RAN Seasprites
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RAN Seasprites
Don't know if anyone here is interested but the RAN Seasprite program has just recieved one in the back of the head. I can't find news link at the moment but it has definately been cancelled. Total cost: 1 Billoin AUD+
Helos operational: NIL
Helos operational: NIL
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Here you go Trojan. I went to post similar but a search found your thread(s) ahead of mine 
http://www.minister.defence.gov.au/F...CurrentId=7480
http://www.minister.defence.gov.au/F...CurrentId=7480
What's a $billion of our money?
ABC News
Labor cleans up Seasprite 'mess'
Billion-dollar dud: A Navy Seasprite goes through its paces (www.navy.gov.au)
The Federal Government has cancelled Australia's $1 billion commitment to the Royal Australian Navy's controversial Seasprite helicopter project.
Defence Minister Joel Fitzgibbon made the announcement at a visit to a Newcastle engineering firm this morning.
The $1 billion Seasprite fleet was due to enter service in 2001 but was indefinitely grounded in 2006.
An upgrade of a 1960s airframe with 21st century avionics, the helicopters are unable to be operated reliably in poor visibility conditions and at night.
A statement from the Defence Department said discussions with the contractor would start immediately.
"Today's announcement demonstrates our determination to make tough decisions whenever required for the security of the nation and the safety and capability of our Defence Force," Mr Fitzgibbon said.
"The decision taken by the Rudd Labor Government is one that should have been taken by the Leader of the Opposition, Brendan Nelson, when he had the opportunity last year.
"But his Government decided to put its own political interests ahead of the national interest. Consequently, the responsibility of cleaning up the mess they created falls to us."
Coalition defence spokesman Nick Minchin says Mr Fitzgibbon must explain what it will cost to drop the Seasprite contract, and what legal action the contractor Kaman will take.
Billion-dollar dud: A Navy Seasprite goes through its paces (www.navy.gov.au)
The Federal Government has cancelled Australia's $1 billion commitment to the Royal Australian Navy's controversial Seasprite helicopter project.
Defence Minister Joel Fitzgibbon made the announcement at a visit to a Newcastle engineering firm this morning.
The $1 billion Seasprite fleet was due to enter service in 2001 but was indefinitely grounded in 2006.
An upgrade of a 1960s airframe with 21st century avionics, the helicopters are unable to be operated reliably in poor visibility conditions and at night.
A statement from the Defence Department said discussions with the contractor would start immediately.
"Today's announcement demonstrates our determination to make tough decisions whenever required for the security of the nation and the safety and capability of our Defence Force," Mr Fitzgibbon said.
"The decision taken by the Rudd Labor Government is one that should have been taken by the Leader of the Opposition, Brendan Nelson, when he had the opportunity last year.
"But his Government decided to put its own political interests ahead of the national interest. Consequently, the responsibility of cleaning up the mess they created falls to us."
Coalition defence spokesman Nick Minchin says Mr Fitzgibbon must explain what it will cost to drop the Seasprite contract, and what legal action the contractor Kaman will take.
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About time too, now after having shelved out over A$1 Billion what do we have at the end of the day? are they even our airframes and can we sell them onto any one else?
Or should we mount them around the country as gate guards to remind people of this absolute foly.
Or should we mount them around the country as gate guards to remind people of this absolute foly.
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A lot of people said it was a bad idea, and it turned out to be a very bad idea.
I know people who worked on the project, it had a mulitude of problems.
The only good thing about it was that it covered our arses, as we were working on the Seahawk upgrade, which was late and overbudget, but nowhere near as bad as the sprite. I'd hate to think how much bad press we would have had without the Seasprite covering us.
Part of the delays on the Seahawk were caused by the Seasprite, they were supposed to sort out most of the software problems (same kit as was going on the Seahawk), but ended up so far behind that we overtook them.
I know people who worked on the project, it had a mulitude of problems.
