REPORT ON THE PRECISION AERIAL DELIVERY SYSTEM (PADS)

CHAPTER FOUR

PARTICULAR MATTERS OF CONCERN

Areas of Concern

4.1 The series of events that led to the purchase of PADS equipment by Airservices Australia, and subsequent efforts to commission that equipment, reveal a number of areas of concern to the Committee.

4.2 The first and most central matter is the question of the reliability of the PADS equipment purchased by Airservices Australia. While the manufacturer is adamant that when deployed correctly it is totally reliable, other expert evidence has found the equipment to be unreliable. Aside from this controversy, the static line is currently the subject of an Airworthiness Directive which effectively prevents the use of the whole PADS unit in training, and consequently from use in rescue operations by CSUs.

4.3 Second, it is clear from correspondence tendered by Airservices Australia, and by Mr Gruzman of SAR Pty Ltd, that there has been a long history of disagreement between Airservices Australia and SAR Pty Ltd over PADS, and that the dysfunctional nature of communications between the two parties has contributed to a large extent to the current stalemate.

4.4 Third, the precipitous action of the new Chairman of the Airservices Australia Board in instigating an evaluation of PADS, and his haste in accepting the results of that evaluation, ignored a long history of considered deliberation on the PADS system in that very organisation, and a clear and very recent decision to reject any move to replace or augment the existing rescue system with SAR Pty Ltd equipment.

4.5 Compounding the action of the Chairman, was the fact that the motion passed by the Board of Airservices Australia at its August meeting contained no mechanism for review of that decision, nor included any tendering process. This allowed subsequent actions to be taken with little or no consultation, and at a pace that exceeded normal discretion. The manner in which the purchasing contract was negotiated suggests that the prime concern was to finalise the contract as soon as possible, rather than to achieve a result that was in the best interests of the search and rescue needs of Airservices Australia.

4.6 Fourth, the Minister was made aware of the fact that the PADS equipment had been tested on a number of occasions, including an assessment by the RAAF in August 1995, and had repeatedly been found to be unsafe. In fact, his Senior Adviser had asked that allegations made by Mr Gruzman about aspects of the RAAF evaluation process be investigated. Despite this advice, from both Airservices Australia and the Department of Transport and Regional Development, the Minister directed Airservices Australia to undertake a further assessment of the equipment by conducting a 'fly-off'. However, the Committee has found no evidence to suggest that the Minister, or his office, having made this request, subsequently satisfied themselves that the test was conducted to a standard appropriate for an organisation whose chief statutory responsibility is air safety.

4.7 Fifth, during the evaluation and purchasing process the views of Airservices officers, who suggested that problems associated with PADS be resolved before purchase, appear to have been largely ignored by the Board and senior management of Airservices Australia. Lack of consideration of staff concerns was repeated during attempts to carry out training after the PADS equipment had been purchased.

4.8 Sixth, owing both to technical difficulties experienced with PADS equipment during training exercises, and to problems which arose as a result of the decision by Airservices to engage a consultant aviation company to oversee training, a company which appeared not to have been appropriately skilled for the task, the PADS equipment has still not been distributed to CSU units and those units have still not been trained in their use. In other words, there is now a logistic and communication stalemate to resolve.

4.9 Finally, the Committee is concerned that despite repeated calls by Airservices Australia for the regulatory inadequacies highlighted in the Turtleair Report that were relevant to CASA's operations to be addressed by that organisation, those matters remain unresolved, although the Committee notes that CASA has recently undertaken to address this matter.

Reliability of PADS

4.10 There is no debate over the issue of accuracy of the PADS system. All parties are in agreement that when deployed without incident, PADS is significantly more accurate than the rescue delivery systems currently used by Airservices Australia. There is debate, however, as to the efficacy and safety of the delivery mechanism and there is a complete dichotomy in opinion on this: while the manufacturer maintains that the system is highly reliable, other experts who have tested or used the system have encountered problems.

