Govt ties itself in knots on submarines

Defence Minister Kevin Andrews (AAP)

The Abbott government has faced a tough job explaining how it plans to acquire new submarines which will be Australia's biggest ever defence procurement project

The Abbott government is pressing ahead with a process for buying replacement submarines it found questionable when Labor was in office.

But the government has tied itself in knots explaining the "competitive evaluation" it plans to use to select a new design and builder for the boats to replace the ageing Collins fleet.

It is Australia's largest ever defence procurement, estimated to be worth $20 billion to $40 billion.

There has been speculation the government has all but decided to buy Japanese Soryu-class submarines, with the vessels built wholly or partly in Japan.

There would be limited fit-out work for Australian shipbuilders, or even none at all.

Not so, the government insists.

Defence Minister Kevin Andrews visited the ASC yard in Adelaide on Tuesday and said the government was determined to get the best value for money and the best capability available.

"You would expect the Australian government to give Australian suppliers a fair go," he said, adding that a competitive evaluation process would be part of that approach.

Labor defence spokesman Stephen Conroy said there was no such thing as a competitive evaluation process in the defence procurement manual.

He demanded an end to "this shambles".

Labor wants Prime Minister Tony Abbott to announce a competitive tender process with a funded portion that allows bidders to bid against a set criteria.

Australian involvement in the process was a key to South Australian Liberal senator Sean Edwards voting against a leadership spill motion in the Liberal party room on Monday.

He revealed Mr Abbott had assured him there would be a full competitive tender process.

On Tuesday, Senator Edwards conceded those were his words, not the prime minister's.

"I am happy that Australian shipbuilders and the companies that supply those companies are included," he told Sky News.

Last Friday they weren't.

Mr Abbott told parliament that "one way or another" Australia would have a bigger submarine fleet which would mean more jobs in South Australia.

"There will be a competitive process ... and Australian entities should be part of it. They are certainly encouraged to be part of it."

A defence industry conference in Canberra heard competitive evaluation was often used when a full or limited tender process wasn't thought necessary.

It was recently used to replace Vietnam War-era Caribous transport planes.

The losing bidder complained and while the National Audit Office expressed some minor concerns, it found the procurement complied with Commonwealth practice.

Source AAP

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