Negotiations between the Commonwealth and Naval Group on an overarching strategic partnering agreement (SPA) for the Future Submarine program are progressing, but more slowly than originally anticipated.
The SPA will set out terms and conditions that will endure for the entire Sea 1000 program, avoiding the need to negotiate subsequent phases from scratch.
Although preceded by months of preparatory work the negotiations officially got under way last November, with the teams headed by Rear Admiral Greg Sammut, head of the Future Submarine program in the CASG, and Naval Group executive director Jean Michel Billig. Two sessions have been held in France, two in Australia, and a fifth session is currently underway in France.
According to informed sources, the negotiations were originally intended to be completed by the end of 2017.
This was to be followed by formal signature on 31st March of both the SPA and a separate design contract, with the latter – basically involving about four years of work – benefitting from the SPA’s common terms and conditions.
However, Vice Chief of the Defence Force Vice Admiral Ray Griggs told Senate Estimates on 28 February that he saw no reason why SPA negotiations should not be completed “before the middle of the year”.
Secretary of Defence Greg Moriarty added that “another month or two” beyond that on a contract of such consequence was likely to get a reasonable hearing from Government.
VADM Griggs pointed out that work was meanwhile proceeding under the design and mobilisation contract, which was signed in September 2016 and runs until September this year.
A further contract subsequent to the pending design agreement would involve detailed design and production of the first boat.
“And then we have the option of placing further contracts for additional submarines that we can price accordingly and manage risk with the right pricing mechanisms and the right contract structure to best deliver those programs in a value-for-money way,” VADM Griggs added.