Rumour Control - Greg Ferguson - Australian Defence industry news and views Australian defense industry analysis, news, commentary, projects, acquisition programs


Home Page

Australian Defence & Government Links

Australian Defence & Aerospace Media Links

Australian Defence Study & Analysis Centres

Australian Defence Industry Organisations

International Defence & Aerospace Media

Overseas Defence Organisations

Australian & International Business Media

What is "Rumour Control"?

Contact details

For light relief:

The Chaser

Private Eye (for Brits)

The Onion (for Yanks)

Greg Ferguson's Blog

Welcome to Rumour Control's new Blog. This is designed to support a running commentary on defence industry and policy issues. It won’t be updated every day (probably) and it's designed not to become a forum for the passionately expressed views of people who write under pseudonyms. If anybody wants to comment or respond to what I’ve written, go right ahead: I welcome your feedback. But I reserve the right to quote or ignore correspondence as I see fit. You can contact me here:

Sonar for the AWD - 18 August 2008

While my back was turned, Defence announced that Ultra Electronics had been named preferred tenderer to supply the Air Warfare Destroyer sonar suite. Good on them: they’re an innovative company who fought a smart campaign against a very strong Australian incumbent, Thales Underwater Systems.

This is the first major AWD combat system-related contract awarded by the AWD System Centre; you’d have to hope the remainder will follow in quick sucession – the source selection was over three months behind its stated schedule and it wouldn’t help the program if delays in awarding major sub-contracts had a knock-on effect on the project’s master schedule.

It’s hard not to feel sorry for Thales Underwater Systems – once upon a time the company was held up by former defence industry minister Bronwyn Bishop as a shining example to foreign prime contractors seeking work in Australia. As far as I can see the company has done everything right, including investing heavily in local R&D and local manufacturing capabilities (it’s the global sole source for a number of critical items in its parent company’s supply chain) and has exported hundreds of millions of dollars worth of locally-developed and world-leading sonar smarts to defence and petroleum industry customers.

Good luck to Ultra Electronics – they deserve their success, but Thales Underwater Systems has set the bar very high where corporate citizenship is concerned. I hope Defence will continue to ensure that counts in future.



Back again - 17 August 2008

Whoops! Cognitive dissonance strikes again. Just got back from a week in the USA visiting the Commonwealth of Pennsylvania as a guest of its government. Travelled down Route 76 from Philadelphia (home of Boeing Rotorcraft) via York (BAE Systems Ground Systems Division), Harrisburg (state capital – its very striking capitol building wouldn’t have looked out of place in Napoleon’s 19th century Paris), Johnstown (a rather unlikely spot for a defence industry cluster at first glance, but there’s a thriving one here), Pittsburgh (steel city, still trying to shake off peoples’ outdated memories of its former ‘rustbelt’ status – it’s actually a high-tech hotpspot thanks to its two major universities – Pittsburgh and Carnegie-Mellon), and Armstrong County (again, an unlikely place to find a defence industry cluster, but there’s a pretty healthy one here).

There are interesting parallels between Pennsylvania and states such as South Australia – the descent into ‘rustbelt’ status, followed by a dogged battle to re-invent the state and its economy both in real terms and in peoples’ minds: those who don’t bother looking at it closely and, crucially, those who live there.

I’ll be writing more about this trip in ADM in forthcoming editions, but it’s worth putting on the record one strong impression: the Americans believe they are the best at what they do, and they back their own people – defence industry and warfighters alike – to deliver on that promise. They welcome Australia’s custom, but find it hard to believe we don’t support our own industry in the same fashion.


Correction - 8 August 2008

Whoops! Cognitive dissonance strikes again: the CPAF contracting model (see the ‘Boeing, Boeing Gone’ post below) stands for Cost Plus Award Fee… D’Oh!

Thanks Eric!

BTW – I see some 15,000 Chinese army, air force and naval recruits/cadets will be doing the business at the Beijing Olympic Games opening ceremony. That’s more than the authorised manpower of the RAN or RAAF.

Human wave meets Mexican wave?

More Bushmaster Sales - 8 August 2008

The Dutch Army has ordered another 13 Bushmaster Infantry Mobility Vehicles (IMV), with another European Army (believed to be Spain) expressing interest in acquiring some Bushmaster also. The British Army ordered 24 Bushmasters earlier this year; these have disappeared from public view and reports from the UK suggest that the operators have made a number of very interesting specific-to-role modifications and enhancements. As always Whitehall and Thales steadfastly refuse to comment on the British order.

Parliamentary Secretary for Defence Procurement Greg Combet, who announced this third Dutch order (they already have 36 vehicles, ordered in two previous batches), has been on an extended tour of the US, the UK and Europe “promoting Australian defence industry capabilities to our allies.”