4.11 Mr Gruzman of SAR Pty Ltd argued strenuously that if the PADS equipment was handled correctly, and dropped by appropriately trained pilots and dropmasters, then it was safe:

Our testing has been exhaustive. Immediately in the three months prior to the purchase of PADS by Airservices, as far as we can calculate, we made 72 drops, all of which were publicly filmed, such as by 60 Minutes in the fly-off, in the demonstration at Canberra, the demonstration at Temora and so on, without a flaw. We put PADS forward as the best, safest and most efficient supply dropping system in the world. [1]

4.12 Mr Gruzman's major rebuttal of the way in which PADS had been tested by others was contained in a letter sent to the Minister on 1 October 1996, [2] and he repeated those arguments in evidence to the Committee on 9 December 1996. In his opinion, there was nothing wrong with the equipment - the problem lay with the way in which it was being used by Airservices Australia. Testing of the equipment on numerous occasions by the manufacturer had proved its reliability and the failure of PADS when tested by others was the result of inadequate preparations on the part of those test crews.

4.13 In the letter to the Minister he stated: 'PADS victory in the fly-off was not partial or the product of chance. It was a total and utter defeat for the Airservices equipment and a stupendous demonstration that AA equipment will cost scores of human lives as surely as PADS would have saved them. Nobody who saw the film of the drops would permit the Airservices Australia equipment to be used for a single day longer than necessary. It is safer without any such equipment'. [3]

4.14 However, SAR Pty Ltd's testing of PADS has never been totally problem free. The fact that changes were made between the 'D' version, used during the SAREDS evaluation of August 1995, and the 'E' version used in the tests conducted by the Evaluation Panel in August 1996, is evidence in itself of this, but five 'Incident Reports' available from BASI confirm that SAR Pty Ltd has experienced problems over the years, including one involving a Cessna 310. [4]

4.15 Expert evidence against the reliability of PADS has already been documented in detail in this report. Many operators other than those employed by SAR Pty Ltd, have repeatedly encountered problems with the deployment of PADS and, in particular, with the functioning of the static line. During the ARDU evaluation, during 'pump drop' training by CAA, during the November 1996 training at Jervis Bay, and again in January 1997 when tested by ATS, the static line behaved in a manner so as to cause an unacceptable safety risk to the aircraft involved in the drop.

4.16 In the opinion of Mr Michael Jones of ATS, the problem has always been with the equipment, not the operator as asserted by Mr Gruzman:

Mr Gruzman has also made the assertion in other letters to me, which are in the public domain, that how would I know whether the dispatch was being conducted in accordance with procedures because I had never seen it done. Whilst I do not wish to trivialise the exercise, standing the PADS unit in the door and pushing it into the airflow is not a particularly technical exercise, and I think it is within my bounds as a test pilot to have assessed that as being conducted correctly and to make a comment that it was done correctly. [5]

4.17 Further to this, in the two recent tests claimed by Mr Gruzman to have been faultless (the 60 Minutes tests carried out in June and the Evaluation Panel tests conducted at Merimbula in August), outside evidence suggested that problems occurred then as well but were not revealed because the focus had been on the accuracy of the drop rather than on assessing the behaviour of the static line.

4.18 In his submission to the Committee Mr Neil Boag, a pilot with General Flying Services, [6] suggested that the controversy over reliability has arisen because the system developed by SAR Pty Ltd was specifically designed for one type of aircraft:

Mr Gruzman's PAD's unit appears to work well when dropped from the aircraft it was designed around, the C-310. However, the units applicability to other aircraft types appears to be minimal and this is for a number of reasons.

In the C-310 the unit is rolled out the door and is therefore aligned to the line of flight. When dropped from other aircraft types the unit sits upright in the door. When released from the aircraft the unit must turn 90 to align with the airflow and this happens at the end of the static line payout. … Obviously there will be a large force applied to the hard point of the aircraft at that time. …

Because the system works in the C-310, Mr Gruzman assumes incorrectly that it will work in all other types. [7]

4.19 Mr Boag concluded that the accuracy of PADS was irrelevant if unsafe conditions arose during its deployment. He further concluded that the current Airservices system was versatile and that even if the safety problems experienced with the PADS equipment purchased by Airservices were overcome and the equipment fully commissioned, it would still only form part of the search and rescue equipment needed by Airservices Australia. [8] Further to this, the Committee notes that while the Cessna 310 is not an uncommon aircraft, many CSUs use other types of aircraft in their search and rescue activities, and could not feasibly change to a C310.

