Military, Products

Australian Audit Office Slams MRH90 Project

By By Emma Kelly, Australia and Pacific Correspondent | July 29, 2014
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The Australian Government ordered the MRH90 – an Australian variant of the NH90 assembled locally in Brisbane by Australian Aerospace – over the competing Sikorsky S-70M Black Hawk in 2004 and 2006 under Project AIR 9000 Phases 2, 4 and 6. Phase 2 called for a squadron of 12 to provide extra mobility for forces on operations, while Phase 4 and 6 required 28 helicopters to replace the Army’s S-70A-9 Black Hawks and six MRH90s to replace RAN’s Sea Kings. The then Howard Government opted for the MRH90, despite the Department of Defence recommending the cheaper Black Hawk for Phases 2 and 4.

The acquisition was part of the 2002 Helicopter Strategic Master Plan, which was aimed at achieving acquisition and sustainment cost efficiencies by reducing the number of helicopter types in service and increasing Australian industry capability to assemble and maintain the fleet.

But the program has not been a happy one for the Australian Defence Force (ADF), resulting in it being four years behind schedule, with first operational capability milestones for the Army and Navy yet to be achieved. Final operational capability is now not scheduled until April 2019 – 57 months late.



Photo courtesy Department of Defence

By March 2014, Australia had spent more than A$2.4 billion on acquiring and sustaining the MRH90 fleet – 27 of the 47 of which have been delivered (a 47th aircraft was added to the order in May 2013 as part of a negotiated settlement). The ANAO predicts the total cost of acquiring and sustaining the fleet until 2040 will be A$11.7 billion.

The type has encountered various problems, with the latest involving the self-defense gun system, cabin seating and cargo hook, all of which have required redesign due to “significant operational deficiencies.” The report says: “Operation test and evaluation had not validated the ability of the MRH90 aircraft to satisfy any of the 11 operational capability milestones set by the Army and Navy.” Reliability and maintainability have also been poor.

As a result of the problems, Australia suspended acceptance of the aircraft on two occasions (November 2010 and February 2012), undertook diagnostic reviews, listed it as a Project of Concern and negotiated revisions to the acquisition and sustainment contracts. In November 2011, Defence even contemplated options to terminate it.

The ANAO attributes the problems to “primarily a consequence of program development deficiencies and acquisition decisions during the period 2002 to 2006.”  The Department of Defence’s helicopter capabilities requirements definition was inadequate, did not properly inform the source selection process and led to gaps in contract requirements, says the ANAO. Furthermore, Defence did not effectively assess the maturity of the MRH90 and Black Hawk designs to inform the development of contracts, while the contracts did not provide adequate protections for the government.

“Considerable work remains to implement and verify some design changes and to adjust operational tactics, techniques and procedures in order to develop an adequate multi-role helicopter capability,” says the report.

In response, the Department of Defence acknowledges the key lessons learned in project definition and tender evaluation, capability requirements and acceptance and sustainment. “Defence acknowledges that there is scope to realize further improvements in the MRH90 capability and anticipates continued maturity to the sustainment arrangements with associated benefits to cost of ownership,” it adds.

Australian Aerospace Chief Executive Officer Jens Goennemann says that the design has undergone considerable development since it was first introduced into service in Australia and it is “confident that this development will continue, providing greater system reliability and reduced maintenance workload.”

Relating to problems with the troop seats, self-defense gun position and fast roping and rappelling device, Goennemann acknowledges that “it has now become evident that the designs that were created in Europe before the aircraft had seen any operational service were not well focused on the end user requirement.” The manufacturer is confident that the redesigned systems will meet the ADF’s operational requirements.

Australian Aerospace concedes that the flight hour expectations of the Army and Navy have not been met in the type’s initial years of operations as early versions were less reliable than the later PBL3 variant and there was a lack of spares support in the early years, but the mature configuration is capable of meeting the ADF’s flight hour expectations.

Australian Aerospace is confident of the type’s capabilities. “The aircraft is now gaining strong pilot support as a capable and safe aircraft by virtue of its modern avionics and advanced performance and flight characteristics,” says Goennemann, adding that the result will be “a potent battlefield capability.”

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