AWD Alliance Shipbuilding Contract With BAE Systems Australia Defence

29 Jun 2009

The Air Warfare Destroyer (AWD) Alliance has announced that ASC, on behalf of the Alliance, has signed a contract with Victorian based BAE Systems Australia Defence as one of two contractors to build 70 per cent of the blocks that will make up Australia’s three air warfare destroyers.

BAE Systems Australia Defence has joined the New South Wales based FORGACS Group in winning work worth a total of $450 million and which will create about 450 direct jobs and many more through sub contractors and suppliers.

BAE Systems Australia Defence is an experienced naval shipbuilder. The company has significant experience in the design and construction of naval ships through the Anzac Frigate Program and Project Protector for the Royal New Zealand Navy. BAE Systems Australia Defence also provides through life support for many of the Royal Australian Navy’s current warships.

The AWD Shipbuilding contract with BAE Systems Australia Defence is expected to provide work for up to 400 people at its Williamstown Shipyard.

Construction of the first blocks will begin later this year.

The contracts make a significant contribution to achieving the AWD Alliance’s commitment to maximise its use of Australian industry capability. They also represent a major milestone for the AWD Alliance and demonstrate the Alliance is on track to deliver the three AWDs on time and on schedule.

The Alliance had previously identified NQEA based in Queensland as one of the preferred suppliers of the blocks. At that time NQEA confirmed in writing its ability to meet its obligations under the tender.

However NQEA subsequently advised the Alliance that it was seeking to restructure its business and needed more time to meet its financial obligations.

As a result the AWD Alliance, in fairness to the other short listed bidder, BAE Systems Australia Defence, decided to enter into negotiations with both short listed bidders with the aim of entering into contract with the bidder who most satisfied the Alliance requirements.

As a result of those negotiations, and with BAE Systems Australia Defence having demonstrated it is able to meet the Alliance’s requirements, the Alliance has selected BAE Systems Australia Defence, along with the FORGACS Group, to build the 70 per cent of the blocks to be subcontracted.

The FORGACS Group, based in Newcastle, NSW, is one of Australia’s leading ship construction, ship repair and engineering companies. The group’s shipyard has a long history in the construction, conversion and repair of defence and commercial vessels including building hull blocks for the Anzac Frigate Program. The Alliance expects to sign a contract with the FORGACS Group within the next couple of months.

The Alliance’s procurement team included senior members from the three Alliance partners, the Commonwealth, ASC and Raytheon Australia. It also included ASC’s capability partner, international ship builder, Bath Iron Works.

The AWDs will be built using a modular construction method involving fabricated and pre outfitted hull blocks which are then joined together to form a completed ship. The contracts announced today will see 66 blocks (70 per cent) built at these two sites with the remaining 27 blocks (30 per cent) built at ASC’s facility in Osborne, South Australia.

When completed the blocks will be transported by ship or barge to the ASC facility where the block erection and integration will occur. On average the blocks measure 18m x 12m x 7m and weigh up to 200 tonnes. Fabrication of the first ship is expected to begin later this year with final deliveries of blocks for the third ship expected in late 2014.

The AWD Alliance is made up of the Defence Materiel Organisation, ASC as the Shipbuilder and Raytheon Australia as the Combat System Systems Engineer. The first ship is scheduled for delivery in 2014.


For further information contact:

James Cannon
AWD Alliance Communications Manager
P: (08) 8165 7368
M: 0417 880 481

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