4.20 However, of greatest importance is the fact that the two major faults found with the PADS equipment, the potential for erratic behaviour of the static line and associated risk of damage to the control surfaces of the aircraft, and the risk of uncommanded inflation of the liferaft within the aircraft, do not just contribute to the ineffectual deployment of PADS but, more significantly, pose a significant threat to the safety of the search and rescue crew members themselves.

Controversy Between CAA/ASA and SAR Pty Ltd

4.21 It is clear from the evidence presented to the Committee, both by Airservices Australia and from SAR Pty Ltd, that communications between the two organisations have for a long period been strained. Relations between CAA staff (in sections which were later subsumed by Airservices Australia) and Mr Gruzman deteriorated greatly after the 1991 Rockin Robin incident when Mr Gruzman's expressed views in an article which appeared in the Bulletin on 11 June 1991, which were severely critical of CAA and in particular CAA engineers.

4.22 The tenacity with which Mr Gruzman pursued the acceptance of PADS system by CAA/ASA is evident in the vast collection of correspondence presented by Airservices Australia to the Committee. Letters from Airservices to Mr Gruzman often began, for example: 'I refer to the letters sent from your office dated 28 and 29 February and 4, 7 and 10 March 1996 …'. [9]

4.23 As noted earlier, by the time the contract to purchase PADS had been completed communications between some officers in Airservices and SAR Pty Ltd had deteriorated to the extent that Airservices contracted work out, rather than use internal officers who had fallen out of favour with Mr Gruzman.

4.24 In the view of Airservices staff, Mr Gruzman was prone to misrepresentation. For example in June 1991 an internal memo noted: 'Mr Gruzman has been promoting his equipment since 1985. He has portrayed CAA's engineer's role entirely incorrectly …'. [10] And in another memo: 'Again Laurence Gruzman seeks to discredit [CAA] engineers in his efforts to sell his services'. [11]

4.25 Again in November 1992, CAA officers sought to counter allegations circulated in an article written by Mr Gruzman which criticised a video produced by SAR operations in Western Australia on its Single Lift Raft Kit. While Mr Gruzman stated that the video made 'some rather extravagant claims', [12] an internal CAA memo expressed the concern that the article by Gruzman contained 'a fairly emotive, inaccurate attack on [CAA] procedures'. [13]

4.26 CAA was then placed in a difficult position:

… if we don't respond to Gruzman's criticisms we may well be seen to be agreeing with them, yet I am wary about getting into a slanging match. … There is certainly a case for some action to be taken to correct the untrue statements made by Gruzman and to also ensure that both the politicians and the industry are aware of the true situation. [14]

4.27 In May 1993, the Acting Chief Executive of Airservices Australia, Mr D J Roser, wrote in reply to a letter from Mr Gruzman which had suggested that a tender be called for SAR systems:

I am concerned about the tenor of the other parts of your letter. You seem to insinuate that officers within the Authority are doing all that they can to avoid using or acquiring PADS. … I can assure you that rather than adopting the cavalier attitude, as you put it, we have made a careful assessment of competing systems, with the sole objective of adopting the safest and most effective. [15]

4.28 And, as a final example, a lengthy submission by the CAA to the House of Representatives Standing Committee on Transport, Communications and Infrastructure, which provided a critique of the submission presented by SAR Pty Ltd, stated:

… the CAA maintains that Mr Gruzman's submission contains many statements which are demonstrably not correct. … Contrary to the statement contained in [Mr Gruzman's] Submission, Australia and the CAA maintain an efficient and effective SAR service. … The Authority has not favoured its own supply-dropping system over Mr Gruzman's PADS through some misuse of the Authority's legislative powers, as Mr Gruzman alleges. [16]

4.29 In conclusion, it appears to the Committee that in his representations to Airservices Australia, Mr Gruzman's behaviour tended towards obsessive pestering and his writing prone to unsubstantiated allegation. Consequently, Airservices had great difficulty in dealing with him, even to the extent that outside consultants were engaged rather than use officers who had fallen out of favour with Mr Gruzman.

Role of the Board and Chairman

Timing of Decisions

4.30 Under the Chairmanship of Mr John Pascoe, the Board of Airservices Australia had made a firm decision that the PADS system had not been proved to be sufficiently reliable to warrant regular use. In fact, the staff of Airservices Australia were so concerned that the PADS units already in service were unsafe, that they had been decommissioned and removed from the authority's inventory. This conclusion had not been a hasty one, but rather one that had been arrived at over many years of testing and experience with the various versions of PADS, from 'A' to 'D'.

