Termination of JP129 Tactical Unmanned Aerial Vehicle contract

The Minister for Defence, the Hon Joel Fitzgibbon MP, today announced that the Defence Materiel Organisation (DMO) and Boeing Australia have agreed to terminate the contract for the delivery of a Tactical Unmanned Aerial Vehicle (TUAV) System.

Under a contract awarded to Boeing Australia in December 2006, Joint Project 129 sought to deliver the Israel Aircraft Industries (IAI) I-View 250 TUAV System, for use by the Australian Army in airborne surveillance, reconnaissance and target acquisition.

Since contract award, Boeing Australia and its subcontractors have experienced a range of technical issues making it increasingly difficult to deliver the full scope of the contract within a timeframe acceptable to Defence.

With a Defence imperative to field a TUAV capability as soon as possible, and the potential for a number of lower risk alternative systems, the DMO and Boeing Australia have agreed to terminate the contract on mutually acceptable terms.

Rigorous management of the program by the DMO determined that proceeding as planned would have led to unacceptable delays in the delivery of this important capability.

Mr Fitzgibbon acknowledged Boeing Australia’s cooperation with the DMO in taking this action.

“I note that both Boeing Australia and the DMO took a mature and positive approach towards working to a mutually acceptable conclusion to the contract. This has avoided dragging this out in a protracted legal battle that would ultimately benefited neither party,” Mr Fitzgibbon said.

“This decisive action will enable Defence to focus on the earliest acquisition of an alternative TUAV to meet the JP129 requirement.”

Mr Fitzgibbon also acknowledged the important role of Mr Greg Combet, Parliamentary Secretary for Defence Procurement, in assisting bringing this contract to a conclusion.

The Australian Army will continue to use the Scan Eagle UAV that is currently in service in the Middle East.

As part of the agreement to terminate, Boeing will refund to Defence the $6 million they have been paid to date under the contract.