Background

1. The Jindalee Operational Radar Network (JORN) Project received Government approval in April 1990. The Project has an approved budget of $1.24 billion, of which $1.14 billion had been spent by September 2005. The JORN system is based on advanced over-the-horizon radar technology that uses radio energy refracted from the ionosphere to detect and track airborne and surface objects over the horizon at ranges between 1 000 to 3 000 kilometres. It consists of two radars: one near Longreach, Queensland and the other near Laverton, Western Australia; and a network control centre located at the Air Force's Edinburgh Base near Adelaide, South Australia.

2. In June 1996, the ANAO reported the JORN Project to be experiencing significant project management and systems engineering difficulties. The Project's Prime Contractor at the time, Telstra Corporation Ltd (Telstra), had rescheduled JORN's completion from the contracted date of June 1997 to 1999, and was proposing a revised completion date of June 2000. In February 1997, Telstra relinquished its JORN Project management role to RLM Management Pty Ltd (RLM), and in October 1999, JORN's contracted delivery date was rescheduled to December 2001. In April 2003, RLM successfully completed JORN's development and in May 2003 JORN achieved Final Acceptance by Defence. RLM is now responsible for JORN's maintenance and support, through the 46-month initial maintenance and support provisions within the JORN Contract.

3. The JORN Project is regarded as a ‘turn-key' project, with the total system design, development and maintenance being managed by RLM, leaving the Defence Materiel Organisation's (DMO's) Over-the-Horizon Radar Systems Program Office (OTHRSPO) responsible for monitoring and verifying performance. This has provided RLM with flexibility to optimise its JORN in-service support management structure and management systems, and so achieve cost effective outcomes for itself and ultimately for Defence.

4. The ADF also has an OTHR system located near Alice Springs, Northern Territory, which is known as the Jindalee Facility Alice Springs (JFAS). JFAS is integrated into JORN to form a three-radar network centrally operated from the Air Force Base at Edinburgh, South Australia.

5. From the 1970s, JFAS was supported through a series of contracts, the last of which is a $88.3 million (June 2005 prices) contract awarded in February 2000 to BAE SYSTEMS Australia Limited (BAE SYSTEMS^)1. This contract, (the JFAS Contract) includes JFAS system maintenance and engineering support services covering upgrades, integration, design and development. The JFAS Contract expires in February 2007.

Audit approach

6. The audit scope covered key lessons learnt from the JORN Project's acquisition and acceptance phases, and JORN and JFAS maintenance and support. The audit objective was to assess the effectiveness of DMO's JORN and JFAS maintenance and support arrangements. The audit examined the maintenance and operation of the JORN and JFAS radars, and their facilities.

Overall audit conclusions

7. The JORN Project has successfully transitioned from its acquisition to in-service support phase, and experience to-date indicates the Project has achieved its major objectives, namely: to provide the Australian Defence Force (ADF) with broad-area surveillance of aircraft and sea-going vessels in Australia's northern approaches; and to develop Australian industry capability to support over-the-horizon radar operations, maintenance and evolutionary development.

8. ANAO observations of JORN's performance diagnostics and performance monitors, and operational availability records indicate both JORN radars are effectively maintained and are operating within their design parameters. Similarly, JFAS performance diagnostics, performance monitors and operational availability records indicate the JFAS radar is achieving its requirements.

9. The ANAO found key factors contributing to the successful turnaround and delivery, maintenance and support of the JORN system include:

• the application of sound systems engineering plans and procedures;
• the application of well-designed maintenance plans and procedures, supported by suitably defined performance targets; and
• the use of a JORN Maintenance Management System with extensive functions covering inventory management, maintenance scheduling, records management, and maintenance management reporting.

Key findings

Jindalee Operational Radar Network Acceptance (Chapter 2)

10. The ANAO found that from February 1997 until October 1999, RLM revalidated the Project's requirements and instituted improved systems engineering changes. These initiatives initially added to the Project's schedule slippage. However, they resulted in major sustained improvements in the JORN Project's cost and schedule performance, and assisted in the delivery of continuously reliable outcomes.

11. The original JORN Contract with Telstra scheduled JORN to be complete by June 1997, which is almost six years prior to the achieved final acceptance date of May 2003. Given the Project's delays, Defence invoked the JORN Contract's liquidated damages provisions and obtained an undertaking from RLM to do additional JORN development studies and logistics work to the value of $8 million, at no cost to Defence. This work was completed in September 2004.

12. The ANAO found that steps taken by RLM and Defence to resolve the JORN Project's problems and achieve Final Acceptance by Defence included:

