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Defence has signed a contract with Penske Australia, which will ensure local industry support for diesel engine sustainment activities to enable the Australian Defence Force (ADF) to reliably deploy where and when needed.
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The $190 million, five-year contract moves Penske Australia from a fixed price arrangement to a target cost incentive model, allowing Defence to monitor actual costs and verify value, while improving efficiencies across different platforms.
Acting deputy secretary Naval Shipbuilding and Sustainment Rear Admiral Wendy Malcolm said the contract would build on the previous contract’s benefits but include greater cost transparency, more effective risk management, and the opportunity to increase sovereign capability.
“This is a great example of Defence’s commitment to achieving improved value for money, in conjunction with a robust performance management framework that continues to support the deployment of the ADF,” RADM Malcolm explained.
RADM Malcolm added “Penske Australia supports MTU-Friedrichshafen branded diesel engines on Navy’s Anzac, Hobart and Armidale Class vessels, as well as other crucial systems on Navy and Army platforms.”
This multi-year contract will support more than 90 jobs across seven sites across the country, expanding the training and skills development opportunities available to Australia’s defence industry workforce, supporting critical sustainment and capability generation opportunities.
“Support for new platforms, such as the Arafura Class offshore patrol vessels, can be included in the future, providing incentives for industry partners to invest in the critical area of sustainment. This contract showcases the benefits of a collaborative partnership between Defence and its long-term Australian industry partner, Penske, who are both committed to creating value-driven solutions for materiel sustainment," RADM Malcolm added.
