The Federal Government has considered, on a without prejudice basis, a major modification to the Bushranger contract which would result in a significant increase in the price of each vehicle.
Defence Minister Robert Hill said today no final decision had been made yet on the proposed contract change.
"The Government has decided to seek further information from ADI, the supplier of the vehicles, on matters relating to in-service maintenance and costs," Senator Hill said.
"Defence has been asked to pursue negotiations with ADI as a matter of urgency. The Government will consider the matter further as soon as a report on the maintenance issues is available.
"Defence contracted ADI in 1999 to equip the Army's 7th Brigade and the Royal Australian Air Force's Airfield Defence Guards by October this year with over 370 Bushmaster infantry mobility vehicles. The contract stalled when ADI advised it could not deliver the expected quantity and quality of vehicles within the agreed timeframe and budget.
"Despite the fact that ADI has failed to deliver, the Government is committed to trying to find a formula to rescue the contract," Senator Hill said.