The only good thing about it was that it covered our arses, as we were working on the Seahawk upgrade, which was late and overbudget, but nowhere near as bad as the sprite. I'd hate to think how much bad press we would have had without the Seasprite covering us.
Part of the delays on the Seahawk were caused by the Seasprite, they were supposed to sort out most of the software problems (same kit as was going on the Seahawk), but ended up so far behind that we overtook them.
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A few weeks ago
The Oz
The Oz
Axe falls on $1bn choppers
Patrick Walters, National security editor | February 18, 2008
NEARLY a year after it earned a reprieve from the Howard government, the navy's $1 billion Seasprite helicopter is set to be axed as the Defence Department undertakes a comprehensive review of major spending programs.
Senior defence sources have told The Australian that it is certain the ill-fated Seasprite program - which is running more than six years late - will be abandoned.
The navy's surface fleet is expected to be equipped with European MRH-90 machines in place of the Seasprites, which were first ordered in 1997.
The 11 twin-engine SG-2G(A) Super Seasprites, equipped with Penguin anti-ship missiles, were destined to operate from the RAN's Anzac-class frigates, performing a maritime strike and surveillance capability for the surface fleet.
But the project, originally costed at $667 million a decade ago, has been dogged by airworthiness and software engineering glitches, making it the most troublesome of Defence's "legacy" projects, arising from poor procurement decisions made by previous governments.
Last year, former defence minister and now Opposition Leader Brendan Nelson recommended the project be axed, but he was overruled by John Howard and his cabinet, who were worried about the negative political fallout from such a move in the lead-up to the November election.
Senior Liberal Party sources told The Australian last week that had the Coalition been returned to office, the axe would have fallen on the Seasprites.
Nine Seasprites have been provisionally handed over to the navy, but the fleet has been grounded while the software problems and air certification issues are sorted out.
The Defence Department has estimated that the Seasprites won't be fully operational until 2010 at the earliest.
In March 2007, the helicopter's manufacturer, US-based Kaman Aviation, warned the Howard government that it would face a lengthy legal battle if it scrapped the program. Kaman said that cancellation would generate an arbitration process that would uphold both the reputation of the Seasprite platform and its manufacturer and expose weaknesses in the Defence Department's equipment procurement system.
Defence Minister Joel Fitzgibbon is examining a range of big defence contracts, including the Howard government's decision to spend $6.5 billion on 24F/A-18 Super Hornet fighters.
Mr Fitzgibbon has ordered a full review of Australia's future air-combat capability in the wake of the Super Hornet buy.
The review, to be completed by the end of April, will examine issues relating to the retirement of the F-111 strike force from 2010 and the planned introduction of the F-35 fighters from 2014. The Super Hornets are due to enter service from 2011 as an interim capability.
Cancelling the Super Hornet contract could cost several hundred million dollars and have an adverse impact on Australia's close ties with Washington, senior defence analysts believe.
Patrick Walters, National security editor | February 18, 2008
NEARLY a year after it earned a reprieve from the Howard government, the navy's $1 billion Seasprite helicopter is set to be axed as the Defence Department undertakes a comprehensive review of major spending programs.
Senior defence sources have told The Australian that it is certain the ill-fated Seasprite program - which is running more than six years late - will be abandoned.
The navy's surface fleet is expected to be equipped with European MRH-90 machines in place of the Seasprites, which were first ordered in 1997.
The 11 twin-engine SG-2G(A) Super Seasprites, equipped with Penguin anti-ship missiles, were destined to operate from the RAN's Anzac-class frigates, performing a maritime strike and surveillance capability for the surface fleet.
But the project, originally costed at $667 million a decade ago, has been dogged by airworthiness and software engineering glitches, making it the most troublesome of Defence's "legacy" projects, arising from poor procurement decisions made by previous governments.
Last year, former defence minister and now Opposition Leader Brendan Nelson recommended the project be axed, but he was overruled by John Howard and his cabinet, who were worried about the negative political fallout from such a move in the lead-up to the November election.
