| From "The Australian"
THE army's $450 million plan to acquire new 155mm self-propelled guns faces a one-year delay because of the complexity of the Defence Materiel Organisation's tender process.
The revelation comes as one of the two contenders to supply the artillery declined to participate in the final tender negotiation with the DMO.
German firm Krauss-Maffei Wegmann, whose PzH 2000 gun was favoured to win the contest to supply up to 18 guns to the army, has declined to participate in the offer definition and refinement process with the organisation.
KMW is competing against Raytheon Australia, which is teamed with Korean manufacturer Samsung Techwin, which is offering the AS-9 gun.
Senior government sources told The Australian yesterday that neither tender had fully met the DMO's tough contractual requirements. Only the Raytheon consortium has chosen to continue negotiations with the DMO.
According to informed sources KMW has cited problems with intellectual property as well as a requirement for more equitable risk-sharing with the commonwealth in its decision not to participate in the offer definition and refinement process.
Raytheon is now pushing hard for an early decision but the KMW tender offer will remain on the table and valid until next April.
Last month DMO chief Stephen Gumley told a Senate estimates committee there were a number of "technical issues" that had to be resolved before a decision could be made on a preferred tenderer.
The German firm, which is partnered with BAE Systems Australia, has offered brand new surplus Dutch army guns as part of its tender in the Land 17 project.
The PzH 2000 gun is in service with the Dutch military in Oruzgan province in Afghanistan and has impressed the Australian army with its all-round capability.
A final decision on Land 17, the project that will have the army equipped with both self-propelled and towed artillery, was expected by mid-2009.
The Rudd government's defence white paper, published last month, called for the acquisition of two batteries of self-propelled guns (a total of 12 guns) and four batteries of towed guns.
The Defence Department hopes to wrap up a decision on the towed artillery later this year, with the M777 howitzer, built in the US by BAE Systems, expected to be chosen.