of the certificat of design and the performance statement, with
the subsequent delivery of 60 missiles that are fit for purpose.
Original ISD: ***
Current ISD: ***
Variation: +75 months
||Decrease (months) ||Explanation
|Need for project re-definition||12
||Two redefinition phases were required as a result of problems encountered during the collaborative stage of the project.
||Delays caused by difficulties in agreeing the specification with partner nations.
||The need to match expenditure to available resources.
|Realignment of Programme||6||Improve alignment of missile production deliveries with candidate aircraft.
||Missile hardware and software difficulties to be resolved before specification compliance can be achieved.
There are no additional costs as a result of the ISD slippage.
||Second tranche production|
|Estimate of MOD approval||113
||Difference in price uplift between specific indices and the GDP deflator.
||The requirement to carry out Service Evaluation Trials, +£32M. The purchase of buffer connectors providing an interface between the missile and aircraft electronics, +£1M. An Environmental Round to measure the on-board environment of ASRAAM on various aircraft, +£2M. The requirement to carry out various studies required to redefine the project requirement, +£1M. The decision to convert operational missiles to telemetered missiles during production, +£2M.
||60||Reduction in prices achieved as a result of contractual negotiations for the development/production package, -£37M. Reduction in cost following a decision to purchase a cheaper rocket motor, -£9M. Curtailment of the collaborative development programme following withdrawal of our partner nations, -£14M. Additional DERA support for the development/production package, +£8M.
||Delay to milestone payments due to problems with missile seeker, -£2M.
Expenditure to 31 March 1999: £561M
|Current cost of Main Contract||£768M, for development and production
|Cost change since main contract award||+£70M
|Years of peak expenditure: 1999-00 and 2000-01
||Unit Production Cost: £0.2M|
Further expenditure in clear prospect: Nil.
Quantities required: ***
||Difference in annual uplift between specific indices and the GDP deflator
||A reduction in cost following a decision to purchase a cheaper rocket motor.
||Procurement of a second tranche of missiles, +£77M. Decision to produce telemetered missiles during the production phase, +£2M.
||Delay to milestone payments due to problems with the missile seeker, -£2M.
BEYOND VISUAL RANGE AIR TO AIR MISSILE-BVRAAM
A competition is currently under way for a Beyond Visual
Range Air-to-Air Missile BVRAAM, with which to equip Eurofighter.
The invitation to tender requested bids for the full capability
missile, as well as proposals for a staged capability, ie an interim
capability missile with the potential for upgrade. Two companies,
Raytheon Systems Ltd and Matra BAe, submitted bids, which are
currently being assessed. Raytheon submitted proposals for a Future
Medium Range Air-to-Air Missile, FMRAAM, a full capability missile,
and, under the umbrella of a joint UK/US collaboration, the Extended
Range Air-to-Air Missile, ERAAM+, with a defined growth path to
full capability. Matra BAe proposed a full capability missile
known as Meteor. The potential for collaboration is being actively
pursued: Germany, Italy, Spain, Sweden, France and the US have
expressed interest. We expect to announce a decision soon.
1. The requirement is for a medium range air-to-air missile
for the Eurofighter. The current missile, Sky Flash, is unsuitable
both for integration on to, and operation from Eurofighter. Changes
in the operational environment led to the issue of a revised Staff
Requirement in June 1995. It underlined the need for the fighter
to achieve a large "no escape zone" against manoeuvring
targets during beyond visual range air-to-air combat, and to maximise
the number of firing opportunities. The Staff Requirement also
employed the principle of "performance objectives" as
opposed to "essential criteria". This was designed to
prompt bidders to propose innovative solutions and as wide a range
of options as possible.
2. The missile should possess the capability subsequently
to upgrade major missile sub-systems as a result of more cost-effective
technology and evolution of the threat. The Staff Requirement
seeks to encourage the designers to share the risk by matching
and trading the performance requirements to a realisable and affordable
3. Absolute missile numbers have not yet been defined.
Working assumptions and the tender assessments now in progress,
which has included an analysis of likely numbers of missiles required
under each bid, have identified a requirement for between ***.
None of the European potential partner nations apart from the
Italians has yet indicated either a firm requirement or commitment
4. The BVRAAM programme was considered during the Strategic
Defence Review, when the difficulties of achieving the in-service
date were assessed. It was concluded that BVRAAM remained a key
5. The solution to the BVRAAM requirement is intended
to provide the primary air-to-air weapon for Eurofighter. We envisage
that it will provide a key capability in achieving and maintaining
air superiority wherever Eurofighter is deployed.
