Speaking to Defence Connect, the former parliamentary secretary for defence procurement said the current process is "less than optimal" but there is a way to improve.
"I think it would be far better to conduct procurement processes from a national benefit perspective for defence and the federal government to be looking at it and saying, 'Well, how do we optimise the economic outcome for the country?'" said Combet.
"And therefore, 'to achieve that we'll conduct the procurement in this particular manner'."
The former trade unionist criticised the federal government for the current process, which he said essentially sees any costs involved transferred from the Commonwealth to the states.
But the former Labor minister said the Turnbull government has gotten closer to a more balanced procurement process with the shipbuilding program.
"I think the Turnbull government's closer to that with the shipbuilding program. Having said, 'Well, there's been a lot of investment in infrastructure in Techport in South Australia. That's where the subs have been sustained, the Collins is being built. The state government's a keen participant. There's economic need in that state. The closure of the auto sector will hit hard in South Australia. Let's go with that.' And to bring that out and announce that first up, that let's everyone sort of whinge and carry on for a little while but then focus on the real thing," Combet said.
"And so in contrast to LAND 400, there is good co-operation between the stages around that. I'm talking to my New South Wales and South Australian colleagues, and Western Australia in particular, about how we can bring to bear the capabilities that happen to be resident in each of those jurisdictions. "