Naval Ship Management Australia has been chosen by the Australian Government as preferred tenderer for a five-year, $300 million maintenance and repair contract for the Anzac Class Frigates.


Minister for Defence Materiel Senator Kim Carr said the contract was expected to provide better outcomes for industry and more effective, value-for-money outcomes for the Navy.


"In June of last year my predecessor Minister Jason Clare announced the Government's intention to reform the naval ship repair sector - commencing with the release of the tender for the repair and maintenance of the Navy's eight Anzac Class frigates," Senator Carr said.


"I am pleased to announce the outcome of the Tender evaluation. I congratulate Naval Ship Management Australia, a joint venture of Babcock Australia and United Group Infrastructure, for being selected as the preferred tenderer."


Senator Carr said the announcement follows extensive consultation with industry on a new approach to contracts for repair and maintenance work.


"In contrast to the previous arrangements which required every new maintenance activity to be individually contracted out, the grouping of ship repair and maintenance tasks offers the potential for significant cost savings.  These savings are achieved through reductions in contracting activity, greater ability to forecast work effort, and productivity gains through greater investment in workforce skills and infrastructure.  This initiative will provide industry with the predictability, certainty and stability that it needs to achieve efficiencies and provide job security for, and investment in, its workforce."


Contract negotiations are expected to be finalised by June 2012.