kiwipatriot69
Active Member
Three yrs before Hercs start being retired isnt much of a time frame to work with Ngati, when are we expecting an RFI to be done for airlift replacement?
Royal New Zealand Air Force
- Thread starter Lucasnz
- Start date
John Newman
The Bunker Group
RegR and kiwipatriot69,
I can see both sides of the coin/argument from both of you.
Yes far more capable, modern, airframes can give you both greater capability and availability (possibly equal or greater), but yes of course the total number (minimum number) is also an issue too, obviously there has to be a 'balance' between both ends.
A couple of examples with the RAAF's procurement/operation of the C-17A Fleet.
Originally four (4) procured, and I do remember reports at the time that suggested that the Oz Government said if the RAAF wanted more airframes it could (all pre GFC days when there was plenty of 'cash' floating around!), true or not, I don't know?
Anyway, couple of interesting moments in the history of C-17A in RAAF service (well I think so anyway!).
When the RAAF responded to the Japanese Tsunami, at one stage three of the four airframes were based in Japan, and the fourth (from what I've read) was back in Oz, but in maintenance, which basically meant that if there was a local need (emergency?), one of those three in Japan would have had to come home, maybe that got 'the powers that be' thinking about increasing the fleet size, who knows?
The next event was when the 'first' of the four was coming due to return to Boeing for a six month 'heavy' maintenance period, basically this would have meant that the RAAF would have been down to 'three' airframes in Oz for approx. two years (eg 1 airframe away for 6mths at a time, 4 x 6mths equals two years).
And if I remember correctly, new airframe No 5 arrived in Oz just prior to airframe No 1 headed off to the US for its heavy maintenance period and that solved that problem.
And subsequently the RAAF also saw the arrival of Nos 6, 7 and 8, all good!!
My point?
What ever airframe the NZG eventually chooses, I would think that its not just how much more capable that airframe is over the one being replaced, but both numbers and also schedule heavy maintenance periods (as per the C-17A six month heavy maintenance period).
Anyway, just my opinion of course!!!
Cheers
I can see both sides of the coin/argument from both of you.
Yes far more capable, modern, airframes can give you both greater capability and availability (possibly equal or greater), but yes of course the total number (minimum number) is also an issue too, obviously there has to be a 'balance' between both ends.
A couple of examples with the RAAF's procurement/operation of the C-17A Fleet.
Originally four (4) procured, and I do remember reports at the time that suggested that the Oz Government said if the RAAF wanted more airframes it could (all pre GFC days when there was plenty of 'cash' floating around!), true or not, I don't know?
Anyway, couple of interesting moments in the history of C-17A in RAAF service (well I think so anyway!).
When the RAAF responded to the Japanese Tsunami, at one stage three of the four airframes were based in Japan, and the fourth (from what I've read) was back in Oz, but in maintenance, which basically meant that if there was a local need (emergency?), one of those three in Japan would have had to come home, maybe that got 'the powers that be' thinking about increasing the fleet size, who knows?
The next event was when the 'first' of the four was coming due to return to Boeing for a six month 'heavy' maintenance period, basically this would have meant that the RAAF would have been down to 'three' airframes in Oz for approx. two years (eg 1 airframe away for 6mths at a time, 4 x 6mths equals two years).
And if I remember correctly, new airframe No 5 arrived in Oz just prior to airframe No 1 headed off to the US for its heavy maintenance period and that solved that problem.
And subsequently the RAAF also saw the arrival of Nos 6, 7 and 8, all good!!
My point?
What ever airframe the NZG eventually chooses, I would think that its not just how much more capable that airframe is over the one being replaced, but both numbers and also schedule heavy maintenance periods (as per the C-17A six month heavy maintenance period).
Anyway, just my opinion of course!!!
Cheers
The RFI for both the FAMC and FASC were out last year and both are now closed. So now the MOD and NZDF will be digesting and analysing the responses before sending a submission to the Minister and Cabinet requesting permission to issue a RFT for the C130 replacement.