Senior Liberal Party sources told The Australian last week that had the Coalition been returned to office, the axe would have fallen on the Seasprites.
Nine Seasprites have been provisionally handed over to the navy, but the fleet has been grounded while the software problems and air certification issues are sorted out.
The Defence Department has estimated that the Seasprites won't be fully operational until 2010 at the earliest.
In March 2007, the helicopter's manufacturer, US-based Kaman Aviation, warned the Howard government that it would face a lengthy legal battle if it scrapped the program. Kaman said that cancellation would generate an arbitration process that would uphold both the reputation of the Seasprite platform and its manufacturer and expose weaknesses in the Defence Department's equipment procurement system.
Defence Minister Joel Fitzgibbon is examining a range of big defence contracts, including the Howard government's decision to spend $6.5 billion on 24F/A-18 Super Hornet fighters.
Mr Fitzgibbon has ordered a full review of Australia's future air-combat capability in the wake of the Super Hornet buy.
The review, to be completed by the end of April, will examine issues relating to the retirement of the F-111 strike force from 2010 and the planned introduction of the F-35 fighters from 2014. The Super Hornets are due to enter service from 2011 as an interim capability.
Cancelling the Super Hornet contract could cost several hundred million dollars and have an adverse impact on Australia's close ties with Washington, senior defence analysts believe.
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when all is said and done, probably the right decision, however, poor old 805 squadron cops the axe again
http://www.navy.gov.au/units/805sqn/
http://www.navy.gov.au/units/805sqn/
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Reminds me of the British Chinook HC.3 procurement.
Decision leaves navy in parlous state
COMMENT: Patrick Walters | March 06, 2008
FINALLY, Joel Fitzgibbon has bitten the bullet.
A year ago, Brendan Nelson, as defence minister, wanted to cancel the $1 billion Seasprite helicopter program, having been advised that a full operational capability was still years away.
But with an election looming, John Howard's national security committee walked away from his recommendation, anxious about the adverse political fallout.
In the end, the Defence Department simply lost confidence both in the Seasprite platform and the ability of US prime contractor Kaman to eventually deliver a fully "mission capable" aircraft.
This was despite the fact that nine of the 11 helicopters had been handed over to the commonwealth and Kaman's stated confidence that all the technical glitches identified by the customer had been addressed.
The junked Seasprites, which could cost the taxpayer as much as $1.3 billion, are a monumental defence debacle -- arguably the worst in the modern era.
The sorry saga will be studied by generations of defence procurement experts as a classic case of how not to go about a major equipment purchase.
The Seasprite project dates back to the early 1990s, when the navy wanted a helicopter for its planned "Offshore Patrol Combatant", a smaller warship it planned to build in partnership with Malaysia.
When the Malaysians pulled out, Defence should have axed the project, but the Seasprites were then earmarked for the Anzac-class frigates, with a contract finally signed in 1997.
Australia's Defence Department stands indicted for approving an "orphan platform" uniquely designed for our navy with the extraordinarily ambitious aim of incorporating state-of-the-art avionics into a 1960s airframe.
As Nelson once observed, the Seasprite program was like trying to fit an EH Holden into a 2010 motor vehicle. [sic? - shouldn't it be modern computing/avionics into a EH Holden]
While Kaman incurred major problems in fulfilling the original contract, much of the blame must be sheeted home to the Defence Department and its successive decision-making failures in regard to the Seasprites.
Kaman has continued to insist that problems with the Seasprite's avionics and combat systems integration have been solved, but Defence has had serious doubts that it would ever perform fully in line with contract specifications.
Fitzgibbon, as Defence Minister, has had the courage to act, ending two years of procrastination by the Howard government. But his decision leaves the navy's Fleet Air Arm in a parlous state, with the Sea King fleet due to be phased out and the Seasprites abandoned.
The navy's Anzac frigates face a lengthy period without an adequate helicopter-borne maritime strike and surveillance capability.
COMMENT: Patrick Walters | March 06, 2008
FINALLY, Joel Fitzgibbon has bitten the bullet.
