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Parliamentary Joint Committee on Foreign Affairs, Defence and Trade
Department of Defence annual report 2010-11

BENTLEY, Air Cdre (Rtd) Graham Mitchell, Director, International Business Development Australia, Lockheed Martin Aeronautics Company

BURBAGE, Mr Charles Thomas (Tom), Executive Vice President and General Manager, F-35 JSF Program Integration, Lockheed Martin Aeronautics Company

LIBERSON, Mr Gary Maxim, Technical Lead Operations Analysis, Strategic Studies Group, Lockheed Martin Aeronautics Company

McCOY, Mr Bradley Kent, F-22 and F-35 Strategic Analysis, Lockheed Martin Aeronautics Company

Subcommittee met at 17:39

CHAIR ( Senator Furner ): Welcome. Although the Defence Subcommittee does not require you to give evidence on oath, I should advise you that these hearings are legal proceedings of the parliament and therefore have the same standing as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard. Do you wish to make an opening statement to the subcommittee?

Mr Burbage : Yes, I would.

CHAIR: Please proceed.

Mr Burbage : I have a prepared statement that I would like to make for the record. Members of the committee, on behalf of the F35 program, Lockheed Martin and the F35 industrial team that I represent today, thank you for the opportunity to address the committee. Before we start let me introduce the team that is with me today. Brad McCoy, who is on my right, is, as he mentioned, responsible for strategic assessment of our fifth-generation fighters. Brad is a retired air force command pilot and he has 2800 hours in the F15 and the F22, including 300 combat hours in Desert Shield, Desert Storm, Southern Watch and Northern Watch. While assigned to Air Combat Command, he was the deputy chief for fifth-generation fighter requirements, which included both the F22 and the F35, and he is the only one in the room who has actually flown a fifth-generation fighter.

Gary Liberson, who is on his right, has 22 years of experience as an operations analyst and research engineer with McDonnell Douglas, the RAND Corporation, and Lockheed Martin Aeronautics. He has extensive experience with combat analysis, methodologies and analysis techniques. He is considered an expert in Brawler, Thunder, Suppressor, SeaFan and PacWar constructive simulation tools. His areas of expertise include combat aircraft systems and tactics as well as advanced threat analysis.

Graham Bentley retired from the Royal Air Force after 34 years of service, with 5,000 hours of operational flying in multiple operational theatres. In 2003, as commander of JTF633, he commanded all Australian forces in the Middle East during the Iraq conflict. He was the director general of policy and planning at the air force headquarters in 2002, when a recommendation to join the JSF program was presented to the government. My relevant background includes 25 years as an active duty and reserve naval aviator, with operational deployments aboard three aircraft carriers, and training as a navy test pilot. I have worked for Lockheed Martin for 32 years. My assignments have included four years as the F22 program manager and 11 years as the F35 program manager.

For the record, I would like to touch on two important points in this brief opening statement. The first is the value proposition of the F35 program, particularly as it applies to Australia. The second is to show you that the advanced technology and capability that is resident in the F35 family of airplanes is both transformational and essential to the future combat capability of the allied air forces.

The value proposition of the F35 starts with a driving requirement to recapitalise the three tactical air services of the United States, plus those of our closest allies—nations that are committed to defending the freedoms we share. The program will recapitalise those air forces with true next generation multirole fighter capability that can launch and land from any operational venue to bring identical combat capability to the fight when called on. The program will also reduce the cost of the military enterprise which, for the past two decades, has been engaged in sustained joint service coalition based peacekeeping and combat operations. In the case of individual services and individual nations, there is a real opportunity to reduce expensive infrastructure or to introduce revolutionary new capabilities. The intention of the US Marine Corps is to replace the F18 AV8 and EA6B with the F35 and is estimated by the marines to save $1 billion per year when the transition is complete.

Across the current partnership, the F35 will eventually replace the F4, A10, F16, F18, AV8B, EA6B, Tornado, F111 and AMX. For Australia, the government partnership and development of this next generation weapons system has required a fixed contribution of US$150 million spread over the 14 years of our development program. That contribution has not changed despite two major restructurings of the program and significant additional development funds from the United States.

The F35 configuration that Australia will take delivery of in 2014 is identical to the configuration of the US Air Force. Both of these facts are unique in the historical annals of major combat development programs in Australia and change the historical acquisition paradigm of cost overruns and unique configuration development. The fact that all three US services and 12 other first year combat services in the world have selected the F35 based on a comprehensive operational requirements definition is testimony to the inherent technology and capability of the F35 air system. A short summary is that the F35 weapons system is intended to provide unprecedented situational awareness to the fighter pilot and the flight and command and control infrastructure, while denying the same to the adversary. The F35 also leverages the economies of commonality and scale and procurement and sustainment that come with much broader participation than traditional single-service fleet recapitalisation. From the industrial perspective, we are also recapitalising the aerospace industry with new manufacturing technologies as we introduce production efficiencies across the industrial partnership.

Australian industry has been involved in the F35 programs since the beginning and the first production prototype included parts made in Australia when it first flew in 2006. There is a diversity of participation as Australian industry provides technically complex engine trailers, advanced pyrotechnics expendables, hard and soft metal machine parts, complex engine hardware and ground support equipment, advanced composite aircraft skins, and they are on track to provide complete vertical tail assemblies. New technology initiatives are underway, including a new machining process called 'direct manufacturing of titanium', which has the potential to take titanium powder from the mines of Australia to a new way of making advanced aerospace structure.