6. BVRAAM will not specifically replace any other programme.
Rather, it represents a new generation of weapon designed to equip
a new generation of fighter. Its forerunner is Sky Flash, fitted
on the Tornado F3, which is now approaching the end of its operational
7. Tornado F3 and Sky Flash are planned to go out of
service in 2010. The original ISD for BVRAAM was 2005, but this
was subsequently slipped, partly because the technology was insufficiently
mature, to around 2007. During the SDR, the ISD was slipped a
further year, to 2008, again in recognition of technical risk.
The ISD for BVRAAM is defined as the first unit equipped with
72 missiles and associated support equipment.
8. Competition has been maintained throughout the project,
both at prime and sub contractor levels, to ensure best value
for money. Bidders were required to submit firm prices for an
initial five-year period from award of contract and fixed prices
9. Four potential partner nations, Germany, Italy, Spain
and Sweden, agreed in principle in 1995 that the UK BVRAAM specification
broadly met their baseline missile requirements for Eurofighter
and, in the case of Sweden, JAS 39 Gripen. These nations were
invited to assess the bids jointly with the UK, with a view to
agreeing on a common solution. Discussions with these nations
have been conducted on the basis that BVRAAM is a UK-led programme,
with industry responsible for defining work-share based on technical
excellence, manageable risk and best value for money, rather than
any predetermined formula. A European solution is the favoured
option of all the potential partner nations, with varying degrees
of acceptance over an alternative. A Statement of Intent signed
by the UK and potential partner nations outlines these principles
and the intention to explore a co-operative development and production
programme for BVRAAM. In June 1999 France made a request to join
the programme, having identified that the BVRAAM specification
broadly met their missile need for Rafale. Following other partner
nation agreement, France formally joined the programme in July
10. No suitable "off-the-shelf" missile is
available to meet the BVRAAM requirement, although the Advanced
Medium Range Air-to-Air Missile, AMRAAM, remains a possible baseline
option. Other options earlier considered, but deemed not to have
the required performance, were the Matra MICA, the Alenia Aspide
and the British Aerospace Dynamics Active Skyflash.
11. Discussions with the potential partner nations have
been conducted on the basis of a BVRAAM collaborative development
and production contract being placed by the MoD under UK contracting
law. The UK's preferred procurement strategy would be to place
a combined full development and production contract with the selected
bidder, with production options included to cover potential partner
nations who do not wish to commit to production from the outset.
A draft MoU is currently being discussed with the European potential
partner nations. A formula for cost share is being developed which
would be fixed at the start of the development phase.
12. If a collaborative programme offers the best way
forward, an international joint project would probably be established
within the MoD Defence Procurement Agency under a UK project manager.
The cost of partner nations' representatives would be borne by
13. The UK and the potential partner nations have signed
a Statement of Intent, confirming their decision to explore a
co-operative development and production programme. Missile requirements
and ISDs for the other nations have yet to be advised. Both Germany
and Sweden have recently placed contracts to explore technical
risks associated with their national objectives. The results of
these studies have been made available to the UK and the other
potential partner nations.
14. The possibility of an Anglo/US collaborative programme
is offered by Raytheon's ERAAM+ "staged approach" to
the requirement. There could be cost and performance benefits
in sharing the development work. A Statement of Intent was signed
by the UK & US in August 1999 and a possible MoU is under
15. The export potential of BVRAAM is being assessed.
16. Industrial factors will be taken into account in
the assessment of bids.
17. The invitation to tender invited companies to provide
alternative proposals for a staged approach to meeting the requirement.
Bidders were also advised that the MoD was prepared to consider
other innovative proposals, including a PFI arrangement. Their
proposals are now being evaluated.
18. A request for Information was issued in February
1994 to a wide range of national and foreign government agencies,
potential prime contractors and major equipment suppliers. A Cardinal
Points Specification was issued in April 1994. Responses received
by the MOD in late 1994 suggested that a project was technically
feasible and capable of completion within a suitable timescale.
