BAE Systems Australia Quarterly Update
AUSTRALIAN INDUSTRY CAPABILITY (AIC) SME ENGAGEMENT
Hunter Class Frigate Program
Q2 2022
Hunter Class Frigate Program – Australian Industry Capability (AIC) Overview
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AIC / CNS Objectives
Achieve an Australian defence industry that has the capability, posture and resilience to help meet Australia’s defence needs, while being internationally competitive and innovative through the establishment of:
- Modern, innovative and secure naval shipbuilding and sustainment infrastructure
- A highly capable, productive and skilled naval shipbuilding and sustainment workforce
- A motivated, cost-competitive and sustainable Australian industrial base underpinned initially by experienced international ship designers and builders who transfer these attributes to Australian industry; and
- A national approach to delivering the Naval Shipbuilding Plan.
Hunter class frigate program update
Additional information
- The Hunter class frigates are based on the Type 26 reference ship design, currently under construction in the UK. Hunter has common “float and move” elements that meet the exact and strict specifications necessary for an anti-submarine warfare platform (noise, vibration, acoustics). Currently Australia does not produce those major systems and equipment to the required specifications.
- BAE Systems Australia is working with Original Equipment Manufacturers and Australian industry to develop business cases that maximise AIC and involvement.
- AIC isn’t just a dollar amount or contract value and is not simply about buying Australian products or using Australian services: it is the development and growth of Australian sovereign industrial capability.
- Across all of our programs, BAE Systems is undertaking other activities that will support the development of Australian industry capability including the transfer of knowledge, intellectual property and technology, developing the physical and digital infrastructure, investing in R&T and developing our workforce.
- Request for Proposals (RFP’s) for Prototyping and First of Class have been, and continue to be, issued in accordance with program schedule.
- In an effort to maximise AIC, BAE Systems Australia has established ‘Targeted Tasks’, which provide an understanding of where and how Australian businesses might contribute AIC into OEMs and their associated AIC plans.
- To maximise Australian industry participation, market testing is to be demonstrated via the use of the Industry Capability Network (ICN) Gateway, and OEMs are encouraged to evidence Australian market testing via the use of the Hunter program ICN Gateway page.
- More than 1700 suppliers from across Australia have registered through the ICN to supply into the program.
AIC considerations
- Upkeep – At a minimum, an OEM’s equipment or system should be supported from Australia rather than Europe or the US once the ships are accepted and using the build process wherever possible to support knowledge and technology transfer
- Upgrade – Capability transfer that allows the OEM’s equipment or system to be changed or modified in Australia during life of the ship
- Continuous Naval Shipbuilding – That there shall be knowledge transfer so that for future programs the equipment might be designed and built in Australia. This might include design support activities such as systems safety and quality
- Max – That Australian content of the product is maximised in a cost-effective manner. Where there is capability already in Australia, it should be utilised where cost-effective to do so
- Value for Money (VfM) – AIC solutions must represent Value for Money across the ship’s Life Cycle, aligned to the sovereign industry capability priorities.
- Program – AIC solutions shall not compromise Ship 1 schedule delivery or add undue risk to the program.
- Sustainable – The Australian capability must be sustainable both during and beyond the Hunter program acquisition phase.
Indigenous capability
- Economic development – The development of First Nations people and Indigenous business capability are important factors in Australian Industry Capability.
- New businesses – Committed to creating and developing Indigenous businesses over the life of the Hunter program
- Indigenous Capability Plans – Non-Indigenous OEMs and suppliers are encouraged to assist in uplifting Indigenous capability in the supply chain through procurement, mentoring and engagement
- Indigenous Procurement Policy – We are aligned with our customer, the Commonwealth of Australia, in developing Indigenous capability through procurement
- Indigenous Employment – The Hunter program provides a unique opportunity to engage First Nations Australians in long-term careers in naval shipbuilding, whether this is within BAE Systems Australia or the supply chain.
TARGETED TASKs
- The Targeted Task supports or potentially supports Category A, B or Combat Systems equipment on the HCFP.
- The Targeted Task will provide a clear deliverable in support of the feasibility and assessment of the OEM investment cases where:
- The SME is already in discussion with the OEM; and/ or
- The SME has facilities capable of producing the equipment; and/ or
- The SME has a successful track record (based on BAESMA industry knowledge).
