Project Management Assignment: Case Analysis of Future Frigates (War Ships) in Australia

Question

Task: Prepare a project management assignment report analyzing the project of Future Frigates (War Ships) initiated by Australian government. Your report should consist of:

A. Project overview
B. Risk Analysis
C. Risk Mitigation Plan

Answer

Part A: Project Overview
Future Frigates, the case analysed herein project management assignment, is a project undertaken by the Australian government to build hunter class frigates – SEA 5000 to replace the Anzac class frigates. The maritime project is aimed at increasing the capability of Australia to build as well as sustain the naval vessels with continuous build capacity. The project was commenced during 2015 and approved in 2016 (Bergmann, 2018). The BAE Systems took the tender for the project.

Overall budget
The budgetary requirement for the future frigate allocated is $35bn AUD for the life of the future frigates program. The total plan is 9 frigates for Australia into its future warfare advancements for navy. Overall budget is $35 billion AUD allocated into the program (Bergmann, 2019).

Total budget proposed for life of project	$35 bn
Initial budget approved for design activity	$6 bn

The overall budget for the project proposed for the life of the entire Future Frigates program is $35bn. The initial budget approved was $6 bn for design activity. The $6 bn budget is allocated for the design activity for creating the prototype with the ship blocks at Osborne shipyard.

Social and economic rationale
The benefits of the project are the introduction of the futuristic hunter frigates into the royal Australian navy. It will replace the Anzac class frigates commissioned in 1996. The benefits of the program are that it will improvise the warfare capabilities of the hunter class frigates introduced for future navy the combat management system. These futuristic ships will engage threat missiles even at a longer range (Bergmann, 2018). It is vital for the navy considering the rogue states which are in development of missiles that can reach larger distances at advanced speed capabilities.

The drawbacks are also considered for the future frigates program (Goldsmith, 2016). There are certain problems that delay the construction of the frigates namely interim capabilities, cost issues, and anticipated construction tenure. There is a large gap in terms of production capability considering the delay in the current year, and slow construction process. This will be further delayed because the project’s current target is 9 ships over 18 years and is moving slower than expected.

Key Statistics
The project is in pre-phase 1 and construction elements are setup for major acquisition. Materials and analysis are provided by RAND Corporation. The total cost of the project life is estimated at $35 billion AUD. The scope of the project extends to a period of at least 25 to 30 years as anticipated for the future. The project size will be vast and it will further expand to possibilities of three other design, and build options for the frigates. These are namely Military Off-the-Shelf, Evolved MOTS, and, New Design. It will provide increased possibilities considering the phases of the program (Bergmann, 2019). The budget estimate is planned at 35 bn for the entire life of the proposed future frigates project.

Project duration
The time taken to complete the construction of the hunter class frigate is 18 to 24 months for one frigate. The overall estimated continuity if the project is 25 to 20 years considering future advancements in the future warfare (Goldsmith, 2016).

Key construction elements
The key construction elements include:

AEGIS combat system
48-cell and 24-cell banks of the Mark 45 Mod 4 Dual-Purpose
Vertical Launch Systems
Turreted 5" deck gun
20mm Gatling-style Close-In Weapon System
Structural dimensions – 492 * 67 feet
Displacement – 9700 ton under full load
CODLOG arrangement
27 knot speed (Bergmann, 2014).

Environmental costs/benefits
The frigates developed are adapted to the future naval environment. The main environmental benefit is sound environmental management in the royal Australian navy. It is the key environmental advantage derived from the future frigates program. RAND Corporation is adhering to the sound management under proper guidance from Sydney Harbor Base. The cost of impacting the environment and other contamination clean-up programs are eliminated with the future frigates (Bergmann, 2014). The program is a new step to environmental stewardship.

Funding mechanisms
The funding is from the government. Commonwealth government retains the sovereign share in project. The complete ownership is taken at end of the project schedule. There are also certain investments made in supply chain of the project seeing to the shipbuilding.

Key stakeholders
The key stakeholders identified are the Commonwealth Government, Royal Australian Navy, BAE Systems, BlueScope Steels (steel supplier for the project), Fincantieri, Navantia, and Australian Department of Defence (Goldsmith, 2016).

Part B: Risk Analysis
Potential risks
The potential risks identified are technical risks, contract, software integration and industrial base risks. Industrial base risks include the new assembling systems or new kinds of materials can prompt expanded development costs. Additionally, an industrial base that isn't resourced and arranged to manufacture complex warships can prompt creation wasteful aspects and expanded costs and schedules. Generally first-of-class ships take more time to construct and cost more than initially evaluated. Contract risks incorporate inability to suitably appoint obligation at the contracting stage can bring about later contract disagreements about risk for expanded program costs or postponements. As the technical complexity of the hunter class frigates increases, it creates difficulties for the integration of new systems. Progressive advances infuse significant levels of risk into a program. In any case, the fast pace of innovation change, especially for programming subordinate systems, implies that from the time the boat enters advancement until the time it is conveyed, the cutting edge innovation might be ages expelled from the underlying idea (Houston, & Cannon, 2017). Soft|ware integr|ation has a hi|gh ri|sk for co|st and sche|dule del|ays, ev|en for exis|ting platf|orms. In the inte|rim, the pu|sh to me|et in-administ|ration tar|gets an|d to pu|sh sen|ds ahe|ad in|to the develo|pment sta|ge frequ|ently dri|ves lead|ers to do as su|ch und|er circums|tances of inse|cure pl|an or imm|ature techn|ologies.

