Very Low Level Air Defence Alerting and Cueing System

Project purpose and history

The purpose of this project was to get the Alerting and Cueing System needed to make completely operational the Very Low Level Air Defence (VLLAD) missiles and launchers that were acquired and delivered through a separate acquisition. The Alerting and Cueing System detects, identifies, and warns of approaching aircraft then assists with the aiming of the VLLAD weapons.

The VLLAD project started in 1994, with the aim of having the VLLAD operational by December 1996. The project consisted of launchers and missiles, and a VLLAD Alerting and Cueing System (VACS). Initially, the launchers, missiles, and VACS were to be acquired at the same time, from separate providers. In March 1994, the defence agencies' Joint Policy Committee decided to go to a competitive tender for the launchers and missiles. The VACS became a separate project but remained within the total funding umbrella of VLLAD.

Cabinet Approval to Commence was obtained in June 1994 for the launchers, missiles, and VACS, at an estimated cost of $16.9 million. The VACS component was estimated to cost $3.2 million.

Cabinet Approval to Commit was obtained in August 1996 for the VLLAD launchers and missiles and two VACS, at a cost of up to $20.2 million. The VACS component (including Identification Friend or Foe, or IFF) was to cost $5.8 million. The vendors estimated this cost because no "off-the-shelf" VACS was available at the time. The launchers and missiles were to be purchased from Matra Defénse (the contract was signed in October 1996), while the preferred approach to VACS was a joint purchase with the Australian Department of Defence. The launchers and missiles were delivered in April 1998.

The preferred approach to purchasing the VACS was dropped because of cost and time delays. The Ministry considered that the VACS part of the VLLAD project was cancelled, but we could not verify that through the Ministry's documentation. Acquiring the VACS became a lower priority, and the NZDF considered - but rejected - the idea of disbanding the VLLAD capability altogether.

In March 2002, the Minister of Defence issued a media statement saying that he had given approval for the defence agencies to develop detailed costings and options so that the VACS project could be included in the Defence Capital Plan. The VACS project was included in the 2002 LTDP and was to be completed for $8 million.

In December 2003, Cabinet approved the purchase of the VACS (essentially the second Approval to Commit) at a cost of up to $13.7 million, with entry into service in December 2005. A Letter of Intent was sent to Indra Sistemas S.A. of Spain in January 2004 requesting two radars, each trailer-mounted and complete with IFF.

In May 2004, the Secretary of Defence signed a contract with Indra Sistemas S.A. for the acquisition of VACS. The IFF part of the VACS project was contracted to Thales France in October 2004.

Although delivery and training were completed in December 2006, the capability was not operational by the end of 2007. We were advised that to make it so was likely to exceed the project's budget. The Cabinet External Relations and Defence Committee later approved an additional $0.55 million from within the LTDP to complete the project.

Cost and time frame changes for the Very Low Level Air Defence Alerting and Cueing System (VACS) project

Costs and time frames at the Approval to Commence and Approval to Commit points, and figures forecast as at December 2007

Sources

1. We use the information on costs and time frames from the 2002 LTDP as the first reference after the project was revived. The Ministry uses the $12 million figure from the 2003 LTDP, and the mid-2006 delivery timing from the 2004 LTDP.
2. This figure is from the Cabinet approval of 8 December 2003.
3. Although the Cabinet Approval to Commit notes that the system would enter into service in December 2005, we use the timing from the contract with the supplier. The contract refers to delivery 28 months after the contract signing date (meaning completion by the end of September 2006). The contract's timing is consistent with the timing (the end of 2006) reported by the Ministry to the Committee in December 2007.
4. In April 2008, the Cabinet External Relations and Defence Committee approved an extra $0.55 million to allow for the project's completion.
5. Although the equipment has been delivered, in late 2007 it was not fully operational. Additional funding was sought and obtained from Cabinet in April 2008 to make it so.

Changes to costs and time frames as the project has progressed

Explanatory notes

1. We have had to assume the difference between the Approval to Commence and Approval to Commit points. The 2002 LTDP stated "as soon as possible", so we have assumed some urgency and indicated a 12-month time frame. The 39 months is the difference between the end of June 2003 and the time frame in the project's contract, which was the end of September 2006.
2. We have had to assume the difference between the Approval to Commit point (the end of September 2006) and the Ministry's December 2007 forecast (delivered June 2007 - so we use the end of June 2007).