Many of these contracts were granted well in advance of a firm commitment to purchase an operational fleet of airplanes—another new paradigm for acquisition of major defence systems. These industrial ties will enhance the economic relationships between the US and participating allied nations and will underscore the military ties that enable coalition burden sharing in the future. Australian industry will also be integrated into the long-term training and sustainment operations of the F35. These industrial ties will enable the Royal Australian Air Force self-sufficiency for sustainment. More specifically, over the past few months Lockheed Martin, in collaboration with the respective US and Australian JSF program officers, has been developing the framework for a long-term sustainment strategy. That strategy will leverage the desired logistical economies of scale that the F35 program brings in aggregate while allowing for Australian industry to participate as the primary means for sustaining the Royal Air Force air force fleet of F35s. At no time will Australian F35s have to leave Australia. It is clear that capturing the full potential of the F35 depends on maintaining the strategic perspective in making decisions that ensure Australia leverages the benefits of the program.

My second objective is to show you that the advanced technology and capability that is resident in the F35 family of airplanes is both transformational and essential to the future combat capability of the allied air forces. Allow me to provide an update on the current performance of the program. 2011 was a year of sustained performance in ground testing, flight testing and maturing of our manufacturing processes. All three variants completed static structural strength testing to 150 per cent of any loads that can be experienced in flight, with no issues. The F35C completed undercarriage drop tests with no change to the landing gear. We are now conducting durability testing on all three variants and we will test two full lifetimes of usage against the very demanding set of structural criteria.

The United States Air Force variant, which is Australia's configuration, is more than halfway through its first lifetime of durability structural testing. In flight tests last year, we completed 972 test flights against a plan of 872 and completed the year approximately seven per cent ahead in total flight test points. We have flown to the maximum speed and G limits on the F35A and we have completed initial sea trials with the F35B aboard the USS Wasp,and our F35C completed initial catapult carrier compatibility tests on both conventional catapults and the new electro magnetic system. Not surprisingly, testing has uncovered technical issues such as carrier arrestment, helmet camera night vision acuity and an effective fuel dump, but all these issues have engineering solutions which are incorporated or are being incorporated into production designs prior to the build of Australia's first airplane.

Our mission systems software has gone through extensive maturation this year and we have successfully introduced the very complex capabilities of multilevel security and sensor fusion. These capabilities are critical to achieving the full potential of fifth-generation fighter performance. More than 80 per cent of all of our airborne software is flying today and all of our sensors are demonstrating the required performance. The implementation of the multilevel security design did in fact require approximately three more months than originally planned; however, recovery plans have been developed and implemented. We expect to recover two of those three months by mid-year and all three by the end of the year. Throughout 2012, we will be fully implementing an advanced sensor fusion, begin the integration of weapons and conduct high-angle flight testing.

By September of this year, we expect to have block 2B, as we refer to its software, which is the software that marines will take as their initial operational capability to be flying in our test aircraft.

The factory is manufacturing F35s at a rate of four per month and this year will deliver our first three international jets to the UK and the Netherlands. These jets will be part of the operational test fleet, and international pilots will participate with US pilots in that testing.

CHAIR: Is that three to both those countries?

Mr Burbage : There is a total of six—the first three are two for the United Kingdom and one for the Netherlands; the rest are in the next batch of production airplanes.

We have delivered nine airplanes—six air force and three marine corps versions to the integrated test centre at Eglin Air Force Base in Florida. We are on track to deliver 35 more airplanes this year. Among those will be the first airplanes to the US Air Force Air Combat Command and the 1st US Marine Corps operating base in Yuma, Arizona.

The initial F35 acquisition strategy was structured around six low-rate initial production lots of about 290 airplanes and was intended to employ cost-plus type contracts. In 2010, the industry team agreed to move to a fixed-price type contact with the fourth production lot two years earlier than originally planned. This agreement occurred after 31 production airplanes were under contract with none delivered. Future production contracts are expected to be firm, fixed price and will combine both US and allied partner procurements into a single buy.

It is important to remember that the F35 program and industry participants have invested heavily in highly automated precision and motion based manufacturing infrastructure in our factories and throughout our global supply chain, including here in Australia, to deliver industrial capability at the efficient production rates that were envisioned.

Over the last few years, the reduction in near-term procurement budgets resulting from the global economic crisis, coupled with the potential impact of concurrency due to extended flight testing, has resulted in a movement of significant numbers of US and partner nation airplanes out of the near-term production profile into future years. This movement is the single largest contributor to the increase in unit costs for the F35. We believe that the risk of concurrency has been reduced significantly with the progress we have seen on the technical program and with the reduction in production orders already planned.

It is important for future affordability to provide stability in annual orders and to move to higher, more efficient production rates as quickly as practical. All participating nations, including Australia, need to stay the course in their procurement profiles to decrease the volatility in their production demand.

In summary, the Joint Strike Fighter program is the first of its kind with three variants, nine international partners, additional strategic allies and more than 1,300 global suppliers. It is delivering revolutionary, game-changing technology that has now been technically endorsed by all participating nations and their air combat services. For the first time, it is now operationally possible to deliver a next-generation joint coalition air power from any operating venue ashore or afloat while achieving economies of commonality and scale across that partnership. The F35 was conceived for the exact situation we find ourselves in today: global economic pressures and an increasingly uncertain security environment that regularly requires our allies to join forces in defence of the freedoms we all treasure.

On behalf of Lockheed Martin and the F35 industry team, again, thank you for this opportunity, and I look forward to your questions. Prior to that, I would like to show a short video to highlight program progress over the last 12 months. That concludes my statement.

A video was then shown—

CHAIR: We will continue on. No doubt there are a number of people wishing to ask questions, and we will have a fair distribution of questions asked. I might start with a few myself. The committee received evidence a couple of meetings ago in relation to a simulated combat exercise. Maybe Mr Liberson might be able to answer this question. The evidence was such that a combat exercise was developed using simulated combat fights somewhere over the northern Pacific and that that indicated that the F35 was deficient in terms of fighting against foreign aircraft. I would personally like to know whether that is possible, to do a simulated combat exercise doing that with the information given the evidence that was provided. Also, have you got any response to the evidence? I am not certain whether you have heard the evidence in respect of those particular matters.

