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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