4.31 Then, at a single Board meeting, under the chairmanship of a new appointee, on the initiative of the Chairman under his 'Chairman's Report', on a subject for which no notice had been given in advance, nor any documentation provided, the Board made a commitment to expenditure of up to $1 million for an entirely new rescue system, should that system prove to be superior. [17] The decision of the Board ignored the long and convoluted historical involvement of CAA/ASA with PADS and the reservations held by Airservices Australia staff about its safe deployment, which had been well documented within that organisation. The Chairman himself admitted in evidence to the Committee that he had not read any of the previous PADS reports. His source of information had come primarily from the television program, 60 Minutes.

4.32 The Chairman clearly wished to resolve the matter as quickly as possible. The fact that the contract detailing conditions of the evaluation that was negotiated with Mr Gruzman contained a clause restraining SAR Pty Ltd from any further approach to any government instrumentality is indicative of the pressure the Chairman felt and his determination to have the matter settled 'once and for all'.

4.33 More importantly, the resolution passed by the Board did not require any further review or examination of the report it had itself commissioned from the Evaluation Panel to determine whether a such an expenditure should be made, nor did it include a tendering process or an explanation as to why the normal tendering procedures had not been followed.

4.34 Then, again with unseemly haste, when the Evaluation Panel produced a one page summary report of tests that had been conducted on a modified 'E' version, the Chairman of the Airservices Board decisively and rapidly agreed to purchase over 100 PADS units and associated equipment. This decision was made despite the fact that the Evaluation Panel had been unaware of exactly what modifications had been made from the 'D' version to the 'E' version, relying instead on the advice of the manufacturer that the necessary changes had been made, [18] and despite the fact that the were a significant number of differences between the equipment described in the manual then available and the equipment to be purchased. [19] In other words, the Panel did not seek to find out what differences had been incorporated to make a system that had repeatedly been found to be unsafe, safe.

4.35 Purchasing negotiations progressed with similar speed. The finalisation of negotiations with SAR Pty Ltd (on 4 September 1996) came less than two weeks after the Evaluation Panel had presented its summary finding to the Chairman (on 24 August 1996) and eight days before the Chairman had received its full report (on 12 September). Furthermore, Airservices undertook to have the new system implemented as a matter of urgency; that is, within 90 days of purchasing.

4.36 In defending his style of management in evidence to the Committee, the Chairman of Airservices Australia, Mr John Forsyth stated:

There is a culture in companies that I am involved with of being pro-active and trying to foresee events instead of being reactive and dealing with events after they occur. When I joined Airservices, I clearly made that statement. In the minutes of my first meeting there you will see the philosophy that I was adopting, and the board was prepared to adopt that philosophy.

As to whether the management and staff of Airservices are having difficulty because I want to do things faster than perhaps had been the norm in the past, you would have to ask them. I suppose I come from a commercial culture where, if something is worth doing, it is worth doing as quickly as you possibly can do it … [20]

4.37 Thus it appears that that the Board's prime consideration was to resolve the issue as quickly as possible. This is, however, in contravention of the Air Services Act 1995 which places an obligation on the Board, under Section 9 (1), to take as its most important consideration 'the safety of air navigation'. The Committee believes that if the Board had given due and proper consideration to this clause of the Act, the Board may have acted in a more circumspect manner. The Committee concludes that either the Board was not aware of its legal obligations under its enabling Act to take safety as its prime consideration, or that in this regard it chose to ignore them.

Purchasing Procedures

4.38 Under to the Audit Act 1901, Airservices Australia, as a public authority, is required to keep accounts in accordance with commercial practice. While Airservices purchasing policy is technically at the discretion of the Board, the authority's stated policy is to follow current Commonwealth policy. As stated in its Annual Report (1995-96):

Airservices Australia is committed to applying Commonwealth policy on promoting Australian industry. Competitive procurement is also undertaken.