Mr Liberson : I need a little more of the specifics in terms of what exercise you are talking about.

Air Cdre Bentley : If I can talk to simulations, and then Gary can—he probably talks best to simulations—I would say this. You can only truly represent what the F35 is capable of and what other fifth generation and other fourth generation aeroplanes are capable of when you have all of the classified information. Trying to simulate something that you do not fully understand is based on false assumptions and false ground rules. If you go in with false assumptions and false ground rules, you will get false answers.

CHAIR: So I take it from that response you have not provided that confidential statistics to anyone other than those that are no doubt purchasing the aircraft?

Air Cdre Bentley : All of the participants, all of the partners, all of the FMS customers, their senior Defence officials—

CHAIR: I am sorry, the bells are ringing for a Senate division.

Mr ADAMS: The green team will stay.

ACTING CHAIR ( Dr Jensen ): We will continue. Air Commodore Bentley?

Air Cdre Bentley : They have all been provided with that classified information, they have all made assessments and they have all decided, against all the opportunities that they have, that the best airplane for them is the F35.

Mr Burbage : It is probably also important to add that pilots from the Royal Australian Air Force, all the participating nations' air forces and all three US services have come into the manned tactical simulator, the pilot-in-the-loop high-fidelity simulation of an advanced high-threat environment. They have actually flown the airplane in that environment, and the results of those simulations show that the airplane is effectively meeting its operational requirements.

ACTING CHAIR: Mr Burbage, did you send some information to the DMO on 16 February 2008 responding to various questions that were put to you by Stephen Gumley? One question, for example, was : 'What are the top 5 highest risks for the CTOL version of the JSF program today, and what are Lockheed Martin litigation strategies for each of these top 5 risks?' You, or someone from Lockheed Martin, said: 'uninformed or disbelieving critics diverting critical decision-making time to answering questions'. Does that ring a bell?

Mr Burbage : No, but it was four years ago.

ACTING CHAIR: Another question that was asked was in terms of the STOVL with the UK. The question was: 'I understand folks are quite concerned as it would appear that people have not been talking effectively with each other both inside Lockheed Martin as well as within the Lockheed Martin contract and customer groups.' The response was: 'This issue continues to surface among the technically uninformed as internet blogging continues to adversely influence sound technical debate and dialogue.' Then it was said: 'The UK is intimately involved in the technical progress of the STOVL configuration. It is in fact progressing quite well. STOVL handling qualities are both exceptional and revolutionary, and performance today is exceeding expectations.' This was according to the information sent by Lockheed Martin. Minor changes were made by Defence to remove classified information. But that statement is somewhat embarrassing, isn't it, given that the UK has now cancelled their STOVL buy and converted it because of problems with STOVL, and the statement was a glowing endorsement?

Mr Burbage : Actually I will stand by every word in that statement. The UK had full access to the airplane. The STOVL airplane had a great performance this year at the ship. It is on track. The secretary of Defence took it off probation a year ahead of time. We never understood why it went on. The UK is now in the process of reconsidering that decision and perhaps going back to STOVL. So the world dynamics changed under the program. The program has been underway for 10 or 11 years, but I stand by everything in that statement.

ACTING CHAIR: Was that a statement that you wrote? Do you recall it at all?

Mr Burbage : I do not. I do not recall exact words from—I do not know what the date was—four or five years ago. If you could give me the emails or whatever that is in—

ACTING CHAIR: Yes, and you can take that on notice. In terms of simulations and so on there was a report in Aviation Week and Space Technology called 'Raptor's edge', written by David Fulghum. It said the operational arguments focus on combat effectiveness against top foreign fighter aircraft such as the Russian Su27 and MiG29. Lockheed Martin and USAF analysts put the loss-exchange ratio at 30:1 for the F22, 3:1 for the F35 and 1:1 or less for the F15, FA18 and F16. Is that Lockheed Martin's view? It says here that that was both analysis by Lockheed Martin analysts and the USAF.

Mr Burbage : Time has moved on since 2008 and we know a lot more about this airplane now than we knew then.

ACTING CHAIR: It was in February 2009. What I am asking is: was that the understanding at the time in terms of the analysis that Lockheed Martin conducted?

Mr Burbage : We do a lot of analysis at Lockheed Martin. We use validated and accepted air force detailed campaign-level tools. We also put loop in simulations and high-fidelity cockpit type simulations. I do not know where that data came from—Gary may have a better feel for it—but that is not what the current assessment shows. Again, you are pulling information from before we had the full definition of what this airplane can do.

Mr ADAMS: These guys need to know where we are getting this—

ACTING CHAIR: I told them Aviation Week and Space Technology.

Mr ADAMS: Okay—sorry.

Mr Liberson : Our current assessment that we speak of is: greater than six to one relative loss exchange ratio against in four versus eight engagement scenarios—four blue at 35s versus eight advanced red threats in the 2015 to 2020 time frame.

ACTING CHAIR: What are those advanced threats?

Mr Liberson : I cannot get into the specifics of those advanced threats. They are classified.

ACTING CHAIR: This says Su27. My concern with that is that Su27 is an old aeroplane. You could be analysing it against camels. How are we supposed to take this when you are saying, 'We're not going to tell you what threats we're analysing'?

Air Cdre Bentley : Doctor, I think I have already answered that. We have provided that analysis to all the participating nations and to all their officials. They have all of the details of those threats and all of the details of those analyses. Each of those nations, each of those experts in those nations, have taken that analysis and have done analysis of their own and have come up with an agreed position, that the F35 is the best aeroplane for them.