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Availability all comes down to forward thinking, planning, accountability, contingency and indeed task selection, an artform in itself but an everyday occurence for a small force(s) such as ours. Bar a fleetwide upgrade project having 4+ aircraft unavailable at anyone time from a single type means we have major fleet issues rather than numbers so chances are one or two more frames is maybe not nesscessarily the soloution anyway otherwise alot of our other capabilities would actually be dead in the water for the majority of the time anyway ie boeings, frigates, support ships etc but again all comes down to planning. If we could send say 1 A400 to a HADR op vs 2 C130 or 2 rather than 3 and acheive the same tempo then are we really disadvantaged by being 1 frame down?
Don't get me wrong I would love to see 1 for 1 numbers wise on something like A400 as that would actually not be like for like but in fact a marked improvement overall but the cost is what will finally dictate numbers. The optimist hopes for 5 but there's another adviser that sits on my other shoulder as well who is not so confident going off our govts history. Realistically we should be getting 5 A400 anyway as it was identified a number of years ago that in fact 8 C130s were needed to cover all tasks, we sodiered on with 5 Hs despite this, this is why I have trust issues.
Just like the possible P8 option I just think numbers will be adjusted (dependant on selected type of course) due to perceived capability increase and more importantly actual cost but also just like that I still think a 2nd lower tier such as C295 would beter fill the void rather than just another single option of the same as this deficiancy (among others) has already been identified with our current fleet(s). For example even a half empty C130 doing a "short" freight/pax run for army between Linton and Burnham is a inefficient use of resources but regularly needs to be done for both ex and realtime tasks. This is unavoidable at times here, regionally and internationally despite all the best planning, timings and factors involved.
Yes agreed, which is why I said numbers is an important consideration in its own right and ironically why I was against us aqquireing 1even 2 C17, more problematic than anything taking into account ops, training, maintanence, upgrades etc.
Australia is lucky in the fact you have multiple fleet types of transport AC as it gives you options, cover and redundancy anyway. To put in perspective I highly doubt we would send or even be able to send 4 of our 5 C130s to something such as Japan like how you sent 3 of your 4 C17. That would be quite a big commitment for us anyway even if we had the extra frame regardless.
I would love to see our numbers stay status quo (at least) and in fact will depending on what type we finally select I just think for the likes of A400 type and most definately C17 maybe not. Hopefull just not confident.
kiwipatriot69
Active Member
Ngati, How long can it take from an RFI to a tender being made regarding the hercules, seeing you have stated the RFI part was done last yr,are we talking several months, or a year or so usually?
There have been reports that the RFT/RFP is due to be released in the second half of this year, possibly in the 3rd quarter. However, timeframe wise generally it all depends on the level and complexity of the information generated by the RFI. Nevertheless, these two steps are only just the beginning as what follows is a formal 3 stage Business Case process. The Indicative (IBC), then Detailed (DBC) and finally the Project Implementation Business Case (PIBC).
The RFI is the first formal approach to suppliers by the purchaser stating essentially - this is what we are after - what can you 'offer' us as a solution to that prescription. The RFT/RFP process is where they drill down into greater detail. A supplier who gotten through to where a couple of preferred suppliers are selected has by that stage invested considerable millions in the process. By the Business Case stage some of the potential suppliers may chose to drop out or find that they are eventually excluded from further consideration. After that it goes to Cabinet. I should note that in the last few brief years via T-6C, SeaSprite, Army trucks, and the new Endeavour replacement projects - this capability definition and selection system has been far more robust than in the past and using an evidenced based approach has proven that solid decisions have been made - even at the cabinet level.
I wish I had the numbers to hand but I'm a rush & haven't got time to start mining... when the MUH (Huey replacement) project was in the planning stage the budget was set at something close to $200M lower than the final contract price of $771M for the NH90... and that was Labour! So yes there definitely seems there is/was scope to be flexible (or perhaps we should say realistic!?!)
