Senator Newman asked the Minister for Defence, upon notice, on 8 February 1995:

  Given that approximately 89 per cent of the Army Blackhawk fleet at Townsville was recently revealed by the department to be inoperative:

  (1) Did the source selection process leading to the selection of the S70 Blackhawk helicopters include calculations of the annual and through-life support costs based on data supplied by the tendering companies; if so, (a) what was the estimated annual and through-life cost of operating the Black Hawks, based on the Sikorsky data including: (i) frequency and cost of maintenance cycles; (ii) nature and cost of spare parts requirements; and (iii) frequency and cost of airframe inspections for corrosion and fatigue; and (b) were guarantees regarding the estimated and life-cycle operating costs required from Sikorsky as part of the contractual arrangements; if not, (c) on what basis was the impact of Blackhawks' operations on the Australian Defence Force's recurrent costs estimated; and (d) what data sources were available to assess future impact of Blackhawk operations on the Army's running cost base.

  (2) (a) What variation has occurred from the estimated frequency and cost of maintenance of the Blackhawk Helicopters; (b) when was this variation discovered; (c) what is the impact of this variation: (i) in terms of annual and through-life costs, (ii) in terms of the helicopters operational performance envelope, and (iii) in terms of the helicopters future operational availability.

  (3) (a) At what dates were the Blackhawk helicopters (which were unserviceable at Townsville on 25 January) declared unserviceable; (b) what was the cause of each being unserviceable; (c) in each case was each defect discovered during prescribed inspection routines or as the result of a flight incident report; and (d) in each case, how long is estimated that the defect had been in existence before discovery.

  (4) (a) When was it decided to use long-range fuel tanks on the Blackhawk helicopters; (b) was operation of the Blackhawk with long-range fuel tanks an operational requirement evaluated by the project team during the source selection process; and (c) were the tanks acquired at the time the helicopters were procured.

  (5) Did the department advise the Government about the need for long-range fuel tanks; if so, when; if it did not provide this advice, why not.

  (6) Did the department provide Sikorsky with a full briefing of the intended uses of the Australian Blackhawks, in particular, did the department inform Sikorsky that it was likely that the Australian Blackhawk helicopters would be equipped with long-range fuel tanks on a frequent basis; if not, why not.

  (7) If the department did consult Sikorsky on the intended use of the Blackhawks including the use of the long-range fuel tanks on a frequent basis, did the department seek from Sikorsky a forward assessment of the effects that these tanks would have on the performance, the air frame and life-of-type (that is lifespan) of the Blackhawks; if so, what was Sikorsky's response; if not, why not.

  (8) If the department did not provide Sikorsky with an outline of the intended uses, did the department accept performance and life-of-type data based upon United States operating requirements and experience.

  (9) If the department was aware that the use of long-range fuel tanks would compromise the integrity of the Blackhawk airframe, did it fail to warn the Government that the tanks would cause costly damage to the airframe of the helicopters.

  (10) Given that the Government has decided to allocate additional funds for the procurement of Blackhawk spare parts, will these funds come from: (a) existing projected Army operating costs: if so, from which areas and what are the totals from each area; and (b) from unprogrammed increases in the defence budget.

Senator Robert Ray —The answer to the honourable senator's question is as follows:

  (1) (a) (i) The original Blackhawk maintenance cycle included four routine services; R1, R2, R3 and R4 which were to be conducted every 10, 25, 100 and 400 hours respectively.

  Through life costs assessments were conducted during the source selection process and showed that routine servicing required approximately 5,500 maintenance manhours per 1,000 flying hours.

  (ii) $75.9 million was allocated for spares for the first three years of operation. This is consistent with the normal expectation that initial spares would be approximately 15% of the cost of the prime equipment.

  (iii) Inspections for corrosion and cracking are included in the major routine services ie R2 and R3 and previously R4.

  (b) The figures provided by Sikorsky for life-cycle costings were estimates and depend to a large degree on the operational usage of the aircraft and the particular environment in which it operates. It is not possible to obtain contractual guarantees on operating costs for military aircraft as the customer's variations in operational requirements are beyond the contractor's control.

  (c) The impact of Blackhawk operations on recurrent cost estimates was calculated against a baseline annual usage rate of 7,370 hours. Planning allowed the annual usage rate to rise in increments to a mature rate of 9,300 hours in financial year 1994/95.

  (d) Initially, the main sources of information were Sikorsky and the US Armed Forces. These have since been supplemented by data gained from a survey of Australian use of the Blackhawk. Maintenance and spares requirements are continually updated as changes are made in the achieved and anticipated usage of the fleet, particularly the number of hours flown annually.

  (2) (a-b) The following table shows the original and current frequency of the maintenance cycle.

Original

maintenace

Current maintenance schedule schedule

R1, 10 hours R1, 25 hours

R2, 25 hours R2, 100 hours

R3, 100 hours R3, 500 hours

R4, 400 hours

  The content of maintenance schedules continually evolves as new requirements become evident, and old requirements change or become redundant. The maintenance cycle is structured to obtain the most efficient use of time that an aircraft spends in maintenance, and to ensure that the availability of deployed aircraft for operational task is maximised.