The organisation normally invites public tenders for purchases of more than $100,000 while purchases under $100,000 are based on competitive quotation. [21]

4.39 Further detail of Airservices policy on procurement and purchasing is provided in its Procurement Manual. The primary procurement objective is to 'obtain value for money'. Principle (c) is to 'Seek an open and effective competitive environment or market place in which to deal with suppliers; and Principle (d) states that 'Suppliers are to be given equal opportunity to compete for procurements, and dealings with suppliers are to be fair and impartial'. [22]

4.40 In evidence to the Committee, Mr William Pollard, Airservices Chief Executive Officer, argued that the Board had taken into account the authority's procurement guidelines when making its decision:

Basically, the board followed the procurement manual that we have where they can make those determinations. In our procurement manual it refers to safety and public interest type purchases. That is what the board determined this was. In the resolution they actually included those words. They operated within the constraints of the procurement manual and, as you know, even if they had chosen to, they did not need to. In this particular case, the policies could have been changed by the board, but that was not the case. [23]

4.41 Mr Thomas Grant, General Manager of Corporate and Employee Relations, elaborated:

The Airservices act talks about safety being the first consideration. That is something that the board must have regard to. The procurement manual talks about quotations. Your question was about the limits. The limit is as follows: up to $1,000, an oral quote; between $1,000 and $100,000, three written quotations; and above $100,000, a tender.

However, in addition to that, there is a process for confining inquiries. In this section, it says that within the above limits that I have just read out 'inquiry may be further confined with delegate approval when' and there is a series of circumstances. The circumstances include things like that there is a degree of urgency such as to preclude tender processes and also where market testing has occurred through preliminary processes such as invitation to register interest and requests for proposal. There is also one that says that a supplier is the sole procurement source. They are all relevant to this particular circumstance.

… the board sets policy for the organisation, so these are criteria which management uses, but the board can write its own criteria if it wishes. The board used the two terms 'safety' and 'public interest', and they are both compatible with the act that covers our operations. The public interest was one of getting a better system in place as a matter of urgency. That is what relates back to these procedures for confining inquiry. What the board did was totally consistent with the way management would often see these things. So there is that link. The word 'safety' does not actually appear in confining inquiries. That is in the act. [24]

4.42 However, in passing a motion authorising expenditure of up to $1 million, the Committee believes that the Board did contravene it own procurement guidelines. In restricting the evaluation to SAR Pty Ltd equipment, the Board did not create an open and effective competitive environment. In placing impossibly short time constraints on the Evaluation Panel, the Board effectively excluded from consideration a company (RFD Pty Ltd) which otherwise may have been able to participate in the evaluation. In short, the normal process of calling for tenders was ignored.

4.43 As stated by Mr Grant, with delegated approval, procurement procedures may omit tendering when, inter alia, 'a supplier is a sole procurement source' or when 'there is a degree of urgency such as to preclude tender processes'. [25] However, the Committee does not believe that either of these two conditions could form the basis for a reasonable argument as to the Board's action in ignoring the normal tendering process in this instance.

4.44 In conclusion, the Committee believes that the Board erred in not following its own stated competitive procurement policy when the decision was taken to purchase the PADS units.

Internal Concern

4.45 The decision taken by the Airservices Board to convert from an established and internally accepted system of marine rescue to a system which had previously been eschewed by that very organisation's own staff, caused considerable concern among Airservices personnel. Internal memos provided to the Committee reveal that while there was a preparedness among staff to accommodate difficulties already known, it appeared to them that senior management was not committed to solving those problems.

4.46 On the same day that the purchasing negotiations were completed (4 September 1996), the Acting Manager of SAR, Mr Tony Marshall, wrote an internal memo to Mr Peter Evans, General Manager of Air Traffic Services, which expressed concern that Airservices had commenced negotiations on the purchase of an entirely new system of liferaft delivery based on a single page report from a Panel, the findings of which went counter to all previous experience and findings. [26] Further detailed criticisms contained in that memo included:

• the fact that PADS had not been tested in deep sea and strong wind conditions;
• the deficiency with the accuracy of the Airservices system identified during the ARDU testing had not been resolved prior to the Evaluation Panel's tests;
• detailed cost comparisons were not made (Airservices Australia delivery equipment costs about $150 per unit while PADS would cost about $7887 each);
• Airservices Australia was in the process of tendering for the supply of 12-person liferafts to replace the 10- and 15-person liferafts that had reached the end of their life, and the question of whether larger rafts could be dispatched with PADS had not been fully resolved; and
• the fact that implications for increased financial and logistic responsibilities which would be placed on CSUs had not been adequately considered. [27]

