The Government of Australia and Austal Defence Shipbuilding Australia (Austal Defence Australia), a newly created, wholly owned subsidiary of Austal, have officially entered into a strategic shipbuilding agreement (SSA).
The agreement formally appoints Austal Defence Australia as the Australian Government's strategic shipbuilder for "tier II" surface combatants at Henderson, Western Australia.
The SSA establishes the framework under which Austal Defence Australia will design, construct, integrate, and deliver key naval programs, beginning with the landing craft medium (LCM) and landing craft heavy (LCH) projects for the Australian Army.
Subject to final contractual negotiations, these programs are expected to deliver: 18 LCMs over eight years (contract finalisation expected Q1 FY2026); and eight LCHs (contract finalisation expected by end of calendar year 2025).
Under the SSA, Austal Defence Australia will act as prime contractor and take responsibility for all aspects of program delivery, including design, construction, procurement, testing, and acceptance.
Key features of the signed SSA include: a 15-year maximum term, supporting a continuous naval shipbuilding capability in Western Australia; use of a target cost incentive model with performance-based gainshare/painshare mechanisms; establishment of intellectual property rights, governance, and oversight via a "sovereign share" held by the government; ongoing alignment with broader Department of Defence programs including Collins-class sustainment and fleet support.
Austal Defence Australia will employ a dedicated workforce focused on delivering the government's tier II naval programs, while Austal’s other group companies continue commercial and defence shipbuilding operations across Australia, Asia, and the United States.