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Mulwala defence contract delayed

Steps are being taken to ensure the continued operation of the Mulwala munitions facility beyond June 2015, as tender negotiations for the DMMA remain indefinitely suspended.

RACHEAL WILLETT May 20, 2014 3:35pm

The Department of Defence has confirmed three shortlisted consortia – led by Thales Australia, Alliant Techsystems and BAE Systems Australia – were informed earlier this year that the Request for Tender for the Domestic Munitions Manufacturing Arrangements Project (DMMA) had been suspended.

The DMMA will establish successor arrangements to the existing contact which expires in June 2015 – the original timetable called for a decision on a successful tender to be made late this year.

A Defence spokesperson told the Yarrawonga Chronicle the suspension was “pending consideration of the DMMA project by Government.

“As part of due diligence required to close out the current arrangements, Thales Australia Limited and the Department of Defence are working collaboratively to address a number of aspects not clearly defined in the arrangements,” the spokesperson said.

The Defence spokesperson denied there was any kind of dispute between the Department of Defence and Thales Australia.

Australian Munitions, which is part of Thales Australia Limited, issued a statement to the Yarrawonga Chronicle concerning the DMMA delay.

“We understand the need for the DMO (Defence Materiel Organisation) to suspend the DMMA program based on normal due diligence, as the situation since launching DMMA in November 2010 has changed,” the spokesperson said.

“A key reason for the suspension is the delay to the final delivery of the nearly $400 million modernisation of Mulwala under the Mulwala Redevelopment Project (MRP).

“We are ready to assist the DMO and its contractors – Lend Lease and ATK – to deliver their contracted outputs, which are already more than three years behind the original schedule.”

The spokesperson said following the DMMA suspension the company was “working closely with DMO on contingency planning for the continued safe operation of the Mulwala and Benalla facilities once the current contracts expire in June 2015.

“We want to reduce the uncertainty for our employees, customers and suppliers, so we are doing everything we can to quickly reach an agreement with the DMO on how the two sites will continue to be safely run from July next year.

“We are focused on the future and continuing to invest in the business both through research and development, and by the introduction of new product lines, to drive higher export and domestic sales.”

The Defence spokesperson said, “The Department of Defence is developing contingency plans to enable ongoing operation of the facilities beyond 2015”.

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