4.47 Staff were keen to point out that many of these matters needed to be resolved prior to purchase on the basis that it was 'inappropriate to purchase defective goods'. [28] However, scepticism remained that their concerns would be addressed. In the words of one officer: '… these issues should be considered prior to the purchase contract, but I get the impression that the juggernaut is rolling'. [29]

4.48 On 9 September 1996, Mr Marshall, signed the August 'Due Diligence Monthly Report'. In it he acknowledged the Airservices decision to purchase PADS and reiterated his 'commitment to ensure the training and transition is conducted efficiently and smoothly'. Following this, however, Mr Marshall listed seven concerns which, having been expressed previously, 'seem[ed] either not to have been heard or possibly ignored'. Those concerns included:

• the fact that evaluations seem to have focused more on pilot issues than on a balance between pilot, dropmaster, engineering, and the recipient;
• the fact that out of nine drops, the PADS liferaft failed to inflate twice;
• the possibility of an uncommanded inflation of a PADS liferaft inside the aircraft, threatening the safety of the crew and the airframe; and
• financial concerns. [30]

4.49 Again, in the September 'Due Diligence Monthly Report', Mr Marshall listed concerns about the PADS system; this time from video evidence taken by the Evaluation Panel. The four major concerns listed related to: the possibility of control surface infringement; lack of control in delivering the storpedo; proximity of raft to target (possibly too close); and the aircraft drop height (on one occasion dangerously low). In conclusion Mr Marshall noted: 'None of these issues are documented in the [Evaluation Panel] report, and appear to have been overlooked in the decision making process'. [31]

4.50 Faced with a purchasing fait accompli, staff alerted management to the fact that there were a number of important matters that needed to be addressed during the introduction to service process. For example, on 17 October 1996, David Arden, Airservices Dropmaster, expressed in an internal memo the view that problems already identified with PADS should be addressed before training commenced. His reservations included:

• the fact that he had not worked with PADS for 15 months and had not been briefed on the changes that had been made in the transition from the D model to the E model;
• concern that the required drop height of 100 feet above sea level was dangerously low;
• unresolved questions about the static line and uncommanded inflation, including problems encountered in the ARDU tests;
• unknown durability of the static lines and the trail lines;
• concern that the procedures proposed for training were inappropriate; and
• OH&S issues related to moving 65kg into and inside an aircraft. [32]

4.51 Then, when training was imminent, three Airservices Dropmaster Instructors (Dave Arden, Colin Campbell and Mike Barton) agreed to assist in the instruction of Civil SAR Unit personnel with the new delivery system only on the condition that concerns held about PADS were addressed first. These concerns included: methodology of training; lack of documentation; minimal knowledge of the PADS system by the instructors; and lack of experience in CSUs. In addition, the Facilities Management Division of SAR Maintenance had expressed concern about the lack of engineering orders and documentation, procedures to be adopted in the rigging and construction of the PADS unit, and the adaptation of the Airservices Australia inventory liferafts to meet compatibility requirements. Although a meeting was held between Airservices personnel and Navair representatives (Mr Frank Young and his Chief Instructor, Mr Rod Andrews) on 22 October 1996, the information provided was not sufficiently comprehensive to allay their concerns.

4.52 When training commenced and problems became apparent to Airservices staff, some became reluctant to be involved any further. As documented previously, the initial concern was that the company contracted to carry out the training (Navair) was not appropriately qualified. However, as time passed a greater concern emerged: management, it appeared, was ignoring the comments made by Airservices staff on the problems encountered with PADS training.