19. An invitation to tender was issued in December 1995
to BAe Dynamics, GEC Marconi, Matra, Daimler Benz, Hughes, Alenia,
Aerospatiale, SAAB and Raytheon. The ITT included a Statement
of Technical Requirement. Bids were received from Matra BAe, ie
the merged BAe Dynamics and Matra, and from Raytheon as prime
contractors. Assessment highlighted areas of major technical risk
in each and it was decided not to award an immediate Development
and Production contract.
20. Contracts for a Project Definition and Risk Reduction
phase were placed with the two bidders in August 1997. Revised
bids to meet the requirement were received in May 1998. Best and
Final Offers (BAFO's) from both companies were received in September
1999. We are hoping to reach a decision soon and to place a demonstration
and manufacture contract around the end of 2000.
21. Future project milestones will depend on the procurement
22. Expenditure up to 31 March 2000 was £21M, VAT
incl at 99/00 prices. Total acquisition costs could be in the
region of *** depending on the solution chosen. The years of peak
expenditure are likely to be 2006-07 and 2010-11.
23. The aim of the BVRAAM Integrated Logistic Support
strategy is to minimise the support costs whilst ensuring that
the required levels of mission reliability and weapons availability
are achieved throughout the design life.
24. The successful BVRAAM contractor would be responsible
for the first five years of logistics support, covering both spares
and Post Design Support work. Contracts after that period would
be subject to negotiation. Contractor logistics support is seen
as the most cost-effective strategy, ensuring a minimum requirement
to hold spares.
25. Provision of initial operator and maintainer training
and the associated training package are likely to be the responsibility
of the successful prime contractor, with future continuation training
being undertaken with RAF resources. A number of training missiles
would be procured.
26. Discussions between the UK and potential partner
nations on support philosophies are at a very early stage. No
estimate has been made of the saving from sharing any future support
and training facilities with other nations.
27. Pending a decision on procurement options, no decisions
have been taken about the total numbers of missiles required or
how they will be allocated.
28. The BVRAAM programme was conceived exclusively for
Eurofighter, where the main carriage method is semi-recessed under
the fuselage. This represents a prime driver in the missile design.
As such, the requirement provides only for integration on Eurofighter.
BVRAAM will therefore be interoperable with other Eurofighter
nations who undertake the integration. The four-nation programme
also requires integration work to be carried out for AMRAAM.
29. BVRAAM has required 25-year design life.
30. The intention is to incorporate major capability
and cost-effectiveness enhancements, not through major in-service
upgrades but in accordance with Smart Procurement principles,
through incremental acquisition and insertion, as technology allows
and the threat evolves.
LESSONS LEARNED FROM PROJECT HORIZON
1. The decision on 25 April 1999 by the Defence Secretaries
of UK, France and Italy not to proceed with the tri-national HORIZON
programme after the end of its current Project Definition phase
(which expired in October 1999), marked the end of a long chapter
on attempted collaboration in naval shipbuilding. The reasons
for the failure of HORIZON have since been the subject of analysis
by the tri-national HORIZON Joint Project Office (JPO) and HORIZON
Steering Committee. This short paper synthesises their (and others')
views into a single national "lessons learned" report
which could be used to inform the UK's approach to future potential
2. The most significant issues arising from the UK's
national experience of HORIZON are set out below in the form of
key lessons for the future. The lessons are grouped to distinguish
between things that went well and should be done again, and things
which need to be done better in future. Where a lesson requires
implementation the leads (ie Government; Industry; DPA; Central
MOD Customer) are indicated (in parentheses) after each point.
Good lessons for the Future:
(a) The existence of a combined Operational Requirement
Staff team and an empowered Joint Project office proved a powerful
means of keeping national organisations informed of progress whilst
ensuring that the common purpose of all nations was not diluted;
(DPA; Central Customer).
(b) The JPO organisation and procedures worked well. Future
Joint Project Offices should seek ISO 9001 (or equivalent) qualification
at the outset to give confidence in their efficiency and to encourage
the corresponding industrial organisations to work to the same
(c) It is helpful to keep all companies with a potential
interest in the project regularly informed of progress so they
are ready to participate when called upon to do so and are willing
to invest time and resources in competitions. Formal mechanisms
for keeping in touch at the level of Prime and sub-contractor
level are helpful; (DPA).
(d) The establishment of a joint Acceptance Authority
made up of the three national organisations responsible for acceptance
into operational service of naval warships proved very useful
in establishing a clear definition between acceptance off contract
by the JPO and acceptance into service with the prospect of very
little duplication of effort between the three navies; (Central
Areas to improve:
(e) all collaborative parties should agree the operational
requirement (Staff Requirement) and confirm that it is affordable.
