Britain Issues $1.2B E-3D AWACS Support Contract
Also on this day: 16-Aug-2005 »
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SpaceWar.com notes that the UK Ministry of Defence, Defence Logistics Organization has issued a GBP 665 million ($1.2 billion) long-term contract with Northrop Grumman for the Sentry Whole Life Support Program. Its team will provide aircraft-maintenance and design-engineering support services to improve availability and reduce overall ownership costs for the United Kingdom's Royal Air Force fleet of seven E-3D Sentry Airborne Warning and Control System (AWACS) aircraft. As is typical of recent British contracts, the government has chosen a public-private partnership approach with availability guarantees plus performance based contracting.
The Sentry is the UK's principal early warning and control aircraft and provides vital strategic support to the UK armed forces in operations around the world. Since its introduction into service in 1992, the E-3 Sentry has been used in every major UK military operation, seeing extensive use in campaigns in Bosnia, Kosovo, Afghanistan and Iraq.
Northrop Grumman was selected as the Preferred Bidder by the UK Ministry of Defence in July 2004, and deal was concluded just over a year later, in August 2005.
Drawing on its experience with the US Air Force's 707-based J-8 Joint STARS ground surveillance aircraft Total System Support Responsibility Program, Northrop Grumman's Integrated Systems sector will have engineering-support responsibility and design authority for the Sentry Whole Life Support Programme. The company's Electronic Systems sector will provide radar capabilities, while Northrop Grumman's Space Technology sector will offer highly sophisticated, interactive, electronic technical-manual support.
Through the innovative fleet availability contract, Northrop Grumman will be responsible for all aircraft scheduled maintenance including the provision of spares world-wide, design authority services and management of the aircraft structural integrity work, technical publications and a training service for all Sentry maintenance personnel. A particular feature of this contract will be the close partnered relationship engendered between the Ministry of Defence and the Industry team - all aimed at maintaining 24/7/365 availability world-wide. British companies BAE Systems and FR Aviation in Bournemouth, plus the UK division of AAR Corp. based in Mitcham, will operate as sub-contractors and create over 50 jobs based at RAF Waddington.
BAE Systems share of the total contract is expected to be worth close to GBP 100 million (USD $178.7 million) over the life of the program. Their role will be to provide depth maintenance, ground maintenance training and on-line technical information. Within the contract, BAE Systems is also responsible for the construction of a new hangar annex within the grounds of RAF Waddington, which is being built to co-locate the 150 people that will be moving on-base to deliver the holistic service provision.
BAE Systems Customer Solutions & Support (CS&S) military air business will be applying the experience from their Nimrod MR2 maritime surveillance aircraft and VC-10 transport/tanker integrated support contracts. Technical information will be delivered through the CS&S Integrated Asset Management (IAM) service also scheduled for implementation on Nimrod MR2 support and Tornado fighter support and upgrade. The IAM service incorporates access via CS&S's trilogiView technical browser, already chosen for 26 other UK MOD programmes and by Lockheed Martin for the F-35 Joint Strike Fighter.
It is envisaged that implementing the Sentry future support programme will reduce the cost of supporting Sentry over the next two decades by 12-20%. Under the BAE Systems CS&S' GBP 75 million NISC (Nimrod Integrated Support Contract), availability of the Nimrod MR2 fleet is up by 40% while support costs are down by 8%.
Minister for Defence Procurement Lord Drayson, said that "Effectively the new contract will halve the number of aircraft in the support hangar.... This contract is also good news for the British taxpayer as it will reduce the cost of supporting Sentry by over 12% - saving GBP 90 million - whilst creating over 50 jobs here in Lincolnshire."
FR Aviation Services, a subsidiary of Cobham's Flight Operations and Services Group, will be the maintenance provider on E-3D under a partnering agreement with CS&S. This latter agreement is based on the relationship FR Aviation Services and CS&S developed supporting the Nimrod fleet at RAF Kinloss for the UK's Defence Logistics Organisation.
The contract is a fixed-price contract for the first five years, and the remaining 15 years the contract is target-cost incentive-fee. In addition, the contract is fully funded for the entire 20-year term.