4.53 As expressed by Airservices Dropmaster Mr Dave Arden:

As discussed, not only am I more unhappy about the PADS training, but it seems that little - if any - action is being taken to address my concerns (both verbal and written) over the past few weeks. Last weekend's events confirmed my reservations rather than dispel them. … I confirm that I am unwilling to fly in an aircraft involved in PADS training by Navair unless some real action is taken. [33]

4.54 And, in the words of Mr Marshall:

It appears that all the concerns we have raised in the past, regarding [PADS], and the future training involvement by the Frank Young selected team of instructors, has now become evident. … It is also evident that these documented concerns forwarded to Head Office Management, have not been heeded. [34]

4.55 Thus it is clear from internal correspondence that the staff of Airservices Australia made repeated statements detailing concerns that they had both with the decision to purchase PADS and the manner in which subsequent training was carried out. The fact that this correspondence either failed to reach senior management and the Board, or was ignored, is of particular concern to the Committee.

Conclusions

Board Decisions

4.56 In making its decision to nominate an Evaluation Panel and, more importantly, to unconditionally abide by the results of that Panel, the Board neither made reference to the previous consistently negative field evaluations of PADS, including an RAAF evaluation, nor took into account a very recent brief to the Minister from Airservices Australia which had highlighted problems associated with the safety of PADS and which had stated emphatically that Airservices Australia management was not confident that PADS could be made safe.

4.57 The Committee concludes that in its resolution R 63/96, the Airservices Australia Board acted in an inappropriate manner in delegating decision-making powers to 'an independent panel of experts' (the Evaluation Panel), and in failing to provide for a review mechanism of that Panel's decision.

4.58 The Committee concludes that the Board, and in particular the Chairman, Mr John Forsyth, acted with unreasonable haste in the decision to purchase PADS equipment and to put that equipment into service as soon as possible.

4.59 The Committee believes that the Chairman's commercial philosophy that 'if something is worth doing, it is worth doing as quickly as you possibly can' was inappropriate to his position as Chairman of a government instrumentality the principle responsibility of which is 'the safety of air navigation'. The Committee concludes that because the Chairman requested from the Board, and received, authorisation to proceed unchecked, he must accept full responsibility for a decision that resulted in the expenditure of over $1 million on equipment that is currently unusable. The Chairman, in making his decision, placed too much emphasis on accuracy of the delivery system and insufficient emphasis on the safety of the crew involved in the delivery.

4.60 For these reasons, the Committee concludes that the actions of both the Board and the Chairman were imprudent to the point of negligence.

Commissioning of the PADS System

4.61 The Committee concludes that, in terms of target accuracy, the PADS system is unrivalled as a mechanism for delivery of marine rescue equipment. At the same time, however, the Committee agrees with independent expert evaluation that there are problems associated with the delivery of the system, and in particular with the behaviour of the static line, such that the safety of the crew may be put at risk.

4.62 The Committee believes that, regardless of the question as to whether the Airservices Australia Board should have purchased PADS equipment, rather than write-off the equipment, efforts should be made to put the equipment into service. However, because of the Airworthiness Directive, the PADS equipment cannot currently be used. Further developmental work is required to rectify the problem with the static line and to demonstrate to CASA that the equipment is safe. Technically this could be done either by SAR Pty Ltd or Airservices Australia.

4.63 However, the Committee believes that successful commissioning will also be contingent both on much improved relations between Airservices Australia and SAR Pty Ltd. The Committee notes that communications between Airservices Australia and the manufacturers of PADS, SAR Pty Ltd, have deteriorated to the extent that the satisfactory commissioning of PADS is now seriously hindered. The Committee believes that the PADS equipment will never be put into service unless a strong commitment is made by both parties both to overcome immediate communication problems and thereafter to continued cooperation. However, the Committee believes that, because of a long history of acrimony, this is not likely to happen without external intervention.

J Woodley

Chairman

26 March 1997

Footnotes

[1] Evidence, p. RRA&T 89.

[2] Letter dated 1 October 1996 from Mr Laurence Gruzman, SAR Pty Ltd, to The Hon Mr John Sharp, Minister for Transport and Regional Development.

[3] Letter dated 3 September 1996 from Mr Laurie Gruzman, SAR Pty Ltd, to The Hon Mr John Sharp, Minister for Transport and Regional Development. Rischbieth, Part 1 (Folder 1), p. 1.

[4] Evidence, p. RRA&T 138.

[5] Evidence, p. RRA&T 135.

[6] Mr Boag was a member of the original SAREDS Tender Evaluation Committee and was engaged to train pilots for the 1996 Evaluation Panel tests.

[7] Submission No. 1, General Flying Services Pty Ltd, pp. 7-8.

