Defence rejected ASC as Future Subs builder

In what can only be interpreted as a slap-in-the-face for Australia’s Defence Industry, and in particular Australian shipbuilders, submarine tender response documents released to the Senate reveal that Naval Group (then DCNS) were prepared to partner with ASC in the build of the Future Submarine, but Defence later rejected that proposal in favour of giving the build to a foreign designer.

“This is treachery," said Senator Rex Patrick. “Coupled with a tender that explicitly prohibited Australian shipbuilders, ASC and Austal, from tendering for the $35 billion Future Frigate program, it’s clear that Defence has betrayed Australian industry in the execution of its naval shipbuilding agenda.

“Defence Minister Marise Payne and Defence Industry Minister Christopher Pyne talk about developing a sovereign naval shipbuilding capability, but at every turn they have allowed the Defence Department to sabotage that objective.” 

The Government tabled Naval Group’s Future Submarine Australian Industry Plan late on Thursday night under the cover of budget responses.

The documents include a section entitled ‘Working in Partnership with an Australian Build and Sustainment Organisation” [Page 47] which is completely blacked out. In a similar section of the document [Page 50] there is a diagram which shows the 1700 naval architects, marine engineers, draftsmen, boiler makers, hull welding, electricians, mechanical fitters, pipe fitters and welders, painters, production managers and production support personnel from ASC that would be used in the build.

“The Government has tried to cover-up the story of ASC involvement”, said Rex.  “But unfortunately for them the diagram in the formal tender response is identical to a promotional brochure released by Naval Group in the final stages of the Future Submarine program that makes it clear that Naval Group intended to use a strategy “to combine the capacity of Naval Group and ASC into one production system” in a “two shipyards as one” approach – an approach Defence has rejected.

“Why has Defence blacked out all the details in relation to ASC building these submarines? The answer is simple; because they didn’t want their treachery revealed."

At 3pm last Thursday, after being ordered into the Senate to explain her actions in refusing the Senate access to the controversial documents, the Minister told the Senate:

In fact, if you know anything about tendering, if you know anything about significant contracts and if you know anything about national security then you would be of the view that it is perfectly reasonable, it is appropriate and it is proper that the government properly consider the circumstances under which information is publicly released where the release may have an impact on international relations and where it may unfairly prejudice the commercial interests of an entity or, indeed, of the Commonwealth. This government, perhaps unlike Senator Patrick, takes those responsibilities seriously. Further, unlike Senator Patrick's approach, this government will always act responsibly on such matters, especially when it relates to a program of such importance to our national security and to international relations.

Less than five hours later, Minister Payne tabled the documents, albeit with some elements redacted. For over a year Defence had been trying to keep the document from former Senator Xenophon and then from Senator Patrick. 

“Sometime between 3pm and 8pm on Thursday the Minister did a spectacular high speed backflip”, said Rex.

"Defence has slowly been working to ensure Australian shipbuilders are removed from the naval shipbuilding program. They want our new subs built by a French company, supply ships built in Spain, the Future Frigates built by an Italian, Spanish or UK company and now WA shipbuilder Austal removed from the running of the Offshore Patrol Vessel, meaning those vessels will be built predominantly by a German company. 

“This has to stop. On Wednesday I introduced a Sovereign Naval Shipbuilding Bill into the Parliament that will require all future Navy vessels to be built in Australia by companies that are neither foreign controlled or subsidiaries of a foreign company. We need an Australian Navy built in Australian shipyards by Australian shipbuilders."

The tabled tender documents can be found here. The promotional brochure released by Naval Group in the final stages of the CEP available on request.