The Buzz

Spend Like America to Get a Next Gen Navy in Australia

The only way that the current methodology makes any sense is that if Defence plans to end the competitive selection process for naval projects and enters into a series of long-term sole source contracts, as takes place in a number of countries including Britain, Sweden, Spain, Germany, Japan and the United States.

This would constitute a radical overhaul of the entire procurement system and is dependent on an extremely strong local industry base that Australia unfortunately doesn’t have. In all of these cases, governments are contracting with their own industry—Britain with BAE Systems, Sweden with Saab, the United States with Electric Boat and so on. This means that both parties—government and local industry—have a mutual interest in negotiating reasonable contracts because they’re interdependent.

The same logic won’t apply if Australia sought to enter into such an arrangement with an overseas company, which could simply pull out of Australia if conditions weren’t sufficiently favorable. But if the Government is going in this direction they should make it really commercially attractive and add SEA 5000 plus SEA 1180 to the mix. Both the French and German bidders make excellent surface ships; the Japanese only slightly less so. Just think of the package deal that could be done if Defence competed not only the future submarine but most of the surface fleet as well.

Kym Bergmann is the editor of Asia Pacific Defence Reporter and Defence Review Asia. This article first appeared in ASPI's the Strategist.

Image: Flickr/Marion Doss