ACTING CHAIR: The point that I am making is that here you have obviously reported, as has the United States Air Force, when you were wanting to sell a story. You have said what the threats were; you have said it is Su27 and MiG29. We are not asking for details of the exact geometry of the analysis, what assumptions were made about ECM or anything else. All we are asking is, for instance: was the MIG29 analysed; was the PAC FA analysed; was the J20 analysed? We do not want to know the specifics.

Air Cdre Bentley : Dr Jensen, if you were to receive a classified briefing, you would be able to understand what those threats were and how that analysis was done.

ACTING CHAIR: I am just asking for an aircraft type.

Mr Liberson : That is classified. I apologise.

Air Cdre Bentley : We are bound by the security regulations of both this country and the United States. Unless you have received—

ACTING CHAIR: That is really silly, isn't it?

Air Cdre Bentley : No, Sir, it is not really silly. We have a lot of international agreements with a lot of countries that enable this defence force to operate effectively. If we were to provide secrets openly—

ACTING CHAIR: That is saying: 'We have evaluated this sort of aircraft against ours.' Surely—

Air Cdre Bentley : then we provide the enemy with an understanding of what our capabilities are. Nobody does that, Doctor.

ACTING CHAIR: How is you saying 'We analysed this threat' secret?

Mr Burbage : To turn it around, do you think that all the first-tier air forces in the world would look at that analysis against an inferior threat? I do not think so. That is not why they are buying the airplane.

ACTING CHAIR: Let me put it this way: I have it on very good authority, for example, that in the UK—

Mr Adams interjecting

ACTING CHAIR: No. I do not want to name the person.

Mr ADAMS: It was your source.

ACTING CHAIR: It was a retired air marshal in the RAF. In terms of analysis that was conducted by DERA on the Typhoon versus advanced Sukhoi Flankers, they set the thing up so that in the initial exchange the exchange ratio for the Typhoon was a good exchange ratio, but they shut down the simulation at the time that the Typhoons that were Winchesters and were running from the Sukhois were about to get shot down by the Sukhois chasing.

Mr Burbage : We do not do those kinds of simulations. That is not the way we do simulations—we do not give one side an advantage or a disadvantage; we put the real data from the airplanes in the simulation and they run up many, many runs to get the numbers we are talking about.

Mr Liberson : And it is very important to note that our constructive simulations that Mr Burbage talks about without the pilot in the loop are the lowest number that we talk about—the greater than six to one. When we include the pilot in the loop activities, they even do better when we include all of that in our partner manned tactical simulation facility.

Mr Burbage : We actually have a fifth-gen airplane flying today. The F22 has been in many exercises. We have one of the pilots here who flew it and they can tell you that in any real-world event it is much better than the simulations forecast. We have F35 flying today; it has not been put into that scenario yet, but we have very high quality information on the capability of the sensors and the capability of the airplane, and we have represented the airplane fairly and appropriately in these large-scale campaign models that we are using. But it is not just us—it is our air force; it is your air force; it is all the other participating nations that do this; it is our navy and our marine corps that do these exercises. It is not Lockheed in a closet genning up some sort of result.

ACTING CHAIR: Post 2015 and 2020 you have stealth on stealth. How are you going to kill either PAC FA or J20?

Air Cdre Bentley : We cannot answer that question, just as we cannot answer the threat question, because we get into classified areas very, very quickly.

ACTING CHAIR: It seems to be a very convenient excuse.

Air Cdre Bentley : No, it is not an excuse. All of the defence officials who are appropriately cleared in all of the nations that are participating in this country know exactly what we have briefed, what those briefings entail and what the analysis entails, and they have chosen F35. If you are purporting to be a huge—

ACTING CHAIR: So what you are saying is, 'Believe us; we've got all the classified data in a brown paper bag'—

Air Cdre Bentley : Believe the nine best air forces in the world as far as their operators and their analysts are concerned and I think that you will come to realise that it is not us telling the story; it is them telling the story to their governments and their governments making a decision to go forward with this aeroplane.

Mr ADAMS: Can we move to another area?

ACTING CHAIR: Thank you for your presentation today. I have heard from the Australian government's perspective the through-life support package for the aircraft and how it is going to work, but I am interested in Lockheed Martin's perspective. Would you talk through your understanding of the mix of Australian uniformed people and Australian industry versus USAF versus Lockheed Martin and what roles they will play in the design-engineering side of things, the line maintenance depot or deeper level maintenance, particularly in things like weapons system software support and where the issue of sovereignty goes in that area.

Mr Burbage : There was a study done over the last several months with Lockheed Martin and the Australia next generation air combat capability office. We have just recently submitted that study. It goes into some detail for the Australian sustainment activity. The airplane will be sustained in country. There will be sovereignty in all the areas that Australia has made it known that it wants sovereignty. We do have a global aspect of the program where we manage spares in the supply chains on a global basis to drive the costs of that down, but all the service is delivered locally. It is our intent to have that service delivered by Australian industry as a team partner with us on the program.

The US air force has its own depot requirements to do US airplanes in. There is no requirement to do anything with partner airplanes in those depots. That capability is available if partners choose to share it. Our understanding is that Australia wants to be autonomous and we are on a plan now to put full capability here in country. So I think there is a very detailed plan. Ambassador Beazley and Air Vice Marshal Kym Osley spoke at a gathering to the partner countries a week ago Friday and said they were very pleased with the study and that it actually came in very close to the estimates they had made four or five years ago for the cost of sustainment here. We are in the process right now of identifying the facilities and the different investments that will be required to put that capability in place.