Governments should be prepared to share information on requirement
and budgets at a much earlier stage to avoid over-ambitious performance
specifications being set at the outset which subsequently need
to be adjusted (with consequent delay and disruption) as financial
pressures are brought to bear; (Governments; DPA; Central Customer);
(f) the requirement and (confirmed) budget should be communicated
to Industry at an early stage to avoid nugatory effort and time
being invested in solutions which are over ambitious and/or unaffordable.
Industry should be updated quickly if budgets change; (Governments;
DPA; Central Customer);
(g) Industry must be consulted as to what is likely to
be practical before the MOU is signed. The views of Industry should
be sought on the realism of the operational requirement and the
likely risks, particularly with regard to the ISD, the likely
cost in relation to the budgets that nations can afford, the procurement
strategy and the proposed industrial organisation; (Industry;
DPA; Central Customer);
(h) credible industrial structures must be established
at an early stage which can act authoritatively in the prime contractor
role. Joint venture companies are unlikely to succeed. It would
be difficult to find acceptable solutions for co-operation on
the scale of a complete warship if partner nations nominate shipbuilders
that remain directly operated by Government, unless there was
a credible separation between Industry and Government's distinct
customer/supplier roles; (Industry; Governments);
(i) work share arrangements should not be allowed to distort
industrial management of the programme. The involvement of trans-national
companies and OCCAR should help work share issues to be resolved
efficiently and economically; (Industry, Governments);
(j) there should be a common view of risks in the project
and how to manage them, and technical obstacles to collaboration
such as differing national ship building and safety standards
must be harmonised early in the programme; (Industry; DPA);
(k) a means of securing the benefits from affordability
and risk reduction measures must be found. There must be equality
of information between Industry and customer for pricing and risk
assessment. A system needs to be developed which ensures that
the benefits of risk reduction measures, better definition and
capability reductions are recorded and implemented in subsequent
rounds of costing; (Industry; DPA);
(l) a complex tri-national programme such as Project HORIZON
cannot cope with an ambiguous procurement strategy. The appropriate
strategy must be agreed in detail from the outset. From a UK perspective,
the optimum approach is to place a performance based contract
with a prime contractor who is fully responsible for the selection
of equipments, with the project office monitoring the fairness
of competitions. In the case of HORIZON, nations were not ready
to accept the consequences of this and neither was Industry ready
to deliver. We should not under-estimate the difficulty of achieving
such an arrangement in future programmes; (DPA; Industry);
(m) given the inter-actions and mutual dependencies between
the PAAMS and HORIZON programmes, it would have been better to
have combined these two programmes and to have worked towards
a single industrial entity to deliver the complete CNGF programme.
The boundaries between the two programmes needed careful management
with the risk of overlap and redundancy between the two. One solution
might have been for UK to join the FR/IT Famille des Systems Sol-Air
Futur (FSAF) programme and for the PAAMS common items to be considered
as equipments supplied to HORIZON for integration into the Combat
System. Another solution might have been to set up one project
for the combat system as a whole and another for the platform.
This would have required a totally different PAAMS Programme Office.
Since the first solution was politically unacceptable, the second
might have been more practicable and acceptable to Industry. Closer
to the German-Dutch frigate project, the second solution would
probably have resulted in three different frigates with a more
common combat system; (Governments; DPA; Industry);
(n) significant changes to procurement strategies or project
plans should only be made after the possible adverse effects on
programme schedules and costs have been assessed. Other nations
need to be persuaded of the need to place the same emphasis in
minimising Through Life Cost from the outset; (DPA);
(o) Through Life Costs need to be an important factor in equipment
selection decisions. Data bases should be established very early
on in a project's life to collect Integrated Logistic Support
data particularly that required to conduct the comparative analysis
of through life costs. These are an important but often neglected
aspect in deciding the competition for individual weapon and ship
(p) there must be mutual trust and confidence between
the nations, between the national staffs and procurement organisations
and the international project office and between the project office
and Industry. Without such trust, and the equality of information
that this demands, success cannot be assured. For this reason,
the personnel serving in the key appointments in both Government
and Industry must be chosen carefully and must commit themselves
to the achievement of the aims of the programme, distancing themselves
from purely national interests. (Governments).