A year ago, Brendan Nelson, as defence minister, wanted to cancel the $1 billion Seasprite helicopter program, having been advised that a full operational capability was still years away.
But with an election looming, John Howard's national security committee walked away from his recommendation, anxious about the adverse political fallout.
In the end, the Defence Department simply lost confidence both in the Seasprite platform and the ability of US prime contractor Kaman to eventually deliver a fully "mission capable" aircraft.
This was despite the fact that nine of the 11 helicopters had been handed over to the commonwealth and Kaman's stated confidence that all the technical glitches identified by the customer had been addressed.
The junked Seasprites, which could cost the taxpayer as much as $1.3 billion, are a monumental defence debacle -- arguably the worst in the modern era.
The sorry saga will be studied by generations of defence procurement experts as a classic case of how not to go about a major equipment purchase.
The Seasprite project dates back to the early 1990s, when the navy wanted a helicopter for its planned "Offshore Patrol Combatant", a smaller warship it planned to build in partnership with Malaysia.
When the Malaysians pulled out, Defence should have axed the project, but the Seasprites were then earmarked for the Anzac-class frigates, with a contract finally signed in 1997.
Australia's Defence Department stands indicted for approving an "orphan platform" uniquely designed for our navy with the extraordinarily ambitious aim of incorporating state-of-the-art avionics into a 1960s airframe.
As Nelson once observed, the Seasprite program was like trying to fit an EH Holden into a 2010 motor vehicle. [sic? - shouldn't it be modern computing/avionics into a EH Holden]
While Kaman incurred major problems in fulfilling the original contract, much of the blame must be sheeted home to the Defence Department and its successive decision-making failures in regard to the Seasprites.
Kaman has continued to insist that problems with the Seasprite's avionics and combat systems integration have been solved, but Defence has had serious doubts that it would ever perform fully in line with contract specifications.
Fitzgibbon, as Defence Minister, has had the courage to act, ending two years of procrastination by the Howard government. But his decision leaves the navy's Fleet Air Arm in a parlous state, with the Sea King fleet due to be phased out and the Seasprites abandoned.
The navy's Anzac frigates face a lengthy period without an adequate helicopter-borne maritime strike and surveillance capability.
Of course a more accurate Headline to that story would have been Labor cleans up the mess it started with its buy second hand policy last time it ran the countries defence force.
The other side of course should have shot it in the head a lot earlier too.
The other side of course should have shot it in the head a lot earlier too.
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And a big part of the mess was the repeated revisions of the airworthiness certification standards each time Kaman came close to passing them.
That is a big part of why Kaman will (in my opinion) win a large settlement in court... the Liberal government was trying hard to prevent ever having to accept the Seasprite, and now Labor will get the blame for having to pay the settlement.
That is a big part of why Kaman will (in my opinion) win a large settlement in court... the Liberal government was trying hard to prevent ever having to accept the Seasprite, and now Labor will get the blame for having to pay the settlement.
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The Liberal Govt ordered the Seasprites in 1997. I am not a staunch supporter of either party, but this is a Howard/Liberal created mess
Surely the blame for all this does not lie with either political party but with the people that selected the aircraft .....The Navy! And no I am not fan of either side of politics.
I am not too familiar with the procurement process but...
Surely it was the Navy who wrote the requirements, ran the competition and then selected (or recommended) the S2G(A). The people who fund these projects rely on the supposed subject matter experts when giving approval...or am I missing something?
I am not too familiar with the procurement process but...
Surely it was the Navy who wrote the requirements, ran the competition and then selected (or recommended) the S2G(A). The people who fund these projects rely on the supposed subject matter experts when giving approval...or am I missing something?
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Turkeyslapper (love the 'handle', by the way, but am unwilling to say what picture it brings to mind), while I don't doubt the Navy should wear some of the blame for not stating their case more forcefully than they appear to have done on this case, (and quite a few years ago), I think you'll find a few replies from people more in the know than I am saying that your comment laying the whole blame on the Navy isn't really accurate.
