Critical Analysis of the LCM-2000 Landing Craft and MRH-90 Helicopter Projects in Australia

This report critically analyzes the LCM-2000 landing craft and MRH-90 helicopter projects in Australia, highlighting key issues that led to their failures. It examines the control systems implemented, analyzes cost and schedule overruns, and explores the relationship between overruns and stakeholders. The report concludes by suggesting possible actions for future project success, emphasizing the importance of robust project management practices and stakeholder engagement.

Critical Analysis Report
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Contents
Introduction........................................................................................................................2
Key issues..........................................................................................................................4
Control systems used in the project..................................................................................5
Analysis of cost or schedule overruns...............................................................................7
Analysis of project execution team....................................................................................8
Analysis of relationship between overruns and stakeholders...........................................9
Analysis of possible actions for success.........................................................................10
Conclusion.......................................................................................................................12
References.......................................................................................................................13
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Introduction
A project is a group or a sequence of activities which are undertaken in order to achieve a
specific purpose or objective. A project includes a number of factors which are responsible for
the success or failure such as time, cost, resources, persons involved etc. Project is an event the
success or failure of which depends upon a large number of factors such as project stakeholders,
project execution team, project control systems, project documentation, project designing and
acquisitions etc. The project management tools are the techniques and processes which can be
used by the project manager in order to avoid the risk of the project and deal with the
uncertainties and cost and schedule overruns effectively. The project used for the analysis in this
report is the LCM-2000 landing craft project of Australia and the MRH-90 helicopter project of
Australian navy and defence ministry.
Image1: LCM-2000 Landing craft project
The landing craft project was launched in the year by the Howard Coalition government in
Australia. The Defence Ministry of Australia needed to acquire six landing crafts. These landing
crafts were proposed to be carried on the deck of two lending ships, HMAS Manoora and HMAS
Kanimbla. From these ships the landing crafts were intended to be dropped into the water in
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order to transport the troops and vehicles to the sea shore. After its launch, the project was
handed over to the defence company of Australia in the year 2001. The defence company is ADI
which is currently known as Thales. The construction of the vessels was completed from year
2003-2005. The process of construction was performed at the facilities of ADI at Carrington,
NSW. The total cost of the project was estimated to be $40 million. The requirements of the
landing craft include the measurements of 25 metres in length and 135 tonnes fully laden in
weight. Each landing craft shall be able to carry on it a leopard tank or a maximum of 5 ASLAV
vehicles. The landings crafts were produced as per the designs and specifications but they were
not suitable to be used by the defence forces for their intended purpose. The reason for the
unsuitability was that the dimensions of the craft designed were not fit for landing from the
ships. Also these landing crafts could not be used by the defence forces for any alternative use in
the navy. In the opinion of the Defence Material Minister, Jason Clare, a number of resources
and lot of time of the defence was contributed to resolve the issues and meet the success targets
of the project.
Image 2: MRH-90 Helicopter
The high profile MRH-90 helicopter project was announced by the Minister of Defence in the
year 2011. Under this project the Australian government ordered 46 helicopters but the delay in
project resulted in excessive costs deprived them to be included in the Australian Defence Force
(ADF). The total estimated cost of the entire project is $4.013 billion. There are three phases of
the project. The first phase of the project is Phase 2 which relates to the acquisition of 12
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additional helicopters for the Australian army. The second is Phase 4 in which 28 helicopters will
replace the Black Hawk helicopters of the army in order to support the Air Mobile and Special
Operations. The last is Phase 6 in which 6 helicopters will replace the Sea Kling helicopters of
Royal Australian Navy.
Key issues
There are a number of reasons which result in the failure of a project since various factors affect
the project activities directly and indirectly. The key issues which resulted in the failure of the
landing craft project of Australia are as follows:
 The dimensions of the landing craft were not appropriate for the purpose since they were not
capable to carry the large tanks or ASLAV vehicles. The weight of the craft was also
inappropriate to be launched from the ships.
 The labour was employed into the project at a later date in the year 2007 which was too late
to initialise the construction of the landing crafts.
 The procurement of the material from the suppliers was not proper which resulted in the
inefficient designing of the landing crafts of the project.
 There was no alternative use of the landing crafts in case they were unfit for the launching
from the ships and therefore they had to be disposed of by the government.
 The cancellation cost of the project was $40 million to the Commonwealth and government
of Australia also suffered huge criticism from all over the world and entire population of the
country.
