Minister for Defence - Statement on Australia's future submarine

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The Hon Kevin Andrews MP

Minister for Defence

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9 February 2015

I was delighted to visit the Australian Submarine Corporation (ASC) with a number
of my South Australian parliamentary colleagues earlier today. This was my second
formal visit to ASC as the newly appointed Defence Minister, underscoring the
importance the Abbott Government places on South Australia as a centre for defence

At ASC, I confirmed that decisions on Australia’s replacement submarines will be
based on a competitive evaluation process, managed by the Department of Defence.
This process will take into account Australia’s unique capability requirements as well
as considerations such as cost, schedule, technical risk and value for money.

Any Australian company that can credibly meet these requirements will be considered
on merit, as will potential international partners.

My Department has a rigorous process for determining the appropriate acquisition
strategy to be used for each major capability acquisition. Key factors such as the
capability required, the available options and strategic requirements are all considered
in the development of the specific acquisition strategy.

Notwithstanding much recent commentary, there are more effective and efficient
ways to run a competitive evaluation process for complex capabilities such as
submarines than just open tender. I have been advised that Defence is not aware of
any submarine project around the world that has been put out to open tender.

Previous governments, including the recent Labor Government, have used
competitive evaluation processes to make major defence capability acquisitions. For
example, in 2010 Defence selected the MH-60 naval helicopter capability after
undertaking a competitive evaluation of the respective offers.

The Government’s approach to acquiring replacement submarines will follow the
process in place for major defence projects since the 2003 Kinnaird reforms to
Defence procurement.

This process was used by Labor when they were in government. There will be a
thorough “two pass” Cabinet process, and we will receive advice from Defence to
ensure we get the very best capability.

The Government will ensure that Australia obtains the most capable conventional
submarines in the world while avoiding a capability gap after the current Collins class
submarines are retired from service.

The number of future submarines and other key capability requirements including
range, endurance and combat system to be acquired is being considered through the
Force Structure Review.

Whatever decision is taken, there will be more submarines and that means more jobs
for South Australia.

It is good news that in South Australia over the next four years – subject to the
outcomes of the Defence white paper – there will be up to $4.4 billion in Defence
spending for building and sustaining Defence materiel. This year alone there is
almost $1 billion worth of Defence procurement and sustainment work being
undertaken in South Australia.

Media Contact:

Brad Rowswell  (Minister Andrews’ Office)  0417 917 796

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