And that's been the nub of the problem in the procurement process for major projects in 'Phallus in Blunderland' (Russell Hill to the uniniated) for many years now.
The people who make these decisions involving billions of dollars all too often aren't the military men but instead, politicians and/or civilian 'experts' from DoD (or people who happen to wear a uniform but have never left Russell Hill in their military careers) who can override the operational military men.
And that's been the nub of the problem in the procurement process for major projects in 'Phallus in Blunderland' (Russell Hill to the uniniated) for many years now.
The people who make these decisions involving billions of dollars all too often aren't the military men but instead, politicians and/or civilian 'experts' from DoD (or people who happen to wear a uniform but have never left Russell Hill in their military careers) who can override the operational military men.
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From (bolding mine)http://www.theage.com.au/articles/20...864378971.html
By Mark Forbes
June 17 2002
"We should never have bought them in the first place," said Aldo Borgu, an adviser to former defence ministers John Moore and Peter Reith and now a director of the Australian Strategic Policy Institute. The plan to build a unique helicopter was unrealistic and poorly executed, and was designed for a proposed Offshore Patrol Vessel (OPV) to be built jointly with Malaysia. The patrol vessel never got off the ground.
"Once the OPV didn't go ahead, the rationale for buying a smaller helicopter disappeared," Mr Borgu said.
The patrol vessel project was a favourite of the Keating government, proposed by major ALP donor Transfield (now Tenix). The Defence Force hierarchy was always wary of a project it believed was driven by a desire for export dollars, and its fears increased after the Coalition's election in March, 1996.
Put simply, said one senior official, the boat was "neither fish nor fowl", too big for a conventional patrol boat, too small to combat a frigate. To expand its range and firepower it needed a helicopter, but the vessel was too small to carry the Seahawks already planned for the Anzac frigates.
Tenders were called for a small, state-of-the-art helicopter. The former chief of navy, Don Chalmers, confirmed that the Seasprites were acquired for the patrol vessels, OPV, although it was also planned to place some on the Anzacs. Despite this, Defence and the government failed to formally link the Seasprite and patrol vessel projects.
In Senate estimates hearings this month, Air Vice-Marshal Ray Conroy attempted to fudge over when the patrol vessel project was dropped. "That was effectively abandoned in February, 1998, when Malaysia selected a German tender over the one submitted by the Australian company," he said.
At that point, the argument for buying the Seasprite instead of more of the larger Seahawk collapsed, Air Vice-Marshal Conroy admitted. But he said the argument was hypothetical as the Seasprite contract was signed earlier, in June, 1997.
In fact, Malaysia announced the patrol vessel decision in October, 1997, but earlier that year in March the Howard cabinet was told the deal would not go ahead and the vessel was unsuitable for the Australian Navy.
At a cabinet meeting in Pakenham on March 11, former defence minister Ian McLachlan presented a call from the then Defence Force chief, General John Baker, to suspend the patrol vessel proposal.
"I don't want to embarrass anybody, but we felt the thing was heading south," Mr McLachlan said this week.
"As well, we were in a position of having to buy some vessels that were not appropriate for replacing either the Fremantle patrol boats or warships and we didn't want to do that.
"All the information I could glean was the Malaysians were cooling off on the whole deal. It was a big order but got smaller as the months went on and we thought it might never come to pass and it didn't."
Government sources confirmed that the cabinet had effectively decided to suspend the patrol vessel project, but no decision was announced after strenuous objections by Foreign Affairs Minister Alexander Downer and fears that an announcement would be portrayed as scuttling Transfield's Malaysian tender.
"There was a problem with not connecting the helicopter purchase to the OPV purchase," Mr Borgu said. "When cabinet decided to kill off the OPV nobody thought about the Seasprites. It's adding an additional helicopter platform to the ADF unnecessarily as the Anzacs could take the Seahawks."