There will be a training centre here. That training centre can train Australian pilots or it can be made available to train other pilots if Australia wishes to do that. If there are other airplanes operating in the region, they can get maintenance done in these facilities here too if they so desire. So I think it is a very comprehensive plan and I would refer you to the study itself, which was just delivered in the last week or so.

Air Cdre Bentley : With regard to the requirements, the Royal Australian Air Force and DMO are setting up how they want to run the contract and they are specifying manpower-workforce arrangements.

Senator FAWCETT: Weight margins on the aircraft: in terms of length of useful life of an aircraft, modifications, weight margin and also power available are critical factors, and my reading of available literature indicates that there is a very small weight margin available. Could you comment?

Mr Burbage : Weight is most critical on the short take-off, vertical-landing jet. That is the one that has the toughest requirement for taking off from and landing on small ships. You saw in the movie that we did that, this year. We predict the weight on that airplane to grow at about three per cent per year throughout the rest of the test program and it could grow some more throughout its life if more capability that has substantial weight goes on the airplane. If you look at the STOVL jet and you look at our weight charts, which you are more than welcome to see, we have now gone two years without any weight increase on the STOVL jet, and that is while accommodating engineering changes to the doors, which we have replaced with heavier doors, and other changes that were made to the airplane. We manage the weight very tightly on that airplane—for good reasons, because it needs to be. The other two airplanes are not as sensitive to weight. We are actually probably several thousand pounds away from the first compromise of the performance requirements of those two airplanes. We do, however, manage the weight very tightly on all three airplanes. The metric that we look at is when the weight growth curve levels off, that means your design has stabilised. You are no longer making lots of changes to the design. All three airplanes are now in that level-off phase. The best one is the STOVL where you can go back and see that we have not increased any weight at all in a full two years.

Senator FAWCETT: So having reached that steady state, you are saying you are some thousands of pounds away from—

Mr Burbage : On the non-STOVL jets.

Senator FAWCETT: So the conventional take-off and landing—

Mr Burbage : The key performance requirements that are weight-dependent have large margins still ahead of them. On the STOVL the key performance parameters are much tighter to the weight, because it is more physics than aerodynamics.

Senator FAWCETT: I have one last question, if I can. Speaking of the key performance indicators, obviously for the overall program they are cost, schedule and performance. In cost and schedule we have seen a number of changes and rebaselining to allow for things that have happened. In terms of the KPIs against your original ops requirement document—you do not have to disclose which ones have not been met—but at this point in time have all of the original essential requirements from the ORD been met?

Mr Burbage : We have 16 key performance parameters on this airplane. Half are logistics and sustainment-related, half are aeroperformance-related and one or two are in classified areas. We have an oversight body called the Joint Requirements Oversight Council, the JROC, that looks at those requirements every year and makes decisions on them—'Are we going to meet them, are we not going to meet them? If we are not going to meet them, what is the impact of that?' We have one this year which was the range of the Air Force airplane which had a specific set of ground rules associated with how that range is calculated which is not similar to either of the other two airplanes. The airplane flies a large part of its mission at a non-optimised altitude in the original calculation. The JROC agreed to change the ground rules to fly that airplane as the other two were flown and, when that happened, the airplane had excess margin to the range requirement. For any performance-related requirements, we artificially penalise the engine by five per cent fuel flow and two per cent thrust. Those margins are given back as we mature the design and get more and more solid on exactly what it is going to do. They are there for conservative estimation up front. We have not taken back any of those margins yet so, when those margins are taken back, the airplane will continue to be well in excess of its basic requirement. The airplane is meeting all of the other requirements today.

Senator FAWCETT: So have those requirements like schedule and cost been rebaselined, or are they are still the original ORD?

Mr Burbage : Schedule and cost are not KPPs. I thought you were talking about performance.

Senator FAWCETT: No, I recognise that. You have rebaselined schedule and cost as you have gone along. What I am asking is have the KPIs been rebaselined and does the statement you just made apply to today's KPIs or does it also apply to the original ones?

Mr Burbage : To the original set. Today, all the KPPs are green because that ground rule was changed to be common across all three airplanes on the range. But we have not taken back the margins that are being withheld to make sure those performance predictions are conservative. We are not going to have degraded engines. We basically measure our performance characteristics with a highly-degraded engine capability. Our actual flight test information coming back from the engine is better than nominal. These calculations are not done using actual airplane test data. They are done using an artificial penalty that gets paid back as the design matures.

Senator FAWCETT: I have other questions but I will seek time at the end.

Mr ADAMS: There are a lot of people throwing a lot of negative things at this aircraft. Some of them have probably got their own reasons to do that. I am interested in whether the systems and, I understand, the software around the helmet are on time and whether that has been developed satisfactorily, or is it behind schedule?

Mr Burbage : The helmets specifically or software in general?

Mr ADAMS: Software around the helmets, in that area.

Mr Burbage : We have two basic pieces of software in the airplane. We have one that controls the airplane—the flight controls and the systems that run the airplane. The other controls the mission systems. There are two different phases. The one that controls the airplane has been in test for several years. It is very stable. We have not yet aborted a single flight through a software problem. I do not think there is another airplane in the history of flight testing that can have that said of it. On the mission system side we have developed a software in blocks and 80 per cent of our overall software is flying today on the test airplane. We have 20 per cent left to finish. That 20 per cent has gone through the writing and the coding. It has yet to go through integration and tests.

The helmet itself is an element of the mission system. It is new technology that allows the sensors on the airplane to pull up information and project that on the pilot's visor. The helmet has been flying on the airplane since 2007. Only seven of the 1,800 flights that we have had were without the helmet—all the others have had a helmet. The pilots like the helmet and say it is performing quite well. The question in front of the group today is whether, when we get into night flying, the acuity of the images that are pulled in from the sensors on the outside of the airplane are accurate enough to do an all lights-out landing on a small ship in a rough sea state, or to do tanking behind an airplane that has not lights on. Those are the two high gain tests.

