The defence industry minister has played down the messy negotiations between German designer Lurssen and Western Australian shipbuilder Austal over the offshore patrol vessel project.
The federal government, in April, appointed a mediator to end the stalemate.
Last year, the government made a surprise announcement it wanted a role for Austal in the $4 billion project despite the company being connected to an unsuccessful rival German bid.
Christopher Pyne said if Austal and Lurssen can't reach an agreement the German firm, Civmec and government-owned shipbuilder ASC will deliver the project.
Asked if there would be an inferior outcome if Austal has no role Mr Pyne told reporters: "No, it doesn't mean that at all".
He said commercial negotiations were ongoing.
"It's a matter for Lurssen and Austal to negotiate, I'm not part of those negotiations," he said.
Construction on the patrol boats will begin at the end of this year in South Australia.
While the first two boats will be built in Adelaide, the remainder will be put together in Henderson, Western Australia, from 2020 - when the construction of the future frigates begins.
The 12 new vessels will replace the existing Armidale Class patrol boats.