A senior member of the Seasprite project agrees the deal should have been scrapped. "It's smarter to get 27 Seahawks rather than 16 Seahawks and 11 Seasprites," he said.
Mr McLachlan said he has no recollection of the Defence Force ever telling him of the pivotal link between the patrol vessel project and the Seasprites.
One of Defence's most senior officials at the time also did not "recall a lot of discussion about cancelling the Seasprite when the OPV hit the fence. I don't think it was looked at carefully and that's perhaps where we made a mistake."
Despite the belief that the patrol vessel the Seasprites were designed for would never be built, Defence - never keen to reject already-committed funds - went ahead and signed the $660 million helicopter contract with Kaman.
That contract contained the seeds of today's fiasco, Defence insiders admit. Ever ambitious, Defence wanted to build a high-tech helicopter at a bargain price. The number of helicopters ordered had shrunk to fit under the price cap and it was determined to go for an option that would cut costs further, rebuilding surplus US navy helicopters up to 40 years old.
Mr McLachlan said: "I do remember a long series of discussions about the problem that now appears to have arisen, and that is: if you buy something with old frames, will everybody say they are old aircraft?"
The second-hand helicopter purchase has been pilloried, but those involved in the project are adamant the issue is overblown. A team of 10 has supervised the selection of helicopters from their shrink-wrapped storage in the Arizona desert and overseen the removal of corrosion from the frames.
Expecting Kaman to install a new, sophisticated weapons and avionics system into these "old birds" is where the project came to grief, insiders said.
Too much was expected of Kaman in too short a time. The Seasprite deal was Kaman's biggest ever and the company was no big-time defence player. Founded by eccentric inventor Charlie Kaman, who also designed the Ovation electric guitar, it has made more in recent years from musical instrument sales than aerospace. "The Commonwealth has signed up to an unachievable contract at an unachievable price," said one senior member of the project team. "The whole thing was set up for failure."
It was unfair to blame Kaman, said one official who played a key role in the contract. "Defence has to realise you can't lay all the risk and blame on this little company," he said.
The official said the contract had no damages clauses because liquidated damages on a deal this size would put Kaman out of business.
The head of the Defence Materiel Organisation, Mick Roche, has said the contract is "not the sort of contract we would wish to draw up these days". In a speech to a Defence seminar earlier this year he said Defence's project management should have ensured effective penalty clauses and prevented a key software contractor walking away, resulting in seven helicopters being delivered without a mission-control system.
Installing this sophisticated control system had been subcontracted to US firm Litton, a major military company that dwarfed Kaman. Soon after accepting the contract, Litton won a much bigger US deal and moved many key staff from the Seasprite project.
In 1999 Litton decided to walk away from the complex task, and under its contract won a settlement that cost Kaman $32 million. Australian firm CSC has now been contracted for the task, but the project is already more than three years' late.
Defence is trying to redraft Kaman's contract, despite having already paid out $960 million of the $1 billion budget. Last month Mr Roche told a Senate hearing the government was examining suing Kaman for breach of contract and could possibly recover that money, but then "we will not end up with the helicopters and will have to start again, that is the dilemma we are in".
Another dilemma remains for the navy. Even if it does receive working helicopters, the boats they were designed for do not exist. Putting the Seasprites on the existing Anzac frigates makes less sense. The Seasprites carry an anti-surface missile, the Penguin, originally intended to cover for the patrol vessel's lack of such a weapon, but the Anzacs already carry the Harpoon anti-surface missile.
A former defence official said the Seasprites created profound logistics and maintenance problems for the navy, with it having five different helicopters for five different uses. Air force chief Angus Houston has overall responsibility for air capability but pointedly refused to endorse the Seasprite purchase when interviewed. Asked if the Seahawk would have been a better choice with the patrol vessel off the scene and if the Seasprite was one helicopter too many for the military, Air Marshal Houston replied: "I'd prefer not to make a judgment on that, you can draw your own conclusions. I think we do have too many helicopter types."