 The helicopter project had a budgeted cost of $169.9 million against which the actual cost
spent till June 2016 was $193.9 million which are excessive from the budgeted costs.
 Due to delay in the delivery of helicopter and technical defaults the actual delivery had to be
rescheduled.
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Control systems used in the project
Project controls are the processes which are used for data collection, processing and analysis in
order to affect the time and cost of the project so as to ensure the effective management of the
project and achievement of the project activities and milestones within the allocated time and
budget (Stephensen & Hallman, 2011). The success of a project depends upon the levels of
control implemented in the project and therefore it is very important to implement the control
systems so that the project can be monitored and controlled effectively. The control systems
which were used in the projects of Australian Government are explained as follows:
 Planning controls – This relates to development of strategy of the project in order to achieve
the project outcomes in an effective manner. The planning controls were implemented
successfully in both the project. The plan included the time, scop4e, cost, duration and
resources to be used for the completion of project tasks and activities. The phases of the mrh
program were defined in advance so as to ensure the smooth implementation of the project.
Similarly under the watercraft project, the length, width and other specifications and
requirements of the landing crafts were developed at the planning stage to render it suitable
for the intended purpose of the project.
 Implementation controls – These controls relate to the effective implementation of the
project in accordance with the plan and budget. It includes the scheduling, costing, value
engineering, documentation, updating and maintenance controls. The MRH plan was
estimated to be completed by June 2016 and the total cost of the project was also estimated to
be $3,773.9 million. The LCM 2000 project has an estimated total cost amounting to $40
million. However the total time of the completion of project was not specified due to which
the scheduling of the project was not effectively implemented. The project status reports and
control reports were prepared by the manager and submitted to the stakeholders to ensure the
documentation, updating and maintenance.
 Procurement controls – this control relate to the acquisition of material and resources from
the supplier and negotiations with the supplier in order to avoid delay and excessive costs in
relation to procurement of material. The procurement controls were implemented in the MRH
control at the planning stage in which the name of the supplier, time of delivery and cost of
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material were specified. The procurement manager used automated inventory management
software to monitor the resource requirement and make arrangements on timely basis.
However no controls were implemented to ensure the quality of the material to be procured.
The methods such as total quality management and value engineering can be used to
implement the procurement controls.
 Privacy and authorisation controls – These controls relate to the security and integrity of
the project information, project documents and order relevant and confidential which has the
potential to harm the success of the project. The privacy controls were implemented into the
project since these are government projects and leakage of sandy important information
might result in great loss. The authorisation and encryption controls were used to protect the
data security and integrity.
 Risk management controls – These controls relate to the management of potential risks in
relation to the project. The risk arises due to uncertain events or situations or the impact of
project risk factors on the project time schedule and project cost. The risk implementation
controls were implemented in the project to a limited extent. The monitoring of the project
was done by the project manager at all the phases in order to avoid the uncertainty and
unexpected events. However no effective procedure was adopted for risk management. The
risk register was not in place for recording the risk transactions and conducting the risk
assessment (Li & Ford, 2011).
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Analysis of cost or schedule overruns
According to Dolio (2012), his cost overrun of the project is referred to as the situation under
which the actual cost of project completion is higher than the budgeted or planned expenditure to
complete the project. The cost overrun results in the failure of the project since arrangements of
excessive cost is difficult and in case of lack of financial resources the [project will have to be
stopped. The scarcity of financial resources or project funds leads to discontinuance of the
project The budgeted cost of the MRH-90 helicopter [program of the Defence Ministry of
Australia was $ 4.013 billion whereas the total actual expenses incurred in relation to the
acquisition of 46 helicopters amounted to $8.730 billion. This means there were huge cost
overruns of the project. The multi role helicopter program was undertaken by the Australian
government in order to improve the ADF facilities by strengthening the various operational roles
of the defence force. The supporting or sustainment costs of the aircraft increased by the rate of 3
% every year with regards to the inflation hike in the country. This resulted in the purchase or
acquisition cost of the helicopters. As a result the total services cost to be incurred for sustaining
the helicopters up to their Plan withdraw date is likely to be $8.730 billion. This cost overrun is
for the required configuration of the helicopters. Thus, even after the cost overruns, the quality of
the helicopters under the [project was maintained as per the planned project details. Thus, the
total cost of acquisition of helicopters and sustaining them till their planned withdraw is $11.7
billion. This cost is excessively high as compared to the estimated cost.
