Australia Hammers Out Agreement with Naval Group

March 23, 2021 – The Morrison 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 per cent 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.

The Acting Minister for Defence, Senator the Hon Marise Payne said the conclusion of these negotiations reflects the Morrison 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,” Minister 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.

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