"You can't dispute it's the wrong helicopter," Mr Borgu said. "There are obvious question marks over the Penguin anti-ship missile as opposed to the Harpoon, and the anti-sub capability isn't as good as the Seahawks. We should have got the Seahawks. On balance the ADF would have been better off."
By Mark Forbes
June 17 2002
"We should never have bought them in the first place," said Aldo Borgu, an adviser to former defence ministers John Moore and Peter Reith and now a director of the Australian Strategic Policy Institute. The plan to build a unique helicopter was unrealistic and poorly executed, and was designed for a proposed Offshore Patrol Vessel (OPV) to be built jointly with Malaysia. The patrol vessel never got off the ground.
"Once the OPV didn't go ahead, the rationale for buying a smaller helicopter disappeared," Mr Borgu said.
The patrol vessel project was a favourite of the Keating government, proposed by major ALP donor Transfield (now Tenix). The Defence Force hierarchy was always wary of a project it believed was driven by a desire for export dollars, and its fears increased after the Coalition's election in March, 1996.
Put simply, said one senior official, the boat was "neither fish nor fowl", too big for a conventional patrol boat, too small to combat a frigate. To expand its range and firepower it needed a helicopter, but the vessel was too small to carry the Seahawks already planned for the Anzac frigates.
Tenders were called for a small, state-of-the-art helicopter. The former chief of navy, Don Chalmers, confirmed that the Seasprites were acquired for the patrol vessels, OPV, although it was also planned to place some on the Anzacs. Despite this, Defence and the government failed to formally link the Seasprite and patrol vessel projects.
In Senate estimates hearings this month, Air Vice-Marshal Ray Conroy attempted to fudge over when the patrol vessel project was dropped. "That was effectively abandoned in February, 1998, when Malaysia selected a German tender over the one submitted by the Australian company," he said.
At that point, the argument for buying the Seasprite instead of more of the larger Seahawk collapsed, Air Vice-Marshal Conroy admitted. But he said the argument was hypothetical as the Seasprite contract was signed earlier, in June, 1997.
In fact, Malaysia announced the patrol vessel decision in October, 1997, but earlier that year in March the Howard cabinet was told the deal would not go ahead and the vessel was unsuitable for the Australian Navy.
At a cabinet meeting in Pakenham on March 11, former defence minister Ian McLachlan presented a call from the then Defence Force chief, General John Baker, to suspend the patrol vessel proposal.
"I don't want to embarrass anybody, but we felt the thing was heading south," Mr McLachlan said this week.
"As well, we were in a position of having to buy some vessels that were not appropriate for replacing either the Fremantle patrol boats or warships and we didn't want to do that.
"All the information I could glean was the Malaysians were cooling off on the whole deal. It was a big order but got smaller as the months went on and we thought it might never come to pass and it didn't."
Government sources confirmed that the cabinet had effectively decided to suspend the patrol vessel project, but no decision was announced after strenuous objections by Foreign Affairs Minister Alexander Downer and fears that an announcement would be portrayed as scuttling Transfield's Malaysian tender.
"There was a problem with not connecting the helicopter purchase to the OPV purchase," Mr Borgu said. "When cabinet decided to kill off the OPV nobody thought about the Seasprites. It's adding an additional helicopter platform to the ADF unnecessarily as the Anzacs could take the Seahawks."
A senior member of the Seasprite project agrees the deal should have been scrapped. "It's smarter to get 27 Seahawks rather than 16 Seahawks and 11 Seasprites," he said.
Mr McLachlan said he has no recollection of the Defence Force ever telling him of the pivotal link between the patrol vessel project and the Seasprites.
One of Defence's most senior officials at the time also did not "recall a lot of discussion about cancelling the Seasprite when the OPV hit the fence. I don't think it was looked at carefully and that's perhaps where we made a mistake."
Despite the belief that the patrol vessel the Seasprites were designed for would never be built, Defence - never keen to reject already-committed funds - went ahead and signed the $660 million helicopter contract with Kaman.
