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Australia Closer to Picking Spanish Air-Defense Ship (Updated)

CANBERRA --- As long predicted by Forecast International, the Spanish F100 air warfare destroyer will [most likely-Ed.] be selected as the winning design for Australia's AUD 7 billion Air Warfare Destroyer. The Defence Capability and Investment Committee - the Defence Department's top policy advisory committee - met last week and endorsed the F100 design offered by Spanish government shipbuilder Navantia. In doing so they emphatically rejected the case for a larger alternative based on the U.S. Arleigh Burke class destroyer.

(Editor's Note: The DCIC's recommendation to the National Security Committe is not binding, and the NSC can opt for another solution.)

The key considerations behind the decision were that the F100 build was more than AUD 1 billion less expensive than the U.S. option and more than two years ahead on the delivery schedule for three warships. The tender evaluation of the two bids submitted by Navantia and Gibbs and Cox had found conclusively in favor of the Spanish on all the key criteria.

Although supporters of the Gibbs and Cox-designed DDG-51 derivative promoted the greater weapons carrying capacity of their design, including 64 rather than 48 vertical launch tubes and two rather than one helicopters, the advantages of the F100 were so strong that a debate between supporters of the two designs was a complete wipeout according to one senior Australian defense source.

The financial benefits resulting from the selection of the F100 are so great that they will go a long way towards funding (some estimates are that they will almost completely accommodate) a fourth Air Warfare Destroyer. The Australian Cabinet's National Security Committee will consider an option to buy a fourth F100 destroyer when it makes a final decision on a go-ahead for the project in June.

Common wisdom has often suggested that the Navantia bid was simply a stalking horse for Gibbs and Cox, which the Government selected in 2005 as its preferred designer. According to this interpretation, Navantia has come from behind six months ago to win the backing of Defence chiefs. Forecast International has never agreed with this perception since the information we were receiving from Australia from the start of the project was consistently that the F100 was the preferred candidate and that the Gibbs and Cox design was a back-up in case the F100 class hit serious problems on its trials. This did not happen, the Alvaro de Bazan proved to be a great success and this eliminated the DDG-51 derivatives last hope of winning this contract.

(Editor's note: It should be noted that Navantia is currently locked in a dispute over the cost and quality of the F310-class air-defense frigates it is delivering to Norway, and which are broadly similar to those under consideration by Australia.)

It may well be that the appointment of Gibbs and Cox as preferred designer in 2005 was not a sign of preference for their design but the group's last chance to make its case.

A key handicap for Gibbs and Cox was that its proposed warship existed only in its preliminary design phase, increasing the technical risk for a local builder. Australia's experiences with new and untried designs has been disappointing with the Collins Class submarines a stark example of everything that can go wrong. The F100 is not the final winner in this competition yet, but the chances of the National Security Committee's decision being overturned are not high.

The air warfare destroyers are due to enter service from 2013, and will be the biggest and most advanced warships in the RAN.

The AUD 7 billion program will be Australia's second-biggest defense project in the coming decade, after the AUD14billion joint strike fighter for the air force.

Australia Closer to Picking F-100 for AWD