Today, there are night vision goggles in use but this is a 5th-gen airplane and we do not want to have night vision goggles if we can avoid them. We are currently looking at an alternative path that, if those sensors are deemed not adequate for those two tasks, there is a possibility to use some night vision goggles. But the helmet is tracking. You saw the pilot wearing it in the movie and that is the actual helmet he wears in the airplane. All of these are part of the development program and the helmet is part of the mission system. It no longer just protects the cranium of the pilot.

Mr McCoy : Al Norman, the chief test pilot, told me that the visual out of this thing is very significantly different compared to night vision goggles, where you look through a tube. He said that they literally turn night into day—it is incredible.

Ms BRODTMANN: Going back to the questions that Senator Fawcett and Mr Adams asked regarding through-life support, I am interested to know where the through-life support for the ICT will be done. Will it be done in Australia?

Mr Burbage : Will the ICT?

Ms BRODTMANN: The ICT software.

Air Cdre Bentley : Parts of it will be done in America. Depending on the mission system software, potentially some aspects of that may be done in Australia. There is a study going on at present looking at that aspect.

Ms BRODTMANN: When is the study due?

Air Cdre Bentley : Towards the end of this year.

Ms BRODTMANN: Okay, but they are exploring options of largely doing it here?

Air Cdre Bentley : They are exploring a range of options on the way forward.

Mr Burbage : The program is designed for all nine partners to upgrade the capabilities of the airplane by a consensus ever two years. We will finish the current configuration and tests and the airplane will reach initial operating capability. Every two years after that we will do an upgrade to the airplane. All the partners will participate financially and all the partners will participate in deciding what those capabilities are.

Ms BRODTMANN: And, subject to the study, all the partners will participate in deciding on work possibly done in their own country or sharing the load?.

Air Cdre Bentley : It is exactly the same way as the air force operates today for C130 and for F18. Lots of the main parts of the software are done in the US but certain parts of it are done in Australia.

Mr McCoy : We are talking Super Hornet, C130J.

Senator FAWCETT: As for the Classic Hornet.

Air Cdre Bentley : For the Classic Hornet, a lot of that software is written in the US and modifications are made to the program for the Australian aspects of that program.

Senator FAWCETT: Which is not done for the Super Hornet.

Air Cdre Bentley : It is not done for the Super Hornet.

Senator FAWCETT: I do not believe the plan is for that capability to be here for the JSF.

Air Cdre Bentley : No. Just like for the Super Hornet, it would be highly, highly expensive to try to put that capability into Australia and there probably would not be the expertise in the numbers required to be able to sustain that type of capability.

Mr Burbage : You also quickly lose interoperability and the synergy of keeping all of the coalition on the same capability; you have a one-off aeroplane pretty quickly. It actually happened on the F18 with Spain, if you are familiar with that: the aeroplanes could not even fly because they got in and tweaked their own software. It is a very challenging thing.

Senator FAWCETT: It also gives you a sovereign ability to integrate different weapon systems.

Mr Burbage : We are not talking about integrating weapons and things like that. We are talking about the core of the basic software.

Mrs GASH: It must have been six years ago we were in your factory in the United States and we saw the guts of it being built. Going back to Ms Brodtmann's question, you emphasised the fact then that Australia was going to have a number of tender projects for parts of the aircraft. Is that still in the pipeline? Many of us are from country areas, where we have some people already doing work for you. But is that still going to happen?

Mr Burbage : Yes. Australia today has $300 million in contracts already in place. Projected forward, it is much higher than that; I think it is up to about $4½ billion to $5 billion over the life of the program. As we go up into production ramp, it is all direct work on the aeroplane. Your industries are providing some of the leading innovation to the program, and I had a chance to speak to this earlier today, in both how we do metal machining of parts and how we do composites. The leading edge of that technology is here in Australia, working projects with us that we are funding with them.

There are four major projects here in Australia. The ultimate one is building the vertical tail for the aeroplane which will go on everyone's aeroplane, not just Australia's aeroplane. There will a second source for that. We are doing very advanced expendables in the area of flares which will be done by a company called Chemring down here. We do a lot of metal machining through a variety of four, five or six different manufacturers. Advanced composite structures are being done up in the Bankstown area, both for Northrop Grumman and for Lockheed Martin. I did not mention the engine because the engine is not part of our contract, but some of the advanced machining work for the engine is being done down here also. We are also doing weapon pylons at a company called Ferra up in Brisbane. All those companies are actively building parts for the aeroplane today and we will carry them forward as suppliers going forward. The only reason a supplier would not keep that work is if they fail to perform in terms of cost and quality.

Air Cdre Bentley : Right now there are about 27 companies on contract or on long-term agreement and we expect those types of things to continue. It will probably expand further once the sustainment work is put into Australia.

Mr ROBERT: What is the total buy across all nine countries in terms of aircraft?

Mr Burbage : The current buy is programmed at 2,443 for the US and about 700 for the eight other participating nations. About 3,143 is the number we use; whether it is plus or minus, that is the number in our planning. In addition to that, we have entered into an agreement with Israel; and Japan selected the aeroplane late last year; and we are in a competition right now in the Republic of Korea. None of those airplanes are in those numbers that I just mentioned.

Mr ROBERT: The Secretary of Defence has, I think, deferred a hundred and something aircraft in the latter years.

Air Cdre Bentley : It is 179 over the FYDP.

Mr Burbage : Over the next five years of the defence budget. The austerity program in the US defence budget over the last few months moved about $500 billion out of a 10-year period, and half of that in the first five years. We were one of the programs that made a large contribution to that.