- The Targeted Task presents an opportunity ‘on the surface’ to increase AIC but requires further validation;
- The Targeted Task clarify opportunity specific implications required for HCFP benefit (such as facilities, tooling, certification, security etc.);
- The Targeted Task will have the potential to deliver an AIC/CNS outcome for the specified equipment; and
- The Targeted Task will clarify transfer of technology/knowledge scope including elements such as cost, outputs and/or maximising AIC.
Category Definitions
Category A
- High value, high risk, project-specific equipment; very large and complex systems
- Customer-mandated, program-critical (mini projects), competition-led
- Major equipment, e.g. power and propulsion and complex systems.
Category B
- Medium value, established and medium to low risk equipment
- Complete systems that have been modified for the program, although they remain recognisable as the original equipment or system
- Platform equipment.
Category C
- Catalogue items and commodities, consumables
- Platform supplies (build to print or Commercial-off-the-Shelf (COTS))
- Catalogue equipment or commodity materials which are generally built to print or proprietary, with high volume but low individual value and risk
- Commodities: steel, valves, pumps, electrical systems, pipe materials.
Category D
- On-site subcontracted services that are: program critical, intrinsic linkage to build program, service to the project
- Subcontract services.
Combat Systems
- The system providing the combat and defensive capabilities of a ship including navigation systems, internal and external communications systems, command management and direction systems, various sensor and effector capabilities together with associated computer networks.
OEM Category A&B combat systems Equipment list
LlOYDS CERTIFICATION REQUIREMENTS
- One of the potential constraints of supplying product to OEMs for the HCFP Suppliers is the need for Lloyds certification
- Lloyds Classification is across all products within the ship build (Shipyard production, Welding, fabrication, Machining (roughing and final), Forging, Materials, Etc.)
- Suppliers may require some form of Lloyds certification which may include:
- Works Approval (for manufacturing facility & business, i.e. one off certification)
- Type Approval (may be used for mass production items i.e. valves)
- Component Certification (for all safety critical items – Witnessed by Lloyds throughout the manufacture)
- Lloyds do (generally) accept approval provided by another IACS agency (especially the further down the supply chain we slip)
- For suppliers selected by and OEM or down-selected for Cat C and D supplier ASC Shipbuilding will be undertaking a Supplier review and development program for that will:
- Identify suppliers that will require Lloyds certification
- Assist suppliers achieving the required certification by
- Conducting reviews of suppliers practices against Lloyds requirements
- Providing advise on modifications required
- Support modifications and certification by way of business improvement specialists resources and or financial support where required
HCFP – Supply Chain Security DISP Requirements
What is DISP?
- “DISP” is the Defence Industry Security Program.
- The role of DISP is to provide industry with increased opportunity to work with Defence and provide easier access to Defence security services.
- Companies dealing with Commonwealth of Australia (CoA) information from UNCLASSIFIED to TOP SECRET will be required to hold DISP membership.
What is the requirement for suppliers intending to participate in Hunter Class Frigate Program with BAE Systems Australia?
- Pre contract – DISP Membership is not required, however it is highly recommended that DISP Membership is applied for at the earliest opportunity as the process can take some time.
- In contract – DISP Membership will be required dependant on the level of classification of information and/or assets being held.
How long will DISP Membership application take?
- It is recommended that DISP membership is applied for at the earliest opportunity. Dependant on the level of DISP Membership required, this may affect the time frame of being granted membership e.g. Classification of information/assets.
- The higher the classification of the contract, the longer the application is likely to take.
What is the cost of DISP Membership?
- There is no cost associated with applying for DISP Membership.
- Costs are associated with meeting minimum facility requirements, dependant on the level of classification of the information and/or assets that is intended to be held at the facility. The minimum standards need to be met in accordance with Commonwealth of Australia policy.
- For further guidance or general queries on DISP membership, please visit DISP website or alternatively contact: 1800 333 362 or 1800 Defence
Making Contact with BAE Systems Australia
BAE Systems Australia is continually seeking to connect with Australian & New Zealand industry who want to:
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“We want to connect with youand your supply chain”
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