The troubled history of Australia's A$5 billion fleet of Collins-class submarines has begun another chapter with the news that the government has abandoned an existing tender process for a new combat system for the fleet, and instead opted for a closer partnership with the United States. Two short-listed companies, Germany's STN Atlas and United States-based Raytheon, had proffered bids for the A$400 million (US$204 million) contract.
While Raytheon have ruled out legal action, STN Atlas, which is a joint venture between German engineering group Rheinmetall AG and BAe Systems Plc of Britain, is now set to seek compensation having invested around A$100 million in the project. STN Atlas had been the favourite to secure the control system contract and reportedly only proceeded with its tender when the Government confirmed that it was satisfied that safeguards would be put in place to prevent technological information being compromised.
The decision to abandon these tenders effectively means that Australia's submarine fleet will now be utterly dependent on the United States, and as such the decision has prompted criticism from opposition benches and defence analysts alike. Furthermore, it could well deter non-US companies from seeking Australian military contracts. The Government's decision could be further under fire should any legal action undertaken by STN Atlas be successful.