Mr ROBERT: My understanding of what President Obama said when was here was that none of those cuts would impact that Asia-Pacific or capability in the Asia-Pacific, is my read of that statement. So, in terms of JSF coming into the Asia-Pacific, none of those cuts would impact that move of those squadrons here. Is that a fair statement?

Mr Burbage : I think that is correct. The first Asia-Pacific deployments for the US Marine Corps will be in 2015. The air force will be here in about 2017 and the navy about 2018.

Mr ROBERT: So those 179 deferrals will not impact those squadrons?

Mr Burbage : I do not know the detailed lay-down of the services; I just do not have that information. That will impact our ability to stand up squadrons on the schedule that was originally programmed, but the initial squadron deployment, through the US and all three services, is to this region. You probably know that there will be a US Marine Corps MAGTF up in the north. So I do not think there will be any slowdown in that. The first aeroplanes for Australia arrive here in 2017, and the first aeroplanes on today's schedule for Japan would arrive in Japan in about 2018. So there will be a significant footprint, not the least of which will be the US forces here in the Asia-Pacific at about the time Australia is taking their deliveries back here.

Mr ROBERT: Well, there are 60,000 US troops here. Thank you, sir.

Mr Burbage : You are welcome.

Senator JOHNSTON: The only question I had was on price. There is a lot of scuttlebutt about where the price is going per unit—the fly-away price. What is the situation with Australia and the price? Is it fixed? What is the story?

Mr Burbage : For all of our contracts from here forward—and the first Australian aeroplanes are part of the sixth production line—all of those production lines will be a fixed price. We are in a fixed-price contract today on the fourth production line. The international buy will be added to the US buy and will come to us in terms of a contract, and everybody in that annual buy pays exactly the same thing. So there is not a penny more or a penny less between Australia and the US government—the US Air Force—for that configuration of the aeroplane. We are on a cost-reduction curve. We have come down about 42 per cent over the first four production lots in the fly-away cost of the aeroplane. That ramp gets flatter when the volume does not come to increase the volume because a lot of our factory costs are fixed costs that need to be spread over larger and larger numbers. That is why you will hear me keep saying that production is important: at the practical moment, we need to keep the program on track to get the economies of scale that it has the potential to deliver.

Senator JOHNSTON: I am interested in the unit cost reductions over a large number of planes. South Korea, Japan and Israel roughly take the numbers to what? Given all the assumptions that we make are positive and they take what you think they will take, what sort of numbers are we talking about? Four thousand? Three thousand eight hundred? Can you tell us that number?

Air Cdre Bentley : Are you talking total numbers?

Senator JOHNSTON: I am talking numbers of aeroplanes—total numbers.

Mr Burbage : We are predicting that it will be up over 4,000. Just this month we are delivering our 4,500th F16, and this started out as 900 aeroplanes. You heard the numbers of aeroplanes we are replacing; we are replacing a large part, if not all, of the multirole fighter fleet across the Allies. So there is upside potential. There is even upside potential in the eight partnering nations. Even though we are all in an austerity move right now, there are several nations that have indicated their numbers are going to go up.

Senator JOHNSTON: I think we only produce 247 F22s.

Mr Burbage : One hundred and eighty seven.

Senator JOHNSTON: One hundred and eighty seven. Thank you. That is the number. Four thousand as against that.

Mr O'DOWD: We were told that there was a problem with the night refuelling of the F35 in the air. Has that been resolved?

Mr Burbage : With the refuelling?

Mr O'DOWD: Yes, the refuelling of the F35 at night.

Mr Burbage : We have just started flying the aeroplane at night, just now. We have not done a refuelling at night. You may be referring to the tasks that were done in the simulator with the helmet. It is a high-gain task. We are not tanking on a blacked-out aeroplane right now, but one of the tasks in the future would be to be able to tank behind an aeroplane that has no lights on and see whether or not the helmet gives a pilot enough visual acuity to maintain station while he is being refuelled. So that is all in simulation now. We are not actually doing it in flight tests. All of the aeroplanes, all three versions, have been fully qualified behind the tankers, and there is no problem tanking the aeroplanes themselves. It is a matter of whether the pilot can maintain his station using the sensors on the aeroplane that are displayed on his helmet.

Dr JENSEN: In terms of integrated air defence systems, what is the performance of your aircraft like against some of the systems that are coming into place such as the S400 and the coming S500, against VHF AESA radar, over-the-horizon radar, L-band leading edges? Have you done work on that?

Air Cdre Bentley : Dr Jensen, I will go back to the statement I made earlier. We have studied a range of threats for a range of partners, and their senior officials have all had access to all of that information. It is classified in nature and, unfortunately, because of where we are and who is present, we cannot—

Dr JENSEN: What is interesting with this is that the USAF test facility for measuring radar cross-sections and so on is S-band and higher frequencies. So you do not have a test facility for L-band, VHF and so on.

Mr Burbage : Is the implication that the Air Force is testing the wrong thing?

Dr JENSEN: The implication is that the frequencies that you are looking at were relevant frequencies probably 10 or 15 years ago, but the fact is that you are getting highly mobile VHF AESA radars, which will be detecting JSFs and other stealth aircraft at tactically significant ranges.

Mr Burbage : I have got to believe that the services that are going to buy this airplane and fly it for the next 35 years understand what you just said. It is the evolution of the threat going forward. The airplane also has an evolutionary plan going forward. That is about all we can really say about that, but if the inference is that the air forces and navies that are buying the airplane are not considering any future threats, that is a bad assumption.

Dr JENSEN: You said quite explicitly that in the last two years the STOVL version had seen no weight increase.

Mr Burbage : That is correct.

Dr JENSEN: The QLR charts seem to indicate differently. I am referring to the quick look review that was conducted last year.