• Organisational structure improvements: RLM formed a co-located Integrated Product Teams (IPTs) structure comprising contractor, DMO, Defence Science and Technology Organisation (DSTO), and Air Force personnel covering systems, software and hardware development, test engineering and cost and schedule control disciplines. IPT Managers had the authority and responsibility for their team's cost, schedule and performance, and for achieving cost effective outcomes related to production versus in-service support costs.
• Engineering process and systems integration improvements: RLM established a design baseline for all JORN sub-systems and their interfaces. They also established a Configuration Management Team, responsible for all JORN hardware, software, drawings and documentation, and a standardised set of software development tools and procedures. RLM also established an integration facility in Melbourne, which housed 350 IPT engineers and laboratory space for seven versions of JORN hardware and software elements. These initiatives allowed RLM to simultaneously develop, integrate and test JORN computing system configuration items, and hardware systems and sub-systems.
• Project monitoring and verification improvements: DMO sought improvements in its personnel knowledge and skills levels, and in its ability to manage project schedules and to monitor, verify and report on each project's progress, risk trends and potential difficulties. The need for these improvements was highlighted by OTHRSPO's formation in July 2001, and its consolidation in Edinburgh in 2003, which resulted in a complete changeover of DMO's JORN Project personnel. This required the SPO to develop a new project team of 45 personnel with highly specialised JORN system knowledge. OTHR specialists from DSTO, Air Force and Contractors, which were already located at Edinburgh, assisted OTHRSPO to become established. Since then, these specialists have maintained the collaborative approach needed for the continuing support and development of the ADF's OTHR capability. In 2001, DMO began developing its Improve Project Scheduling and Status Reporting (IPSSR) system. As at October 2005, IPSSR was in various stages of implementation throughout DMO and was used for the JORN enhancement program.

13. The ANAO found that the JORN Project's effective transition from system acquisition to final acceptance and introduction into service was achieved with close co-operation between DMO, DSTO and the Air Force's No.1 Radar Surveillance Unit (1 RSU). The Unit, in its capacity as the JORN operating authority, prepared for JORN's introduction into service by remaining closely involved with OTHRSPO in categorising System Problem Reports, in developing documents associated with JORN's Final Acceptance, and in developing JORN's Standard Operating Procedures.

Jindalee Operational Radar Network In Service Support (Chapter 3)

14. The ANAO found that between May 2003 and September 2005, JORN's overall operational availability had not fallen below 99 per cent, thus satisfying the contractual requirement of a minimum of 96 per cent. At the same time, the JORN system's average time between critical equipment failures was 45.6 hours, and the average time taken by RLM to repair those failures and to return JORN to operations was 28 minutes.

15. The original estimated cost of maintaining and supporting JORN, during the 46-month initial support period, was $145.5 million (June 2005 prices). The 2005 revised cost estimate amounted to $121.4 million, based on maintenance cost trends. On that basis, JORN will be some $24.1 million less costly to maintain than first estimated over the initial support period.

16. The JORN Contract also requires RLM to perform supplementary maintenance of the systems and facilities that directly support the JORN. The current firm cost of the JORN systems supplementary maintenance is $11.9 million (December 2005 prices), which covers the period from May 2003 to February 2007. By September 2005, expenses incurred by RLM for JORN facilities maintenance totalled $2.65 million.

Jindalee Facility Alice Springs In-Service Support (Chapter 4)

17. The ANAO found that JFAS has not benefited from a system-wide formal logistics support analysis. Nevertheless, from September 2001 to September 2005, the JFAS radar's overall operational availability had not fallen below 99 per cent. Between May 2003 and May 2005, the JFAS radar's average time between critical equipment failures was 47 hours, and the average time taken by BAE SYSTEMS to repair those failures and to return JFAS to operations was 13 minutes. Since early 2000, there was only one occasion where the contractual limit of four continuous hours of downtime was exceed, and this was by 10 minutes in February 2004. This downtime resulted from faulty Government Furnished Equipment, which was beyond the scope of the JFAS Support Contract with BAE SYSTEMS.

18. However, even though the JFAS system met its contracted operational availability, there is scope for improvements in its logistics management system. Also, the ANAO inspection of the JFAS facilities indicated a need for improved facility maintenance. The JFAS arrangements are that Defence Corporate Services and Infrastructure Group (CSIG) is responsible for managing Alice Springs facilities. There appears justification for negotiating the inclusion of facilities maintenance in the post February 2007 JFAS Contract. This would align with the JORN contracting policy of providing the Contractor with clear lines of responsibility and accountability for managing all aspects of the radar's operational availability.

Recommendation

19. The ANAO made one recommendation aimed at improving the JFAS logistics management system and its facilities management. Defence agreed with the recommendation.

Defence's response

20. The Department of Defence provided a response on behalf of DMO and Defence. Defence advised the ANAO that:

The Jindalee Operational Radar Network (JORN) Project (JP2025) has achieved a remarkable turnaround since the 1996 ANAO Audit. Since then, the Project has delivered, in May 2003, arguably the world's leading over-the-horizon-radar capability.

The JORN successes have continued; with a system delivering a highly reliable, well maintained, wide area surveillance capability for the Australian Defence Force (ADF). An achieved operational availability of 99 per cent, has continually exceeded the contracted requirements. The Project is on target to complete the acquisition and initial sustainment phase (of 46 months duration) under budget.

A key factor in the successful transition of JORN into service and also for the future of JORN development is the effective partnership between Defence Science and Technology Organisation, Defence Materiel Organisation (DMO) and the Royal Australian Air Force (RAAF). This partnership, working in conjunction with the industry alliance involving RLM Management Pty Ltd and BAE SYSTEMS Australia Limited, will enable the ADF to realise the full potential of the JORN system through an evolutionary development program.

Footnotes

1 The contract price is adjusted for approved variations in the cost of labour.