That contract contained the seeds of today's fiasco, Defence insiders admit. Ever ambitious, Defence wanted to build a high-tech helicopter at a bargain price. The number of helicopters ordered had shrunk to fit under the price cap and it was determined to go for an option that would cut costs further, rebuilding surplus US navy helicopters up to 40 years old.
Mr McLachlan said: "I do remember a long series of discussions about the problem that now appears to have arisen, and that is: if you buy something with old frames, will everybody say they are old aircraft?"
The second-hand helicopter purchase has been pilloried, but those involved in the project are adamant the issue is overblown. A team of 10 has supervised the selection of helicopters from their shrink-wrapped storage in the Arizona desert and overseen the removal of corrosion from the frames.
Expecting Kaman to install a new, sophisticated weapons and avionics system into these "old birds" is where the project came to grief, insiders said.
Too much was expected of Kaman in too short a time. The Seasprite deal was Kaman's biggest ever and the company was no big-time defence player. Founded by eccentric inventor Charlie Kaman, who also designed the Ovation electric guitar, it has made more in recent years from musical instrument sales than aerospace. "The Commonwealth has signed up to an unachievable contract at an unachievable price," said one senior member of the project team. "The whole thing was set up for failure."
It was unfair to blame Kaman, said one official who played a key role in the contract. "Defence has to realise you can't lay all the risk and blame on this little company," he said.
The official said the contract had no damages clauses because liquidated damages on a deal this size would put Kaman out of business.
The head of the Defence Materiel Organisation, Mick Roche, has said the contract is "not the sort of contract we would wish to draw up these days". In a speech to a Defence seminar earlier this year he said Defence's project management should have ensured effective penalty clauses and prevented a key software contractor walking away, resulting in seven helicopters being delivered without a mission-control system.
Installing this sophisticated control system had been subcontracted to US firm Litton, a major military company that dwarfed Kaman. Soon after accepting the contract, Litton won a much bigger US deal and moved many key staff from the Seasprite project.
In 1999 Litton decided to walk away from the complex task, and under its contract won a settlement that cost Kaman $32 million. Australian firm CSC has now been contracted for the task, but the project is already more than three years' late.
Defence is trying to redraft Kaman's contract, despite having already paid out $960 million of the $1 billion budget. Last month Mr Roche told a Senate hearing the government was examining suing Kaman for breach of contract and could possibly recover that money, but then "we will not end up with the helicopters and will have to start again, that is the dilemma we are in".
Another dilemma remains for the navy. Even if it does receive working helicopters, the boats they were designed for do not exist. Putting the Seasprites on the existing Anzac frigates makes less sense. The Seasprites carry an anti-surface missile, the Penguin, originally intended to cover for the patrol vessel's lack of such a weapon, but the Anzacs already carry the Harpoon anti-surface missile.
A former defence official said the Seasprites created profound logistics and maintenance problems for the navy, with it having five different helicopters for five different uses. Air force chief Angus Houston has overall responsibility for air capability but pointedly refused to endorse the Seasprite purchase when interviewed. Asked if the Seahawk would have been a better choice with the patrol vessel off the scene and if the Seasprite was one helicopter too many for the military, Air Marshal Houston replied: "I'd prefer not to make a judgment on that, you can draw your own conclusions. I think we do have too many helicopter types."
"You can't dispute it's the wrong helicopter," Mr Borgu said. "There are obvious question marks over the Penguin anti-ship missile as opposed to the Harpoon, and the anti-sub capability isn't as good as the Seahawks. We should have got the Seahawks. On balance the ADF would have been better off."
Join Date: Apr 1999
Location: A very long runway
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We told them to buy the Superlynx!! Some crews were already trained and experienced with the RN, proven airframe operated widely around the world - the kaman always was going to be a disaster! Maybe they will see sense and buy the Wildcat!!!!!! Wonder what the Kiwis' will do now?
Could be the saviour of the Wildcat programme?
Could be the saviour of the Wildcat programme?