Federal government-owned shipbuilder ASC won't have a role in building the new submarine fleet in Adelaide, a Senate hearing has been told.
The French shipbuilder commissioned to design and build 12 new Australian submarines has confirmed there is no subcontracting role for government-owned Adelaide company ASC in the multibillion-dollar project.
A Senate hearing was told on Tuesday ASC will continue to sustain the Navy's existing six Collins Class submarines, which will be withdrawn from service by 2036.
However Defence officials insist French firm DCNS, as the contracted designer, was always going to be involved in building the new fleet itself.
"The extent to which ASC would or would not be involved in that process was not ... fully defined," Rear Admiral Gregory Sammut explained to the hearing.
He said some of ASC's workforce would be shared with DCNS when shipbuilding starts but the overall workforce would have to grow.
"Do you think the people of Adelaide were entitled to an announcement on this?" Labor senator Kim Carr said reacting angrily to the revelation.
"For many people, the information we have heard today, it would be significant news, it would be a shock to them."
DCNS Australia acting chief executive Brent Clark told the hearing he had a "gentleman's agreement" with ASC interim boss Stuart Whiley not to raid his workforce and steal talent who are specifically needed to work on the Collins Class subs.
He confirmed there were no subcontracting arrangements with ASC in the pipeline.
Senator Carr and crossbencher Nick Xenophon grilled Mr Clark on why he wasn't standing by his predecessor's claim that 90 per cent of the work done by DCNS will be done in Australia.
Mr Clark said he didn't want to give a misleading figure but there was a target of greater than 60 per cent, with the company still working with Defence officials on the requirements.
Senator Xenophon was unimpressed saying it was the biggest procurement in Australian defence history.
The first steel on the subs is expected to be cut by 2022 and the first vessels in the French-designed fleet will enter service in the early 2030s.