According to a report released this week, negotiations have resumed between Defence and Naval Group regarding the impasse over a strategic partnering agreement (SPA) for Sea 1000.
The SPA outlines conditions that will last for the life of the program. Negotiations were supposed to conclude in 2017, but the report quotes sources as saying that this timeframe was unrealistic. The SPA schedule has reportedly been amended several times.
“This is a long complex program, and until final design issues are settled with the Commonwealth, we need to build the right foundation,” French Ministry for Foreign Affairs special representative for Australia Ross McInnes explained to ADM last week.
“The Commonwealth will have to judge what priorities they want in terms of industry content.”
Negotiations are headed by Jean Michel Billig, Naval Group’s executive director for the Australian submarine program, and Rear Admiral Greg Sammut, head of the Future Submarine Program in CASG.
The talks follow a visit to Australia by French armed forces minister Florence Parly, who met with Minister for Defence Christopher Pyne.
“Discussions are expected to drive movement over the next two weeks on major dispute issues that the Australian side is reportedly taking a tough line. These include the length of warranty periods to cover potential defects and the implications on high-level co-operation and technology transfer in the event of a merger between Naval Group and Italy’s Fincantieri,” the report said.
“Agreement on the principles will require several weeks of drafting and Australian government approvals that are unlikely to be received before January at the earliest, followed by Naval Group undertaking its own approvals procedure.”
The report notes that RADM Sammut has been “authorised by government to utilise an underspend in the now-expired design and mobilisation contact.”
ADM understands Naval Group Australia has an unofficial hiring freeze until such time as the contract is signed for the next phase of the decades-long program.