$50bn Australian submarines contract awarded to French firm DCNS

Posted on 26 Apr 2016 by Tim Brown

The Turnbull Government has announced that the next generation of Australian submarines will be built at the Adelaide shipyard, with DCNS of France selected as the preferred international partner for the design of 12 future submarines.

In a statement, the Prime Minister Malcolm Turnbull said the decision would secure thousands of jobs and ensure the project will play a key part in the transition of the Australian economy.

Along with the recent naval shipbuilding announcements, the Government said its commitment to a local build of the new Australian submarines will help “create a sustainable Australian naval shipbuilding industry and provide the certainty that industry requires to invest in innovation and technology and grow its workforce”.

The Future Submarine project is the largest and most complex defence acquisition Australia has ever undertaken and has come in at a cost almost five times higher than some analysts originally predicted.

The AUD$50bn (US$38.5bn,  £26.6bn) investment will directly sustain around 1,100 Australian jobs and a further 1,700 Australian jobs through the supply chain.

Comparatively, the US navy recently developed and launched an autonomous self sailing submarine hunting ship for only US$20m (AUD$25m), or around 0.5% of the Australian submarines budget.

DCNS wins Australian Submarines Competitive Evaluation Process

Today’s announcement follows the comprehensive Competitive Evaluation Process (CEP) involving DCNS, TKMS of Germany and the Government of Japan.

During the announcement, the Government took the opportunity to thank both TKMS and the Government of Japan for high-quality proposals and their ongoing commitment to Australia and their participation in the process.

The CEP was led by head of the future submarine program, Rear Admiral Greg Sammut AM CSC, and general manager submarines, Rear Admiral Stephen Johnson USN (retired), who was previously in charge of the program to replace the Ohio Class ballistic missile submarines.

The process was overseen by an independent Expert Advisory Panel, chaired by former secretary of the US Navy, Professor Donald Winter. It was peer reviewed by Vice Admiral Paul Sullivan USN (retired) and Rear Admiral Thomas Eccles USN (retired).

According to the Government, the decision on the Australian submarines was driven by the ability of DCNS to best deliver capability requirements including: superior sensor performance and stealth characteristics, as well as range and endurance similar to the Collins Class submarine.  The Government’s considerations also included cost, schedule, program execution, through-life support and Australian industry involvement.

The Turnbull Government is also conducting a strategic review of the workforce, skills and infrastructure needs to deliver this key capability as part of its Naval Shipbuilding Plan, to be released this year.  The Plan will bring together the requirements for the Future Submarine program, along with the more than $35bn Future Frigate program and the more than $3bn Offshore Patrol Vessel program, as part of the broader continuous naval shipbuilding philosophy to which the Government is committed.

The Turnbull Government will maximise Australian industry involvement in the program and will work closely with DCNS to identify opportunities for local businesses to integrate into the supply chain.

While the announcement has been greatly welcomed by industry, questions remain over whether Australia truly needs a submarine fleet, particularly when such a large expenditure is set to be made at the expense of other potentially more strategically important investments.