AFP, SYDNEY: Canberra appeared to rebuff a bid by US defense firm Northrop Grumman for a six billion dollar (4.7 billion US) contract to build three Australian warships, insisting the vessels would be made by Australians in Australia.
Defense Minister Robert Hill said there had been no change in tender requirements announced in October for the three air warfare destroyers — that the ships be built in Australia by a majority Australian-owned firm.
In his October announcement, Hill said the successful shipbuilder would also be required “to satisfy a range of price and non-price criteria” seen as aimed at guaranteeing the vessels would be made at home.
But shortly before Christmas the government revealed that Northrop Grumman, which has a long history of building warships for the US Navy, had bid for the contract alongside two Australian firms.
The US bid raised concerns that Prime Minister John Howard's government, one of President George W. Bush's closest military allies, could let some or all of the contract go to the Americans.
Hill said Thursday that Australians “welcome the interest and competition in the project — that's a healthy sign” but this would not change the requirement the ships be built in Australia.
Treasurer Peter Costello declined to comment directly on the Northrop Grumman tender, but indicated it was possible the company was in partnership with an Australian firm.
“There is a tender which is going on at the moment, the tenders will be assessed in accordance with the conditions and it won't be off-the-rack shopping for an air warfare destroyer.”
Two Australian firms, Tenix Defence in Melbourne and the state-owned Australian Submarine Corporation in Adelaide, are the other bidders.
While some defense industry analysts have speculated that Washington was pressuring Australia to use the Northrop Grumman design, possibly jointly building the ships in Australia and Mississippi, the head of the South Australian Defense Industry Advisory Board said this was not feasible.
“To try and build it in two countries gives it a level of complexity that you simply wouldn't wish,” said Kevin Scarce, a retired rear admiral
“I'm quite confident that we can build it here in Australia,” he said.
The government plans to choose a shipbuilder, possibly by March, which will then assist in selecting a design, with construction to start around 2007.