[8] Ibid, p. 8.

[9] Letter dated 14 March 1996 from Mr Bill Pollard, Chief Executive, Airservices Australia, to Mr Laurence Gruzman, SAR Pty Ltd. Rischbieth, Item 10 (Folder 2).

[10] CAA Electronic Memo dated 12 June 1991 (11:31am EST) from Neil McKay, Department of Technical Services, to Ron Lunt et al, Airservices Australia. Rischbieth, Item 10 (Folder 3).

[11] CAA Electronic Memo dated 12 June 1991 (11:01am EST) from Neil McKay, Department of Technical Services, to Ron Lunt et al, Airservices Australia. Rischbieth, Item 10 (Folder 3).

[12] Article by Mr Laurence Gruzman, dated Monday 26 October 1992 Comparison of PADS and SLRK, p.1. Rischbieth, Item 10 (Folder 3).

[13] CAA Western Australia Field Office Memo dated 11 November 1992 from Kim Jones to Buck Brooksbank. Rischbieth, Item 10 (Folder 3).

[14] Ibid.

[15] Letter dated May 1993 from D J Roser, Acting Chief Executive, CAA, to Mr Laurence Gruzman, SAR Pty Ltd. Rischbieth, Item 10 (Folder 3).

[16] House of Representative Standing Committee on Transport Communications and Infrastructure, CAA Response to Submission 124 from SAR Pty Ltd " Search and Rescue in Australia", p. 2. Attached to Electronic Memo dated 6 April 1995 from Ken McLeod, Air Traffic Services, to Sean (?). Rischbieth, Item 10 (Folder 2).

[17] Evidence, pp. RRA&T 165-166.

[18] Evidence, pp. RRA&T 34 & 202.

[19] Evidence, pp. RRA&T 38-39.

[20] Evidence, p. RRA&T 188.

[21] Airservices Australia Annual Report 1995-1996, p. 36.

[22] Airservices Australia Procurement Manual Sections 1, 2 & 3 (Last Amended 14/3/97), Section 1.1.2 Principles.

[23] Evidence, p. RRA&T 56.

[24] Evidence, p. RRA&T 56.

[25] Airservices Australia Procurement Manual Sections 1, 2 & 3 (Last Amended 14/3/97), Section 1.3.15 Confining Inquiry.

[26] Memo dated 4 September 1996 from Mr Tony Marshall, A/g Manager, SAR, to Mr Peter Evans, General Manager, Air Traffic Services, Airservices Australia, Re: Response to Gruzman fax 1st September 1996. Rischbieth, Item 10 (Folder 2).

[27] Ibid.

[28] Electronic memo dated 5 September 1996 from Neil McKay, Mechanical & Electrical Engineering to Tony Marshall, SAR, Airservices Australia, et al, PADS Purchase and Implementation Issues. Rischbieth, Item 10 (Folder 2).

[29] Electronic memo dated 6 September 1996 from Chris Howell, FMD ASMB, to David Gale, PADS Issues - Pre Purchase of for Mr Young? Rischbieth, Item 10 (Folder 2).

[30] Air Traffic Services Division Due Diligence Monthly Report for the month of August from A P Marshall, A/Manager, SAR, Airservices Australia, to John Wilson, signed and dated 9/09/96, Attachment Due Diligence Report on the PADS Issue. p. 1. Published in Australian Senate Rural and Regional Affairs and Transport Legislation Committee Examination of Estimates, op cit, p. 1916.

[31] Air Traffic Services Division Due Diligence Monthly Report for the month of September to John Wilson from A P Marshall, A/Manager, SAR, Airservices Australia, signed and dated (erroneously?) 7/09/96, p.5. Published in Australian Senate Rural and Regional Affairs and Transport Legislation Committee Examination of Estimates, op cit, p. 1908.

[32] Notes dated 17 October 1996 by David Arden Concern About PADS. Rischbieth, Item 10 (Folder 2).

[33] Memo dated 14 November 1996 from David Arden to Tony [Marshall?] and Dave [Cole?]. Rischbieth, Item 10 (Folder 2).

[34] Memo dated 24 October 1996 from Dave Cole, CSU Manager, to Tony Marshall, SAR Manager. Rischbieth, Item 10 (Folder 2).