Schedule overrun is the situation of the project when the total duration of completion of the
project activities is more than the planned duration or planned date by which the project is
expected to be completed (Doloi, 2012). The schedule overrun is one of the important reasons for
the failure of the MRH-90 helicopter project however the LCM 2000 project failed due to
technical defaults in the watercrafts designed and developed. The redefining of the acquisition
conditions and development deficiencies resulted in the delay of the project. As far as the LCM -
2000 project is concerned, it also faced the problem of schedule overrun since the labour was
deployed for the construction of watercraft later in the year 2007 and therefore the construction
was delayed. The haste ion the development of the watercrafts also resulted in technical defaults
which led to the failure of the entire project (Alinaitwe, 2013).
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Analysis of project execution team
Project execution team includes all those members who contribute ion the achievement pop
project objectives in accordance with the project scope and play. It includes the personnel
performing the project activities for its completion but does not include the stakeholders of the
project (Andriole, et.al, 2012). The project execution team generally includes project manager,
labour and construction manager, technical manager and engineers, IT manager and IT staff and
experts, procurement manager, development manager, finance manager and other related
supervisors and executives. Each member of the project team has a specific role assigned to them
on the completion of which /the project activities are completed. In this way the [project is
successfully executed with the proper co-ordination and cooperation among the [project
executive team members. In the government projects, generally the execution team of the
defence projects generally consist of the army personnel. The project team of the helicopter
program and the watercraft program included a project manager who was responsible for
organising the project team, planning the scope of project, documentation of the project; monitor
the execution of the project and reporting the project status to the stakeholders of the project. The
procurement manager was responsible for selecting the suppliers for the acquisition of
helicopters and other material which was the DMO, conducting the negotiations with the
suppliers for the purchase of material and the equipment and the procurement of material to be
used for the project. The labour was responsible for the construction of the watercraft to be used
in the project for launching it from the ships. The other team members were allocated the other
responsibilities so that the project can be completed within the allocated time and with proper
quality. The project execution team worked in a co-ordinated manner and in co-operation with
each other to achieve the project objectives. However the procurement procedures undertaken
under the project was weak which resulted in the failure of the project and cost and schedule
overruns of the project. The project execution team contributes to its best for the completion of
the project within the allocated time and schedule but the other project factors also result in the
failure of the project. In this way the project failure not only depends on the project team
members but also other factors such as economic factors which resulted in rise in inflation,
political factors which relate to project approvals and sign offs from the higher authorities of
government, Royal Australian Navy and Australian Defence Force. The project executive team is
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required to consist the experts and professionals which possess all the required skills to manage
the project effectively and perform the allocated project activities and tasks so that the project
objectives are satisfied to the full extent (Kerzner & Kerzner, 2017).
Analysis of relationship between overruns and stakeholders
The project execution and success directly affects the investment and other decisions of the
stakeholders of the [project and therefore the stakeholders are concerned about the success of the
project (Stepherd, et.al, 2014). Therefore the stakeholders react to the status go the project
reported to them. The stakeholders are keen to know about each and every detail of the project
and therefore they acknowledge the status reports and other project documents submitted by
them the stakeholders also monitor the project to ensure that the project oils successful and
generate good returns to the stakeholders from the project. The stakeholders invest their funds
into the project in order to earn the retunes from their investment or in other cases the
stakeholders relate to the project for achieving some specific objective or purpose. The
stakeholders of the MRH-90 project as well as the LCM-2000 project include the Australian
government, Royal Australian Navy, Australian Defence Force, army officers, investors and the
suppliers of the project. The government of Australia and army of Australia are highly concerned
about the success of the project; therefore they monitored the project and kept a record of the
completion of the project activities. The project cost and schedule overruns which resulted in the
failure of the project were not supported by eth stakeholders of the project. The stakeholders
pressurized the project team to complete the project within the schedule and allocate cost
budgets. As a result in order to complete the project as soon as possible the quality of the
watercrafts and the watercrafts had to be compromised. In this way the pressure of the
stakeholders created an adverse impact on the completion of the project as per the specification
and requirements of the project. Thus, the project overruns and the stakeholders are related since
the overruns result in the failure of project which leads to the loss to the stakeholders of the
project directly or indirectly. The cost and schedule overruns and technical defaults of the project
resulted in the failure of project. This resulted in the loss of reputation to the government and
defence farce, huge financial loss since the actual cost of the project incurred was excessively
higher than the projected cost and also the delay of the project interrupted the armed activities
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and government ventures and other related plans of the Royal Australian Navy and Defence
Force. The stakeholders sometimes positively affect the performance of the project in achieving
the success. For example the arrangement of funds by the government to meet pout the excessive
costs helped in the completion of acquisition process of the helicopters. The cost exceeded by
more than double amount and therefore it became necessary to arrange large amount of funds for
completing the project.