  The manpower required for the current schedule is approximately 4,870 maintenance manhours per 1,000 flying hours and represents a 10% reduction from the original schedule. This does not include the requirement for special repairs, such as corrosion and cracking.

  The current maintenance schedule was introduced in 1992, and last amended in November 1994. The frequency of routine maintenance has been reduced. However, the time spent by aircraft off-line has increased. The last formal maintenance study conducted was based upon 1993 figures. Since then, overall maintenance manhours have increased as a result of:

  A corrosion control program is in place requ iring the more frequent washing and inspection s (every 14 days). Corrosion repair has increas ed, and is generally conducted every 500 hours .

  Blackhawks are now subjected to vibration analysis every 100 hours. This allows the rotor systems to be adjusted to minimise the vibratio ns, reducing airframe fatigue.

  Reduced component retirement times causin g more frequent replacement of some flight critical components.

  As R1 and R2 servicings are performed in-house it is not possible to identify the discreet costs for these routine services. However, R3 servicing is carried out under contract to Aerospace Technologies of Australia Ltd and, on average, there are 13 services carried out each year at an average cost of approximately $58,000, including corrosion repair.

  (c) (i) A review is currently being conducted to examine past funding levels, and use this data to forecast future funding requirements. It is probable overall costs will increase over the current Five Year Defence Program due to the need to return spares holdings to acceptable levels, effect the repair of repairable parts, and overcome the corrosion and cracking problems.

  (ii) It is too early to determine if there will be any continuing effect on the performance envelope, particularly until the cracking problem is resolved. It is unlikely that the performance envelope itself will change although the frequency that some manoeuvres are conducted within that envelope may be reduced. Army has already restricted some manoeuvres and use of the External Stores Support System (ESSS) until more data is available.

  (iii) The shortage of spares, combined with the long procurement lead times for some spares, will not permit Army to substantially recover from the current low aircraft availability until at least late 1995.

  (3) (a-c) The aircraft were declared unserviceable between 26 September 1994 and 25 January 1995. Specific details will be provided separately to Senator Newman.

  (d) Any answer would be speculative.

  (4) (a) The Request for Tender (RFT) for the supply of Utility Helicopters for the RAAF included a requirement that the aircraft should have a ferry range of 1100 kms, with a 30 minute reserve. There was no indication of the percentage of time that was to be spent in this role.

  During the tender evaluation phase, it was assessed that the Blackhawk could adequately fulfil the role if fitted with External Stores Support Systems (ESSS) and four external fuel tanks. As such, three ESSS and 14 x 230 gallon fuel tanks were ordered under the initial Phase 1 of the Blackhawk procurement of 14 aircraft.

  The RFT for Phase 2 of the Blackhawk acquisition was issued on 4 December 1986. This RFT required that the helicopter must be capable of self deployment to anywhere in Australia. It was determined that this capability was best provided by ESSS with four 230 gallon fuel tanks. 25 ESSS and 100 fuel tanks were ordered in Phase 2.

  (b) Yes.

  (c) 14 x 230 gallon fuel tanks were procured under the Prime Contract. An additional 100 x 230 gallon were purchased directly from Sikorsky's sub-contractor at the same time. All ESSSs and fuel tanks were delivered during February-May 1989.

  (5) The Government was formally advised of the requirement to acquire the ESSS with fuel tanks as part of the Cabinet Submission seeking project approval for the acquisition of 39 Blackhawk helicopters. That approval was given on 8 May 1987.

  (6) Sikorsky was briefed, in general terms, on the ADF's proposed usage. Sikorsky's technical specification assumed use of the full external tank ferry configuration for 3% of the aircraft's life. The ADF's operational requirements exceed US Army experience. An US Army report on ESSS configuration was supplied through Sikorsky in late 1987. The impact of Australian ESSS usage is being addressed by ongoing studies by Sikorsky and the ADF.

  (7) In addition to the US Army material provided in 1987, Sikorsky suggested that, in view of the likely ADF usage of the Blackhawk, studies and ongoing assessment of the use of the ESSS was required to validate, amongst other things, data on component replacement times.

  (8) Initially, US Army information on performance and life-of-type data was used.

  (9) The current problem concerning the stress on parts of the airframe as the result of use of the ESSS was not foreseen. When it was ascertained that use of the ESSS need to be modified, appropriate action was taken by Army. A program to correct the present cracking problem is being developed.

  (10) (a-b) Initial funding of $8 million for Blackhawk spares has been provided from Army's allocation. The funds were available due to an underspend in the personnel area. In addition, $13 million has been committed for financial year 1995/96 and beyond. A comprehensive review of funding requirements over the Five Year Defence Program is currently under way. The source of the additional funds has yet to be determined but will be met from within existing Defence Outlays.