An interim contract has been struck between the Commonwealth and BAE Systems Australia for the Hunter class frigate program.
Minister for Defence Christopher Pyne announced Defence and BAE Systems Australia have entered into an Advanced Work Arrangement (AWA).
The AWA will cover ongoing work on the $35 billion program, ahead of agreeing the head contract.
“This is a very important and early milestone in the development of an enduring world-class naval shipbuilding industry in Australia," Nigel Stewart, BAE Systems’ Managing Director for the Hunter Class, said. "The AWA demonstrates a commitment by both BAE Systems and the Australian Government to ensure timely progress on this critical defence program.”
Minister Pyne said the AWA is an important first step in the process of transitioning ASC Shipbuilding into BAE Systems in preparation for the nation’s biggest shipbuilding program.
“The AWA is an interim contract which enables BAE Systems to continue to mobilise its workforce and progress the critical work required to ensure the project remains on track to start production in 2020,” Minister Pyne said.
“The process of transitioning ASC Shipbuilding into BAE Systems is well underway, and ASC Shipbuilding, BAE Systems and the Department of Finance are making good progress in negotiations.”
Work continues on negotiating the head contract for the program, with signature expected later in the year after the ASC Shipbuilding transition is completed.
Defence will execute the head contract with ASC Shipbuilding - as a wholly owned subsidiary of BAE Systems - for the delivery of the Navy’s nine Hunter class frigates and associated support system components.