It got the better of me, found it! See this link, page 29 - point 6.10:
http://www.nzdf.mil.nz/downloads/pdf/public-docs/deflongtermdevplan.pdf
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all tender evaluations take into account currency fluctuations. I assume NZ Treasury like everyone else has an algorithm they refer to to make the whole of life calculationskiwipatriot69 said:
in addition, NZ like Oz factors in contingency which can be up to half the total final through life costs
Surely, if the contract calculation is a real thing, the contingency should be taken up to a variable degree on average 50% of contracts, and given back to a variable degree in the other 50% of contracts.
Is that what happens in real life?
Or are contracts prices nearly always deliberately underestimated to get the item in train, then the "contingency" used up.
the contingency is meant to allow for volatile changes - so an erratic shift outside of normal exchange rates, an unforeseen licensing issue, an allowance for changes in integration into broader service systems. its a safety buffer meant to protect the project from having to go back to the govt for more money in the life of the platform.
programs are rarely deliberately understated so as to get across the line - its ultimately a career limiting move if you're the one who makes the govts life uncomfortable.
contingency is higher for major fleet acquisitions. smaller programs can be 20%. larger ones are up to 50%
I'd add that contingency triggers other checks and alerts as its a protected bucket of money - to use contingency funds you are obliged to alert a whole raft of oversight and external entities so as to ensure that projects are not taking the easiest way out and just raiding the piggy bank to cover up bad accounting or bad planning
the killer dollar muncher in most complex projects is integration - it rarely goes to plan and causes the most grief in project blow outs.
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The UK package would need to be viewed with caution, as they have been part of the financing consortium and I therefore would assume that the package would not include any development recovery costs, which could apply to non consortium customers.
What? And defy EU transactional accounting rules for inter-governmental contracts. I would assume they would do no such thing.
kiwipatriot69
Active Member
Yes but Britain succeeded from the EU with BREXIT, would those rules still apply?
The UK has not ceded from the EU yet and they will very likely adopt the same accountancy reporting regulations that apply to contractual arrangements between states and commercial entities engaging in contractual arrangements between or on behalf of states, but under UK law when the Brexit is formally completed.
The point is the UK is not cooking the books with respect to its A400M contract relationships, the payments of, and the reporting of such payments and contracts. To suggest otherwise is tinfoiled hat stuff.
They were applicable at the time of the contracting and are applicable at the moment. The UK has not yet left the EU, although it is in the process thereof, hence EU rules and regulations still apply until the BREXIT Agreement between the EU and the UK enters into force. Such an agreement has yet to be negotiated. The UK package figures should be used as a guide, not as something carved in stone, because the NZG will negotiate its own deal. However the UK package data are, like the French figures, quantative data with a high degree of reliability.
As the consortium members have already paid their portion of the development costs this would not be included in the individual aircraft contracts as such, as contracted with Airbus. The individual governments would, in all probability have these costs in the overall package costs of the aircraft in their individual defence budgets. As a normal business practice the consortium and Airbus would try to recover some of these cost from overseas sales and this has been publicly stated several times.
And those development costs have been transferred over to the final costed price - irrespective of the purchaser there is no slight of hand and the costed figures are very accurate because transactional accounting rules are followed. That is why consortium nations got antsy when they had to increase their investor dispersions into the project - it increased their ticket prices. Those costs are not recovered by pinging foreign buyers - in fact foreign buyers are welcome in that they reduce production costs. There are clear transactional demarcations with respect to financial transactions whether one is wearing an investor hat, a supplier hat or a buyer hat, even tough the principal entity may have a finger directly or indirectly in each of those phases. It is there to stop financial corruption and be transparent.
Totally agree that there is no slight of hand and individual governments will be accounting for the development cost in their various budgets as per normal accounting practices, but this money was spent many years ago and would have been in the budgets for those years. The current expenditure is for the manufacture of the aircraft by Airbus. You are right that the total program costs will reflect the total per aircraft cost.
Those deep investment policy aspects such as building and maintaining an industrial base - for reasons not entirely to do with defence projects directly but for economic or political development. Those 'investments/costs' come out from another pot and are innoculated or recovered elsewhere - increased taxation, business activity et al.