PETER LA FRANCHI /CANBERRA & PAUL LEWIS /WASHINGTON DC

Company warns of possible major cuts as Australian government prepares to sign off restructured programme

Kaman is waiting for the Australian government's response to the recently completed critical design review (CDR) of the SH-2G(A) Super Seasprite software, hoping this will allow Canberra to sign off a restructured programme and permit initial deliveries to begin in mid-2003. Meanwhile, the company is warning that unless new SH-2G work is secured next year it will be forced to make major cuts to maintain profitability.

The CDR of the Northrop Grumman-developed software was completed earlier this month and there follows a 60-day period for customer response and answers. Northrop Grumman is responsible for the Block 2B and 3 software loads, the former providing tactical sensor data handling and tactical picture display and the latter the automatic flight-control system. CSC is working on Block 2A, integrating the 1553 databus, sensors and weapons, with a CDR due next March.

As a result of the delays in developing the Integrated Tactical Avionics System (ITAS), the Royal Australian Navy programme is running over three years behind schedule, according to the Australian Defence Annual Report 2001-02. The project is cost-capped at A$1.017 billion ($643 million), with A$793million spent to date. Australia continues to withhold payments pending an agreement with Kaman. Full operational acceptance is not expected until December 2004.

If adequate progress on project requirements and "sufficient confidence is held by the Commonwealth that the full operational software will be delivered on time, limited flying training operations may commence in mid-2003", says the RAN. Of the 11 machines ordered, all are in Australia apart from one retained in the USA for testing the full ITAS software, due to begin in mid-2004. Four have been completed by local partner Safe Air and two are awaiting flight test.

Project expenditure in 2001-02 reached A$96 million, up from A$84 million forecast in the defence budget update. The report says the minor increase in outlay during the year followed "acceptance and subsequent payment for a Link 11 software capability enhancement not contained in the 2001-02 revised estimates, and the effect of exchange rate movements".

Kaman's third quarter results include a $25 million charge for additional SH-2G(A) cost growth, which put the contract in a "loss position", says the company. It will deliver the fifth and final SH-2G(NZ) to New Zealand at the end of the year. The only other work is a small contract to refurbish the final pair of four ex-US Navy SH-2Gs for Poland.

Kaman is pursuing an Egyptian requirement for six search and rescue machines, but warns "if this award is not received in 2003, management believes that the aerospace segment will be required to engage in significant expense reductions."

Source: Flight International