Doubt over inclusion of local build partners in SEA 5000
by ANZDD on 08-Sep-2017
Austal and ASC Shipbuilding’s participation in the $35 billion Future Frigates project looked promising prior to the release of the request for tender in March this year, a Senate committee has heard.
Evidence presented by Austal chief executive David Singleton and ASC Shipbuilding CEO Mark Lamarre at the Senate hearing held Friday 8 September said there was an abrupt change in their engagement with all three international contenders after they received the request for tender from the government, which had no requirement for the use of an Australian shipbuilder - with specific reference to ASC.
"Prior to the release of the RFT we, Austal, were heavily involved with all three of the foreign design companies to provide an Australian shipbuilding solution to their offer to the government," Singleton told the hearing.
"When the RFT came out that was really the end of that engagement between us and those companies."
ASC Shipbuilding's Mark Lamarre echoed these sentiments, adding "I would say there was a change [in dialogue] after the issue of the RFT, absolutely."
Since the leaking of the RFT documents in August, South Australian senator Nick Xenophon and Victorian senator Kim Carr have put forward motions in the Senate that the tender process be scrapped and started again with a mandate of inclusion of an Australian shipbuilder.
Defence has claimed the reestablishment of the tender process would set the project back by up to two years.
Later in the hearing, Senator Kim Carr presented claims that Capability Acquisition and Sustainment Group (CASG) deputy secretary Kim Gillis and other CASG representatives spoke with all three international tenders and told them to ignore Austal and ASC Shipbuilding's teaming arrangement to act as builders on the project.
"I'm advised that Kim Gillis and other members of Defence phoned each of the designers and informed them to ignore the teaming agreement, is that true?" the Senator put to Department of Defence representatives, who confirmed there had been contact with the down-selected organisations following the Austal and ASC announcement.
"There was contact with the designers to reassure them that the integrity of the tendering process was maintained," said Associate Secretary of the Department of Defence Brendan Sargeant.
In June this year, Austal and ASC Shipbuilding entered into a teaming agreement for the Future Frigates project, which would see the companies pool their resources, skills and experience and act as one in support of the program.
Spanish company Navantia, Italian firm Fincantieri and UK originated BAE Systems have been shortlisted to design, build and sustain the nine Future Frigates to replace Australia's existing Anzac frigate fleet.
The nine vessels are scheduled to begin construction in Adelaide in 2020.
A decision on the successful tenderer is expected by April next year.
Following the leak of the RFT, all three project contenders have backed the use of an Australian workforce for the $35 billion project.
BAE Systems Australia chief executive Glynn Phillips said its parent company is committed to using an Australian workforce
"Our commitment is to build the ships in Adelaide and maximise Australian content in every way possible," said Phillips. "As we have said previously, we will build an Australian ship with an Australian workforce. The current shipbuilding workforce in South Australia is highly skilled and lies at the heart of our plans to construct the vessels. If you are a South Australian shipbuilder today, you can be confident you will have a great future if we are successful."
Chairman of Fincantieri Australia Dario Deste specified a strong contribution of a South Australian and Adelaide workforce for the project if the Italian company is named as the successful tenderer.
"Fincantieri will have more say in coming months but our proposal will create long-term security for the Adelaide shipbuilding workforce, build a new advanced manufacturing industry nationally and would join Australia to our global network of 20 shipyards on four continents," said Deste.
Navantia Australia's managing director Donato Martínez said Navantia "is committed to using the Adelaide workforce and Australian industry for the F-5000".
"We have already been working closely with the shipbuilding workforce in Osborne for a number of years," Martínez said.
"When we already have an experienced shipbuilding workforce in Adelaide, why would we look anywhere else?"