Austal Limited has announced it has signed a Strategic Shipbuilding Agreement (SSA) with the Commonwealth of Australia, formally appointing its new subsidiary, Austal Defence Shipbuilding Australia, as the nation’s strategic shipbuilder for Tier 2 surface combatants at Henderson, Western Australia.
The agreement was signed on behalf of the Commonwealth by Rear Admiral Michael Houghton, Head Patrol Boats and Specialist Ships, Naval Shipbuilding and Sustainment Group, and Austal Limited Chief Executive Officer Paddy Gregg.
In a media release, Austal said the SSA provides the framework under which Austal Defence Australia will design, construct, integrate and deliver key naval programs, beginning with the LAND8710 Landing Craft Medium (LCM) and Landing Craft Heavy (LCH) projects for the Australian Army.
According to Austal, subject to final negotiations, the programs are expected to deliver 18 landing craft medium vessels over eight years, with contract finalisation anticipated in the first quarter of FY2026, and eight landing craft heavy vessels, with finalisation expected by the end of 2025.
Gregg described the agreement as a defining milestone for the company, saying it reinforced Australia’s sovereign naval shipbuilding capability and the role of the Henderson shipyard in supporting continuous naval shipbuilding.
Under the agreement, Austal Defence Australia will act as prime contractor, responsible for design, construction, procurement, testing and acceptance of the programs.
Austal said the SSA has a maximum 15-year term and incorporates a Target Cost Incentive model with performance-based mechanisms, as well as provisions for developing a sovereign supply chain and establishing intellectual property rights overseen by a Commonwealth-held “Sovereign Share.”
The company said the agreement also aligns with broader Defence programs, including Collins Class sustainment and fleet support, and will be supported by a dedicated workforce at Henderson.
Other Austal group companies will continue commercial and defence shipbuilding operations across Australia, Asia and the United States.
The content of this article is based on information supplied by Austal Limited. For more information, please refer to the official company announcement and communications from Austal. Please consult a licensed and/or registered professional in this area before making any decisions based on the content of this article.
