New Depths in Australia-US Relations: The Collins Class ...

Maryanne Kelton: New Depths 10industry, in addition to contributing to the revival of the naval shipbuilding sector, 32 itwas a 'perfect' opportunity for the ALP to embark upon a major capital worksinitiative. Australian industry was to be a significant beneficiary of Project SEA 1114.As the Cockatoo Island Docks in Sydney, then used for maintenance of the Oberonsubmarine fleet, was inappropriate for construction of the new submarines, a'greenfield' site would need to be established. Importantly, however, this wouldensure that the ADF could provide through life support for the submarines' operation.A new site would also offer the opportunity to employ innovative modular constructionmethods and simplify industrial relations. 33 Site determination was the primeresponsibility of the shipbuilder, however, given its potential attractiveness forregional economic development and employment, the determination of the location ofthe prime construction facility would also have political implications. 34 Lobbying,thus, was intense.After a source selection process that involved the Departments of Defence,Finance, Industry, Technology and Commerce and the Attorney-General'sDepartment, (which involved some 300 people), on 18 May 1987, theKockums/Australian Submarine Corporation (ASC) bid was selected as thesuccessful tender. On an overall calculation which attempted to equate allperformance figures based on realistic assumptions of speed and endurance, andthe requirements of fuel, weaponry and the auxiliary systems, the Kockums designrated more highly. Kockums (with its close relationship to the Swedish Navy who,unlike others was prepared to provide independent, 'user' advice, 35 ) was contractedto construct six Type 471 submarines, designed by Kockums, with theCommonwealth retaining the option for two more. The essential features of thecontract, as identified by Commodore Geoff Rose, former Collins class projectdirector, were as follows:'-an Australian Prime contractor to be established-a fixed price (variable only for the material/labour/exchange rate)-government managed exchange rate risk-a performance based specification-mandatory Quality Systems for every participant-a total integrated logistics support package-a green field site for assembly/construction' 36-70 per cent of the platform work and 45 per cent of the combat system were to beundertaken in Australia. 37 (The project achieved 72 per cent and 50.3 per centrespectively. 38 )Noteworthy too, is that the US, observer of the project at this time, had noobjection to either Sweden, as a neutral country, or Germany, as NATO partner,submitting bids for the platform, and if successful, working together with the UScombat system houses on the project. 3932 Information from interviewee.33 Instead of 30 or more unions to represent workers, ASC eventually negotiated this to just three. Itwas thus known as the ‘Three Union Agreement’. Andrew Millar, personal communication, 17November 2003.34 A.W. Grazebrook, 'Collins class comes up down under', Jane's Navy International, vol.103, no. 1, p21, 1 January 1998. This article also provides an overview of the variety of subcontractors involved inthe Collins construction.35 Commodore Geoff Rose, 'Introduction of Underwater Platform Technology (An AustralianPerspective), 16 January 1997, p. 2.36 Commodore Geoff Rose, 'Introduction of Underwater Platform Technology (An AustralianPerspective), 16 January 1997, p. 2.37 Many of the defence contracts issued previously only required 12-15 per cent Australian content.38 Hans J. Ohff, personal communication, 22 May 2001.39 Information from interviewee.