The government has said the multibillion-dollar Offshore Patrol Vessel contract is now on track, however, Austal and Lürssen remain in negotiations.
Defence Industry Minister Christopher Pyne confirmed the contract between Lürssen and the government has now been signed, but no agreement has been reached between the German designer and West Australian shipbuilder, Austal.
The first two OPVs will be built at the Osborne Naval Shipyard in South Australia by ASC, with construction starting this year. The remaining 10 will be constructed at the Henderson Maritime Precinct in WA from 2020.
Austal was introduced to the project to build 10 of the 12 OPVs, despite Lürssen only partnering with ASC and Civmec.
The government has confirmed Civmec will provide the steel from Australian suppliers for all 12 OPVs.
Lürssen was named as the preferred designer for the project in November last year, beating 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.
Capability Acquisition and Sustainment Group Deputy Secretary Kim Gillis offered certainty to Australia’s small businesses that were preselected as part of Lürssen’s supply chain for its Offshore Patrol Vessel bid, telling Senate estimates last year that Defence is expecting the proposed Lürssen supply chain will be used, rather than Austal's already established supply chain.
Austal chief executive David Singleton also 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.
The OPVs will have an important role protecting Australia’s borders and will provide greater range and endurance for the Navy than the existing patrol boat fleet.