The Australian government’s Future Submarine Program has reached a major milestone with the conclusion of negotiations between Defence and Naval Group for the amendments to the Strategic Partnering Agreement. This will see Naval Group’s commitment to spend at least 60 percent of the contract value in Australia over the life of the program reflected formally in the Strategic Partnering Agreement, supporting Australian jobs in the defence industry. The amendments ensure that the achievement of Naval Group’s commitment is now a contractual obligation, measured during the course of the Program, driving Australian industry involvement as the Attack class submarines are designed and delivered.

Acting Minister for Defence Marise Payne said the conclusion of these negotiations reflects the government’s joint commitment with Naval Group to Australian jobs, Australian industry and Australian sovereignty. “Beyond maximising opportunities for engagement with Australian industry, this will also ensure that the Morrison government’s requirement for a sovereign Future Submarine capability is met,” Payne said. “Importantly, the amendments have been incorporated to uphold the current structure of the Strategic Partnering Agreement, which the Auditor General concluded had established a fit-for-purpose strategic partnering framework that addresses this government’s objectives for the program. These include maximising Australian industry involvement in all phases of the program. Today’s announcement builds on the opportunity for industry to participate in the manufacture of equipment designed by Naval Group worth hundreds of millions of dollars across the 12-boat fleet.”

The amendments complement existing requirements under Defence’s contractual arrangements with Naval Group to drive Australian industry capability. This includes establishing procurement organisations in Australia, and the need to approach the Australian market in the first instance for the majority of equipment. Naval Group will continue to report the level of contract expenditure in Australia during the course of the Future Submarine Program.

Naval Group global Chief Executive Officer Pierre Eric Pommellet visited Australia last month, and met with Commonwealth officials for talks on matters including the joint 60 percent agreement. Pommellet said, “Naval Group is fully committed to supporting the development of Australia’s sovereign submarine capability. I have been very impressed by the existing capacity of Australia’s manufacturing sector, and its enthusiasm for the Attack Class project,” he said. “This program will deliver to the Royal Australian Navy 12 regionally-superior Attack Class submarines which are specially designed for Australia’s unique conditions. But it will also create a new and sovereign submarine building industry in Australia. Strong local supply chains will ensure that Australia has new self-reliance in this critical defence capability.”

Naval Group Australia Chief Executive Officer John Davis said his staff were already working with hundreds of local businesses to build greater self-reliance and sovereignty in the Australian defence manufacturing sectors, and were proud of their commitment to local jobs and industry. “There will be increasing levels of local content in each of the 12 Attack Class submarines, as we continue working with local businesses to boost Australia’s sovereign capability,” Davis said. “Ensuring that at least 60 percent of the Attack Class contract value is spent locally will create hundreds of Australian jobs, for the long term, in new supply chains around the country.”


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