“The Bushmaster is currently deployed overseas with the ADF and it has performed remarkably well. Operators of the vehicle have commented to me on both its high level of operational performance and protection level,” Combet commented.

The success of the Bushmaster follows a protracted and unhappy gestation. Despite its critics maintaining there was no real role for such a vehicle, and that the money would have been better spent acquiring more ASLAVs or other combat capability, the Bushmaster concept appears to have been very sound.

The sad thing is that, having conceived the vehicle back in the 1990s, we missed a massive window of opportunity in the early years of this century when the Pentagon started seeking Mine-Resistant Ambush-Protected (MRAP) vehicles for its troops in Iraq and Afghanistan.

It’s very hard to understand why the Bushmaster hasn’t fared better in the US market. Its operational record speaks for itself. It would be the ultimate irony if US troops started ‘borrowing’ Bushmasters from their British allies and discovered for themselves that perhaps they should look a little closer at this Australian ‘gem’.

BTW – I notice the Pentagon’s now looking at a second generation of MRAP – smaller and lighter and more mobile. Not unlike the Bushmaster, in fact. You never know your luck…


Lockheed grows Australian footprint - 7 August 2008

Lockheed Martin has exercised its pre-emptive rights to Tenix’s share in their joint venture company, RLM Systems. That won’t please BAE Systems Australia which has just acquired Tenix’s defence business and was keen to get its hands on this highly capable, though little publicised systems engineering and software house.

RLM will come fully into the fold and be badged as Lockheed Martin Australia, which completely transforms Lockheed Martin’s footprint in this country. Suddenly, from having a relatively small Canberra office as a shop window for its massive technology and industrial base in the US, it directly employs some 350 people in Australia and is a substantial local defence contractor. Watch ADM’s Top 40 listing at the end of this year! ENDS

New defence research initiative - 7 August 2008

The Minister for Defence Scence personnel, Warren Snowdon, announced a new DSTO research program today - .

The three-year, collaborative research program between DSTO and the University of Adelaide will lead to better protection of buildings against bomb attacks. It will evaluate and develop materials and engineering solutions to minimise the effects of terrorist explosions aimed at civilian and military facilities. The other partners in the research program include the construction engineering company VSL Australia and the State University of New York in the USA.

That’s good news, as far as it goes. Although there’s been a fair bit of research already into protecting buildings against various forms of terrorist attack (the UK has been dealing with this threat for four decades), DSTO has some real smarts in this area and there’s always room for more bright ideas.

But how will the results of this research program be used? Undoubtedly, they will help Defence and the Commonwealth government specify materials, design features, construction standards and other factors which contribute to a particular level of protection. That’s good.

What if the research leads to the development of particular technologies or design techniques which can then be commercialised by engineering and construction companies? How will that Intellectual Property be handled? And if an Australian construction or engineering firm picks it up what are its chances of selling the technology to Defence?

DSTO carries out quality research to support its advisory function; but when Defence acquires capability in the form of equipment, services or infrastructure it does so on a commercial basis: it doesn’t buy that capability from DSTO, but from a contractor.

The big challenge here, besides actually doing some good research, is to make sure that when Defence is ready to spend Australian taxpayers’ dollars, the best value for money is offered by somebody who’s commercialised DSTO’s research. This would put money back into DSTO, through licensing fees or royalties, and the Australian economy, through local jobs.

You can bet your bottom dollar the US collaborators will be looking to commercialise the IP to which they have any rights. The US university and research sectors, and US industry generally, are more willing to exploit bright ideas and turn a buck; Australia seems to lack the willingness to back its own ‘smarts’ – and there are plenty of people who’d argue, from bitter experience, that Defence would do almost anything rather buy an Australian-developed technology or product.

In his announcement about the research program Warren Snowdon said he welcomed the growing collaboration between DSTO, industry and the university sector.

“The blast protection program for buildings is another example of a strong research relationship that contributes jointly to the national interest. There is considerable scope for such collaboration and I look forward to Australian universities working closely with DSTO on innovative solutions to enhance defence capability.”

Amen – and let’s hope Australians can turn an honest dollar in doing so.


Boeing, Boeing, Gone - 4 August 2008

The departure of former Boeing Australia Ltd managing director David Withers was not surprising, in hindsight, though there seems to have been little warning before the axe fell.

Boeing Australia Ltd hasn’t made itself too many friends in Canberra in recent years: it is prime contractor on a number of projects which have run into difficulties of one kind or another, and its parent is wearing the blame for a three-year delay in one of the ADF’s most important Network Centric Warfare-related projects, Wedgetail.