Mr Burbage : I could show you the chart if I had my computer here. We were actually planning to.

Dr JENSEN: I will show you the chart. I am afraid it is a bit small, but you can see there is January 2010 and there is January 2012. Clearly there has been a weight increase.

Mr Burbage : This increase right here is a ground rule change, not unlike other ground rule changes—when the weight of the electro-optical targeting system was added in, it is just a step function increase. If I bring this down and I measure that point directly back, it goes back two years to intercept that curve there.

CHAIR: Can I just pause there. For the benefit of Hansard, it is impossible to put up on record what you are talking about.

Dr JENSEN: I will get a copy of that chart and provide it so that it can be tabled.

Air Cdre Bentley : That quick look report is a US official use only chart. As such, it has not been released and therefore for us to comment specifically on it is quite out of the ordinary in this type of environment.

Dr JENSEN: Okay. In terms of the STOL weight, would it be true to say that the empty weight now is over NZW?

Mr Burbage : I do not know. I can find out for you. I will take it for the record and provide an answer to you.

Dr JENSEN: If you could take that on notice then.

Mr Burbage : The STOL weight has been very stable and the airplane is meeting all of its performance requirements, so I am not sure what the question is.

Mrs GASH: I have a very naive question—I am a female after all. How do we handle the bad publicity that you guys are getting on this aircraft? How do you expect us to handle that when we do not know all the ins-and-outs like you do? I come from HMAS Albatross, and you have got a place down there, and I get this regularly—not on a daily basis, but it is fairly regular. How do I answer that?

Mr Burbage : That is a really good question. If the anti-bodies would somehow get aligned with what is really happening on the program, there would be a lot less negativity, but there is awful lot of negative news not based on facts about what is happening in the program. So we are constantly in a defensive mode, just like we are here in this meeting right now. We are in a defensive mode because of allegations that have been made about the program. We try to put out positive word—we have put out videos and we have a website—but nobody wants to print that. They want to print that there is a problem with the program. We are a large development program and we do have a lot of activity going on around the world. We have lots of squadrons standing up. We are in the middle of flight tests and are at the end of software development. There are a lot of things going on. On a big development program there are always things that happen and we fix them, but they get taken out of proportion and out of context in some of the reporting.

Mrs GASH: I do not envy you.

Mr Burbage : I do not know how to address it other than the effort that we do make to get the positive news of the program out there. I have a communications staff right here with me in the room. We try to get that information out to people, but whether people will listen and accept it is another question. Should it be challenged? Of course it should be challenged and it is being challenged, but it is being challenged in areas that, in my opinion, the program is doing quite a bit better in than some of the allegations being made about it suggest.

Mrs GASH: I hope that the next lot of visitors, who are coming to you soon, will be as impressed as I was. But I do not understand all the bits that Dennis and others are asking you, so bear that in mind.

Mr Burbage : Right. I can tell you that I honestly look forward to hosting all of you at Fort Worth so you can talk to the pilots, see the airplane and get answers to your questions visually as opposed to me trying to tell you what is happening with the program.

CHAIR: With respect to the question Mrs Gash asked about bad press, is that only coming from one sector or is it worldwide that you are getting that position?

Mr Burbage : There is support and opposition in every nation, including in the US, and it comes in different flavours. I think the answer is no; it is global. With the blogosphere and the speed of the internet it is very rapid, and misunderstandings or inaccuracies can tend to flow through the world at the speed of light.

Air Cdre Bentley : I think the urban myths get out there and stay out there, and it is very hard to get rid of them. One of those urban myths, for instance, was that when we landed on an LHD the downwash would blow people off the deck and it would melt the deck. Neither of those things were true. However, we were seeing comments that the aeroplane had scorched the deck, because there was a black mark on the deck. It is very hard to try to convince the sceptics that these things are not happening, and the proof of the capability is being put out there. When you have urban myths on the internet they are always there; you cannot remove those myths from the internet despite what you say.

Dr JENSEN: My concern is that we have been hearing that this program is hunky-dory—that things are going well and that it has great capability—for a decade now. We have had to spend $6 billion for 24 Super Hornets to fill the capability gap due to the program's IOC being at least six years late in Australian terms. Originally it was slated for 2012. That has been stated in Hansard by the Chief of the Defence Force and the Chief of Air Force over the years, and we have seen the slipping. Now we are talking about an IOC in late 2018, and I am willing to bet that that will slip further. When you are getting these significant slips in schedule, when you are getting quite large increases in the costs associated with the program, how are we supposed to take assurances at face value?

Mr Burbage : I would like to correct a couple of points you just made. I have been with the program since before it started, and the original Australian first aircraft delivery was 2012. Now the Australian first aircraft delivery is 2014. So it is delayed two years from first aircraft delivery. I do not think there was ever an IOC in 2012. That was the year of first airplane delivery in your original plan.

Dr JENSEN: If you look at the Hansard in the parliament, clearly the Chief of the Defence Force and Chief of Air Force thought differently.

Mr Burbage : I can give you the schedules—we have the schedules—and that is the way the program was set up in the beginning. I think blaming the F35 for the purchase of the Super Hornets is probably not quite accurate either. I do not know; I am sure it was one of the factors that went into the decision process, but there was an earlier than expected standout of F111s and other things that contributed to that decision. It was not just the Super Hornets.

Dr JENSEN: I will speak to the then defence minister about this.

CHAIR: That brings the meeting roughly to a close. I thank you for your attendance here today. If you have been asked to provide any additional information or material please forward that to the Secretary. You will be sent a copy of the transcript for your evidence, to which you may make corrections of grammar and fact.

Resolved (on motion by Mrs Gash):

That this committee authorises publication of the transcript of the evidence given before it at public hearing this day.

Committee adjourned at 18 : 44