		Impact
		Low	Medium	High
Likelihood	High		Industrial base risks	Technical risks
	Medium			Contractual risks
	Low

The risk matrix tool objectively allows determining which are the relevant risks for the safety of Future Frigate project and the risks it faces. Its filling is simple and requires the analysis of the tasks carried out relative to the key risks identified. It is used to analyze the level of risk present in the project, to compare different construction activities of the project by risk level, and, to propose concrete actions for reducing risks as well as estimate the impact these actions will have on the risk level of workers (Houston, et al, 2017).

Financial measures
The primary financial measure is to add a scale of money to the risks identified. By scaling them in terms of money, it is possible to define the level of impact caused by each of the risks. For example, the initial contract value allocated for BAE for building hunter class frigates is $6bn. Hence, any potential contract risks can affect the initial funds allocated i.e. $6bn (Audia, & Greve, 2006). The contract risk carries threat of losing $6bn.

Part C: Risk Mitigation
Risk evaluation
The construction of the hunter class ships for the Royal Australian Navy constitutes one of the most important work activities both from an economic and military point of view with the consequent generation of very direct jobs (Qazi, & Akhtar, 2018). Shipbuilding is considered a subsector within the metallurgical sector and has considerable risks to be addressed such as contract, integration, technical, and technical risks from the industrial point of view. These processes foster consequent generation of potential risks that must be eliminated or controlled to avoid delays to the future frigates project. It is important to identify these risks and eliminate or control them. It has an eminently technical orientation in which special relevance was given to those aspects that present a greater lack of legislative concretion for which reason abundant information should be included reflecting the criteria set in the Future Frigates Project (Slocombe, 2018). The evaluation of the prominent risks identified is the result of the experience acquired in the Australian Community, regarding the risks derived from shipbuilding and repair work as well as the work methods used which is most adequate to prevent or control them.

Risks not to be addressed
There are no risks identified that are to be left unaddressed. The technical risks have high likelihood of occurrence and impact. It is the primary risk to be addressed. The industrial base risks have medium impact however, has higher likelihood of occurrence. Finally, the contractual risks have medium likelihood of occurrence though high impact to the organization (Hossain, et al, 2016). No risks are classified as low impact or low likelihood that they are unaddressed.

Risk mitigation plan and strategy
The risk mitigation plan and strategies are formulated to avert the different types of risks identified. In relation to contracts and subcontractors, rigorous vigilance must be established both in their selection, development and coordination of their activities. It is also important to ensure that personnel they provide have sufficient training and capacity to carry out the functions that they are going to entrust him, and the necessary knowledge in the matter of prevention. The accident rate in the sector should be analyzed in order to institutionalize its continuous improvement (Qazi, et al, 2018). Also, the tutelage of the administrations is facilitated to maintain continuous improvement. It is therefore essential to resolve the risks identified considering the technical nature of the Future Frigates project as well as in adherence to the stakeholder needs identified. The only effective way to resolve these risks identified is through progressive adoption of a true preventive culture in the project by the commonwealth government (Qazi, et al, 2018). Further, the project should facilitate implementation of risk management policies facilitating a high level of integrity in the project, complying with legislation on this matter and turning to the principle of continuous improvement of preventive action.

Commercial considerations and cost effectiveness
The commercial considerations comprise the fact that the hunter class frigates must be designed and built for a given project useful life so that they are good and environmentally safe. If their operation and maintenance are adequate under the anticipated operational and environmental conditions, they can continue to be safe during all its useful life in the Royal Australian Navy (Shao, McLean, & Leong, 2005). So, BAE systems should develop shipbuilding standards that will allow for innovations in the project but ensure that ships are built, and properly maintained. The cost effectiveness is ensured by building the frigates in accordance with supervised and transparent standards on the quality of production and cost considerations. The ship's construction quality procedures will include the specification of materials and the procedures for manufacturing, alignment, assembly, assembly, welding, surface preparation and coatings (Houston, et al, 2017). By adhering to all the policies, the cost is maintained below the budget established facilitating cost effectiveness in the future frigates project.

References;
Audia, P. G., & Greve, H. R. (2006). Less likely to fail: Low performance, firm size, and factory expansion in the shipbuilding industry. Management science, 52(1), 83-94.

Bergmann, K. (2014). Future frigate capability debate. Asia-Pacific Defence Reporter (2002), 40(8), 44. Bergmann, K. (2018). SEA 5000 combat system details emerging. Asia-Pacific Defence Reporter (2002), 44(8), 10.

Bergmann, K. (2019). Future frigates combat system-Have the rules changed?. Asia-Pacific Defence Reporter (2002), 45(4), 10.

Goldsmith, S. (2016). SEA5000 CEP: Critical capability considerations for the future frigates. Hossain, N. U. I., Nur, F., & Jaradat, R. M. (2016). An analytical study of hazards and risks in the shipbuilding industry. Project management assignment In Proceedings of the International Annual Conference of the American Society for Engineering Management (pp. 1-8).

Houston, M., & Cannon, S. (2017). Application of Structural Integrity Management Principles Demonstrated in Other Domains to Improve Seaworthiness and Cost of Ownership Outcomes. In Pacific 2017 International Maritime Conference, Sydney, Australia.

PMI. (2020). A practical risk management approach. Retrieved from https://www.pmi.org/pmbok-guide-standards Shao, G., McLean, C. R., & Leong, S. K. (2005). A Simulation System with Neutral Data Interface for Shipbuilding Operation. Slocombe, G. (2018). As future frigate selection nears, contenders make their pitches. Asia-Pacific Defence Reporter (2002), 44(3), 12.

Qazi, A., & Akhtar, P. (2018). Risk matrix driven supply chain risk management: Adapting risk matrix based tools to modelling interdependent risks and risk appetite. Computers & Industrial Engineering, 105351.

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