Speaking at Defence Senate estimates, Gillis confirmed conversations between Lürssen and Austal are underway but confirmed Defence is expecting the proposed Lürssen supply chain will be used, rather than Austal's already established supply chain.
The comments echo those of Austal chief executive David Singleton, who previously told Defence Connect he is expecting Lürssen's supply chain to be used.
"I think initially, because of the fast ramp-up to build, it is likely that the existing supply chain for this vessel will be used, and then every opportunity will be taken thereafter to increase the amount of Australian industry content," Singleton said on the day of the OPV announcement.
Austal has been introduced to the project to build 10 of the 12 OPVs, despite Lürssen only partnering with ASC and Civmec.
Lürssen beat out bids from Dutch company Damen, which was also partnered with ASC and Civmec, as well as German company Fassmer, which was in a joint venture with Austal, for the SEA 1180 project.
ASC will build the first two vessels in Adelaide at its Osborne shipyard.