Adelaide’s Ezy-Fit Hydraulics spent $4 million getting ready to work on the submarines – but tender went to UK company
AN Adelaide company spent about $4 million getting ready to work on the submarines, only for the tender to go overseas.
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AN Adelaide company spent about $4 million getting ready to work on the submarines, only for the tender to go overseas.
Ezy-Fit Hydraulics won a $1.9 million Federal Government grant to upgrade so they could tender to replace the Collins Class periscope tubes – potentially a $12 million contract.
They had to match that grant dollar for dollar. Then they bought new machinery and facilities.
But they missed out to Thales, in the United Kingdom, the original manufacturer of the parts.
Defence Industries Minister Christopher Pyne asked the contractor, BAE, to review the process but the outcome remained the same.
A spokesman for Mr Pyne pointed out that 82 per cent of the work on the ageing Collins fleet is now done by Australian industry.
Senator Xenophon has written to Mr Pyne about that specific issue and the broader issue of local content. He told The Advertiser Ezy-Fit had spent $1.9 million of their own money and $1.9 million taxpayer dollars to build the facility, which the original grant application said would be used for the Collins class submarines.
“This should not have happened – what a waste,” he said. “They’ve had the rug pulled from under them.
“You don’t need a hi-tech periscope to work out that what’s happened to this company is unfair and a slap in the face to Australian manufacturing.”
The Collins job was considered a possible pathway to do more work on the $50 billion Future Submarines. Senator Xenophon said the Government had to make sure the Future Submarine contract mandates minimum amounts of local industry involvement.
The Government and DCNS have agreed to maximise Australian industry involvement to ensure sovereignty for Australia, but he wants a specific amount outlined.
“It leaves the Commonwealth commercially and legally impotent (without that),” he said.
Mr Pyne’s spokesman said BAE had run a competitive process between Thales, Ezy-Fit and Hoffman Engineering in Western Australia.
“Neither Hoffman nor Ezy-Fit have previously manufactured a periscope,” he said.
“Upon hearing the outcome of the process, the minister asked BAE to provide an overview of the process.
“While BAE reviewed the process and the outcome didn’t change, both Hoffman & Ezy-Fit will be offered opportunities in BAE’s global supply chain, including in the periscope project.”
BAE Systems Australia said they actively look for opportunities for Australian companies and had a good track record on that score.
“Last year we worked with more than 1600 Australian suppliers purchasing approximately $360 million of goods and services and supporting around 1500 Australian jobs through our supply chain expenditure,” a spokesman said.
“BAE Systems Australia conducted a thorough procurement process to select a supplier to assist us for the manufacture of periscope tubes that we are contracted to deliver for the Commonwealth Government.”