Defence spent about $90 million on a planned procurement of a geostationary earth orbit (GEO) satellite communications system before the process was halted earlier this week.
The department on Monday said the tender process for phase one of JP9102 – which had Lockheed Martin engaged as preferred supplier – had ceased.
Air Vice-Marshal David Scheul told senate estimates that “about $90 million” out of an initial budget of “$150-odd million” had been spent to date.
“Roughly that works out at about $40 million of CASG [Capability Acquisition and Sustainment Group] related costs, which includes costs associated with the tender activity, our internal legal costs, [and costs] for workforce,” Scheul said.
“About $3m [went] on ICT work with the Defence Digital Group; just shy of $3 million with SP&I [Strategy, Policy, and Industry Group]; about the same amount of money with DSTG [Defence Science and Technology Group]; $4 million with security estate group for additional facilities work; and roughly about $40 million for the capability manager to do their work as part of the project delivery.”
Scheul added that a “small payment” was also made directly to Lockheed Martin “as part of the offer definition and improvement activity to fund some of Lockheed’s costs.”
This included “facility-related activity for a venue for us to conduct that work in”, he said.
Asked what costs Lockheed Martin had incurred to date, Scheul said he understood the vendor “has made a considerable investment as part of this activity.”
“I think it would be up to them to articulate how much that would be,” he said.
Senators also raised the prospect of a long tail of investments made by players in the defence industry supply chain that had some association with aspects of the project.
Project continues
The decision to axe this version of the tender process was attributed to advances in satellite communications technology and evolving threats against certain types of satellite infrastructure.
The project still exists, as does the need for a next-generation satellite communications system.
Defence will now pursue “a multi-orbit capability” straight away, comprising “geostationary, medium and low earth” orbit satellites, secretary of the Department of Defence Greg Moriarty said.
The intent of JP9102 had been to have a multi-orbit capability eventually, after multiple project phases, but this aim is now to be fast-tracked.
“What has changed since the Defence Strategic Review and the National Defence Strategy … is we have an awareness that we require greater resilience,” chief of joint capabilities Lieutenant General Susan Coyle said.
“This was phase one with the GEO level. We determined that that wouldn’t be adequate and that we needed to have multi-orbital approach sooner, so in addition to the current GEO approach that we were undertaking through tender with Lockheed, it was a decision made by us that we should provide advice [to the Defence Minister] to suggest that with the growing threat and evolving technology that we would propose to go to a rapid multi-orbital solution quicker.”
Defence officials noted that the US is similarly going down the path of a multi-orbit system, although senators questioned the extent to which this is production-ready, and the options available in-market.