The Australian National Audit Office, (ANAO) has handed down a report on the ADF’s troubled Project LAND 200 battle management system (BMS) and tactical communications program.

The $3 billion LAND 200 program was commenced 2005 but did not begin being fielded until 2013, and is comprised of three major tranches. The completed Tranche 1 effort successfully integrated new software, computers and tactical radios with about 2,000 vehicles including armoured vehicles, Tiger armed reconnaissance helicopters (ARH), and RAN landing craft, as well as with dismounted soldiers.

Tranche 2 commenced in September 2017 and will provide portable tablets, an enhanced BMS simulated software program to provide situational awareness data for training, technology insertions to provide faster target and enemy action data and greater networking between platforms, and enhanced Tranche 1 battle management software to provide greater planning requirements and cyber security.

Tranche 3 was due to achieve a Gate 0 milestone in 2018, and will provide a further technology refresh, complete the tactical communications network, and complete the integration of the BMS into combat platforms and remote weapon stations.

The enhanced BMS is being supplied by Elbit Systems of Australia, while Harris Communications Australia will deliver the tactical communications network and encrypted radios.

The audit was initiated after a two year delay in the delivery of Tranche 1 and an associate escalation in program costs. The ANAO report says, “The objective of the audit was to assess the effectiveness and value for money of Defence’s acquisition of a Battle Management System and a Tactical Communications Network through LAND 200 Tranche 2 Work Packages B–D.

“To form a conclusion against the audit objective, the ANAO adopted the following high-level criteria: Defence conducted effective and value-for-money acquisition processes. Defence established effective project governance and contracting arrangements.”

The ANAO found that Defence did not “conduct fully effective acquisition processes for LAND 200 Tranche 2 Work Packages B–D, but may ultimately achieve value-for-money outcomes if the contracted quality and quantity of goods and services are delivered according to the agreed schedule and successfully integrated by Defence.”

It also found it failed to establish “an appropriate review framework for the acquisition projects, but its effectiveness was undermined by a failure of governance.” It said there was “inadequate requirements definition and poor coordination between the two responsible project offices,” which “contributed to an ineffective 2015 procurement for the Army’s Tactical Communications Network, which required a lengthy post-tender refinement process to bring the acquisition within the approved budget.”

On the positive side, it said the decision to in 2015 to go with a sole-source procure process for the BMS “was ultimately effective”, but added that “procurement was delayed pending resolution of affordability issues affecting LAND 200 Tranche 2 as a whole.”

It attributed many of the problems the program has experienced to Defence not establishing “fully effective project governance arrangements.”

It said, “Defence established an appropriate review framework, with successive reviews identifying project coordination risks from 2013,” but that “Defence management’s failure to implement the recommendations of these reviews until 2017 constitutes a failure of governance that negatively affected the 2015 tender outcomes.”

The report’s conclusion noted that, “the difficulties encountered in LAND 200 Tranche 2 stem in large measure from one project office’s release of a Request for Tender with a scope that exceeded the approved cost and did not fully assess the budget consequences or governance and coordination arrangements at a program level.

“The desired outcome shifted from the procurement of radios to the procurement of a complex digital communications solution, as Army developed its understanding of how it would operate in a digital environment.”

In closing, the report made the following recommendation. “That Defence assess whether it has the capability to adequately perform the role of Prime Systems Integrator, and provide assurance on this matter to the Capability Manager, Chief of Army,” and that the department agrees with the recommendation.