HMA Ships Toowoomba, AOR Stalwart and DDG Brisbane conduct replenishment operations during a 2023 regional presence deployment. Photo: ADF.
Defence has signed a seven-year extension to a maintenance and sustainment contract for the Royal Australian Navy with Navantia Australia.
The $400 million contract will secure 200 jobs, primarily in Sydney, Melbourne and Perth.
As the Navy’s first multi-class Design Support Contractor, Navantia Australia is tasked with providing through-life engineering and design knowledge on the Navy’s two Canberra-class landing helicopter docks (LHDs), 12 LLC landing craft, two Supply-class auxiliary oiler replenishment (AOR) ships, and three Hobart-class guided missile destroyers (DDG).
All four vessel classes are Navantia designs and all but the DDGs were built by Navantia at Ferrol in Spain.
Defence says the agreement is the first of several Design Support Contracts that it will establish for other capabilities and says these contracts provide greater efficiency and effectiveness in the engineering and design support provided across the fleet.
Minister for Defence Industry and Capability Delivery Pat Conroy said the defence industry now employs more than 100,000 people in Australia.
“This contract is yet another example of our commitment to supporting them and the businesses that employ them,” he said.
“Through this contract, we have secured 200 jobs and are supporting our sovereign defence industry, which is delivering critical engineering work for our Navy and helping to keep Australia safe.
“The government is committed to ensuring more work on our naval vessels is done locally, supporting more work for Australian small and medium businesses and jobs for Australians.”
Navantia Australia’s Chief Operations Officer Jamie Gibbs said the Commonwealth’s decision to select Navantia Australia was exciting news for the company.
“The DSC is the largest single contract Navantia Australia has signed in our 13 years of operation,” he said.
“It provides our workforce and the industry at large with long-term stability and enables us to continue growing our local footprint, keeping more engineering jobs in-country.”
Navantia Australia’s managing director Israel Lozano said the engagement builds upon the Strategic Agreement Principles document signed between the Royal Australian Navy, Capability Acquisition and Sustainment Group (CASG), Navantia and Navantia Australia, which designated Navantia Australia as the Platform Design Agent for all Navantia-designed vessels.
“The DSC provides end-to-end change management and engineering services to the assets incorporated in the contract, providing Navantia Australia the platform to partner with the CoA [Commonwealth of Australia] and explore greater, innovative solutions for sustainment and asset management,” he said.
“The DSC scope amalgamates Navantia Australia’s extant Support Services contracts for the Royal Australian Navy’s DDGs, LHDs, LLCs, and AORs, as well as the Platform System Designer Deed into the one contractual arrangement.”
The contract was awarded despite ongoing issues with the two AORs, neither of which were available recently as Australian and New Zealand naval vessels shadowed a Chinese task force’s circumnavigation of Australia.
HMAS Supply has been in Sydney for nearly two years with a reported propellor shaft problem, while sister ship HMAS Stalwart fell foul of a similar issue in Darwin in May 2024, and has also been unavailable since then.
When asked by the Senate Foreign Affairs, Defence and Trade Committee on 6 June 2024 about HMAS Supply‘s status, former Chief of Navy VADM Mark Hammond said, “I do not want the committee to get the wrong idea; I am not satisfied with the availability of this ship”.
“This is a complex defect,” he added. “Navantia has written to the department accepting liability; it will be repaired under warranty.”
The two AORs are based on Spain’s ESPS Cantabria, which was deployed to Australia in 2013 to fill in for a now-retired vessel that was undergoing an upgrade.
In response to questions from Region, a Defence spokesman said “HMAS Supply has been in extended maintenance at Fleet Base East in NSW to address latent defects originating from the ship build in Spain.
“On completion of HMAS Supply’s extended maintenance period and defect rectification, the ship will commence acceptance trials to confirm it is performing as expected before it becomes operationally available.”
The spokesperson added that “HMAS Stalwart has recently completed its scheduled maintenance period and defect rectification at Fleet Base West in Western Australia” and “has commenced preparations for acceptance trials to confirm operational availability”.