Analysis of possible actions for success
 Till the end of March 2014, an amount of $2.4 billion was incurred by the ADF for the
acquisition and sustainability of the helicopters when on 27 helicopters were delivered for the
operational facilities of ADF. At that time the project was 4 years behind its schedule and
therefore the milestones of army and navy both were not fulfilled. At this adage the ADF was
required to identify and verify the design changes so that the helicopters could be adjusted
with the operational tactics, techniques and procedures. By this the helicopters at the next
phase could be developed after implementing the changes requires=d so as to meet the multi
role capability of the helicopters for both Army and Navy. As the project milestone was not
achieved till that date, the test and verification would have proved to be beneficial to prevent
the operational errors of the helicopters.
 The period of 2002 and 2006 of the project was the period for the project development and
acquisition decisions to be taken. These were the crucial stages of the project since the
development and acquisition decisions form the base of the completion of watercraft
development. Therefore, the errors and wrong decisions at this stage result in long term
adverse consequences for the government and increase in expenditure of Commonwealth. At
the stage of development and acquisition of project, the monitoring and verification of the
project activities shall be effective so that the capability delivery of the helicopters and
watercrafts can be ensured.
 In the year 2004, the Australian government approved the acquisition of MRH-90 aircraft
even after the refusal by the defence. It was recommended by the Defence that the Black
Hawk helicopter shall be used for Phases 2 and 4 but the recommendation was not accepted
by the Australian government and as a result of this, the syste4m design and support system,
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of the MRH 90 helicopter was weak. This resulted in modifications in the elements of design
of helicopter to meet the multi role capability and lead to the increased cost of sustainment of
the project at later stages. Thus, if the recommendation of the Defence was followed at the
initial stage the excessive costs could have been prevented. The Defence department
concluded that the use of MRH-90 helicopter for the project was not a valid option from the
initial stage.
 The capability requirement definition of the program was inadequate since it does not
mention the process of selection of source of acquisition and the maturity of the helicopter at
the testing stage was not properly assessed. Therefore by properly defining the requirements
of the capability of helicopter, the risks from the technical deficiencies in the project
designing can be avoided. This prevents the risk of technical failure of the project.
 As per the report of the Australian National Audit Office, by using the Military off the shelf
solution, the risk of the project can be mitigated and the adverse consequences can be
decreased. This strategy proved as the most optimum risk mitigation strategy in the AIR9000
project. Thus, by using the strategies such as source selection, risk mitigation, MOTS
solution, etc. Better contractual outcomes and sustainment of the project can be achieved
successfully (Davies & Davis, 2015).
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Conclusion
From the discussion of the project management concepts in relation to the project control system,
project executive team, project stakeholders, analysis of project factors, cost and schedule
overruns of project, relationship between project overruns and stakeholders and critical success
factors of the project, it can be concluded that with the proper management ND planning of the
project, the success of the project can be ensured. The project control systems help in the
continuous monitoring and tracking of the status of the project which helps in preventing the cost
and schedule overruns of the project. Thus, by preventing additional costs of the project the
probability of success of project increases. Apart from this, the prevention of delay of the project
will result in cost savings of the project which will result in achievement of project objectives.
The control systems also help in improving the quality of the project activities at every stage of
project completion. Under the project management process, the status reports and documents are
submitted to the stakeholders and other authorities concerned which ensure acceptance and
approval at each stage. This avoids the delay in the project schedule due to delay in the project
approvals and sign offs from the stakeholders. It can also be concluded that the development and
acquisition stage of the project is the most crucial stage which decides the success or failure of
the project and therefore the controls are required to be highly implemented at this stage. The
quality on acquisition and development stage results in the development of quality products on
the completion of the project and it helps in maintaining the quality of the project and prevent
technical defaults. It can be concluded that the major reason of failure of LCM-2000 watercraft
landing project is the technical defaults in the watercraft which rendered it unfit for the intended
purpose of the project and also the construction delayed resulting in the cancellation of the
process of launching the craft of the ship. The major reason of the MRH-90 helicopter is the
excessive cost of the project against the budgeted or planned cost of the project. In this way the
cost and schedule overrun resulted in the failure of both the projects. The project management
tools and control systems can be used to avoid such project overruns and risks and deviate the
project from failure to success.
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