However, Boeing’s troubles haven’t prevented the company from winning two major projects in the meantime: it has delivered four C-17s on time and on budget and is on track to achieve the same with the 24 Super Hornets ordered by former defence minister Dr Brendan Nelson last year. And depending on the outcome of the Air Combat Capability Review Boeing may also end up supplying a small force of EA-18G Growler electronic attack aircraft as well.

This goes to show that Boeing knows how to build good equipment – as a company executive once remarked to me, “We do the hard stuff.” But it hasn’t been able to live up to its promise here in Australia.

It has to be pointed out also that plenty of other local companies have also stumbled badly in major indigenous developmental and systems integration projects – Telstra with JORN, Thales with the FFG Upgrade and BAE Systems with the Wedgetail EW suite, for example. And quite a few large overseas companies haven’t done so well, either: look at the Super Seasprite, the original Collins combat system and the C-130J Hercules.

What do all the projects mentioned so far have in common? They are all developmental projects. And they were all ordered under fixed-price contracts. This has been proven to be a mistake.

The Kinnaird process could address many of the problems with this procurement model by ensuring enough money is spent up-front mitigating the development risk. If it’s implemented properly this could actually demonstrate some of the features of the US ‘contract plus award fee’ (CPAF) model, which a number of Australian defence industry executives favour. CPAF contracts generally include an estimated cost; an award fee; a performance incentive, when appropriate; and a fee payment plan. They also require risks to be identified and mitigated up-front, so far as possible, and encourage both rigour and flexibility in risk and scope management.

However, I suspect there are also structural and process issues in both industry and Defence which both sides need to sort out.

In 1996 four Israeli academics studied over 100 developmental defence projects to try and identify the factors that contribute to success or to failure, and published their results in an academic journal, ‘Technological Forecasting and Social Change’.

They identified eight key factors. In descending order of importance these are: a sense of urgency - the more urgent the need, the greater the chance of success; the professional qualifications, sense of responsibility for project outcome and continuity of personnel appointments within the customer ‘team’; pre-project preparation, including proving technological feasibility and establishing the correct project structure; quality of the project development team, and of its leader; organisation culture within the project team, encouraging professional growth; design policy of the developing organisation - a clear policy on decision-making procedures and communications; design considerations in the early phases of the project – design to cost, reliability and ‘produceability’; and systematic use of schedule, budget and performance management tools.

There are no surprises here; it’s interesting to measure the projects mentioned above, along with the companies involved and the DMO project teams, against the eight factors identified by Tishler, Dvir and their colleagues. Their paper makes fascinating reading. This is the citation: Tishler, A., D. Dvir, et al. (1996). "Identifying Critical Success Factors in Defense Development Projects: A Multivariate Analysis." Technological Forecasting and Social Change (51 (1996)): 151-171.


A lesson from Iraq - 3 August 2008

There was a fascinating exchange in the correspondence columns of The Australian on the 1st and 2nd of August. The first shot was fired by a writer, one Chris Doran, who accused retired Army Major General Jim Molan of war crimes during the Battle of Fallujah in 2004 and elsewhere in Iraq during Molan’s eight-month tenure as Deputy Chief of Staff for Operations of the Multi National Force –Iraq (MNF-I).

Molan’s remarkably patient rebuttal of Doran’s points concluded with the words “Please read the book.” This is good advice: I’m reading it myself and am struck by a number of things.

First of all, few people outside Iraq seem to understand the dynamics of the counter-insurgency campaign there: measures of success and failure are not necessarily what one would expect, and therefore the strategies and tactics adopted by both sides often aren’t obvious, nor intuitive.

Secondly, the campaign is presented through the lens of the media: the amount by which the lens distorts the picture is a function of reporters’ and editors’ understanding of the campaign at both a strategic and a tactical level, and their ability to place the actions and reactions of the players at street level into an accurate context.

The sheer complexity of the situation there is daunting for even the best and brightest reporters, observers and analysts. But there are plenty of people who fuel their righteous anger through the selective application of ignorance to the moral and political problems they encounter. They either lack the intellect to understand the situation or (more frequently) the integrity and moral courage to deal with the mess that reality leaves in its wake. And they delay progress towards resolution.





Heard the latest? look for it here. Australian defence news


Land Warfare Conference 2008

Analysis & Commentary


Hot Topics

Rumour Control.© Copyright 2008 Gregor Ferguson Nominees Pty Ltd, Trading As Rumour Control. Unauthorised copying and distribution is prohibited.
This page designed by
Arion Productions Pty Ltd
We welcome feedback and suggestions regarding the content and functionality of this site.

Australian defence /defense industry analysis and commentary