Secret Future Frigates document reveals foreign bidders can use any workforce they want
BIDDERS for the $30 billion Future Frigates aren’t obliged to use SA workers, a secret document shows, prompting industry warnings that Adelaide shipbuilders must build the vessels or the entire industry could fail.
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BIDDERS for the $30 billion Future Frigates have no obligation to use South Australian workers, a secret document shows, prompting industry warnings that Adelaide shipbuilders must build the vessels or the entire industry could fail.
The request for tender document for the project, obtained by The Advertiser, shows that foreign bidders have been given the all-clear to use whatever workforce they see fit, even though the ASC workforce is already working on other warships.
The Federal Government says ASC workers will be “first in line” but a secret document has emerged that tells bidders for the $30 billion Future Frigates program that using ASC is optional. The project is expected to sustain more than 2000 direct jobs.
Rumours have circulated for months that Australian shipbuilders might be cut out of the project, or be partially absorbed by whoever wins the tender to design the warship.
Insiders see Defence as hostile to ASC and eager to see it disappear and have told The Advertiser they are concerned about how Australia would then maintain a sovereign shipbuilding capability or fulfil hopes of becoming a warship exporter.
It is understood a recent surprise announcement that ASC and WA-based shipbuilders Austal were teaming up together to offer to work on the frigates was in part a result of concerns about their future.
The Advertiser has obtained the request for tender document that seems sure to stoke their fears, after South Australian Senator Nick Xenophon failed to obtain it through Freedom of Information requests and resorted to calling for whistleblowers to find it.
The British, Spanish and Italians are vying for the lucrative deal, through BAE, Navantia and Fincantieri respectively.
The request for tender document makes it clear that the winner will be responsible for the workforce, raising concerns workers could be drawn from interstate or overseas.
“The successful tenderer will not be directed to utilise any particular shipbuilding workforce or engage any particular provider of shipbuilding services,” it states.
“In particular, the Commonwealth is not mandating that the successful tenderer use the workforce of ASC Shipbuilding Pty Ltd currently working on the AWD program.”
The document goes on to say that the successful tenderer will directly manage the workforce and that it should not be entirely subcontracted to a third party.
Defence Industry Minister Christopher Pyne did not guarantee that ASC workers would automatically transfer to the frigates program but said using people with the kind of experience they have is vital to the Government’s shipbuilding plan.
“Common sense suggests that everybody who has worked on previous shipbuilding projects, who is looking for work on the Future Frigates, will be first in line as the Government looks to not just maintain the skilled workforce but expand it,” he said.
“The Government is committed to creating an indigenous naval shipbuilding industry in Australia which will involve a significant increase of employees in the shipbuilding industry, focused on South Australia.”
Senator Xenophon called the document a “notice of execution” for ASC and demanded the tender process be cancelled and started again.
“This is a stunning and sickening confirmation that the government has a plan, a secret plan, to kill off ASC and thousands of SA jobs,” he said.
“You need to ask if there’s an agenda to shift jobs interstate or offshore.
“This is confirmation that there’s a vendetta against the ASC ... there’ll be no future for the company unless the Government reverses their decision.”
It set a “chilling precedent” for the $50 billion Future Submarines program, he said.
ASC has been laying off workers as the Air Warfare Destroyer project winds up, but plans to keep a core group to work on Offshore Patrol Vessels for a couple of years. That is seen as a bridging project to keep staff in the Adelaide shipyard for when the Future Frigate build begins in 2020.
State Defence Industries Minister Martin Hamilton-Smith said the Commonwealth may have “raised the white flag” on industry content.
“You can only assume that that will mean (the tenderers will) rely on their own national supply chain and expertise to build the frigate,” he said, warning of “long-term consequences” to the industry.
The document outlines the requirements for the project, which are to deliver nine anti-submarine warfare frigates and contribute to a continuous naval shipbuilding industry in Australia.
It also makes it clear that the warships are to be built in Adelaide and that the winning tenderer must maximise Australian industry capability.
It emphasises the need for a long-term industry in Australia and says if an export market is not developed, the Commonwealth will need to develop “further programs” when the work starts to dry up in 2035.
“The Commonwealth’s intention is to maximise Australian Industry Capability over the expected duration of the (contract) in an innovative and economically optimised manner, without unduly compromising affordability,” the document states.
It confirms the Commonwealth will continue to own Australia’s shipyards but the tenderer will run them.
The winner of the tender process is due to be announced in the first half of next year.
Australian Strategic Policy Institute defence expert Andrew Davies said there was a “ready and made workforce” at ASC, but that “ASC management might be looking for a new job”.