The Australian Defence Materiel Organisation (DMO) says it will continue contract negotiations with Boeing Australia and Israel Aircraft Industries (IAI) for the Australian Army’s Joint Project 129 tactical unmanned air vehicle requirement, despite having asked second-placed contender ADI, teamed with Elbit Systems, to revalidate its Hermes 450 bid.

ADI was approached in late May after DMO negotiations with Boeing Australia, which is offering the IAI I-View 250 system, faltered after five months of talks. Negotiations are believed to have stalled on in-service support issues with the I-View system. Boeing Australia and IAI were named as preferred supplier for the project in mid-December, some two months after the DMO started preliminary negotiations.

The DMO says “contract negotiations have taken much longer than…anticipated or expected. DMO sought clarification from Boeing on a number of critical terms and conditions before announcing them as preferred tenderer. Based on the Boeing response, the DMO was confident that a negotiated outcome could be achieved, and in a reasonable time. During the negotiations, some issues have emerged which have taken longer to resolve than initially expected.”

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