Austal Limited has officially signed a Strategic Shipbuilding Agreement (SSA) with the Commonwealth of Australia, marking a major step forward in Australia’s domestic naval construction strategy. The agreement was formalized between the Commonwealth, represented by RADM Michael Houghton, Head of Patrol Boats and Specialist Ships within the Naval Shipbuilding and Sustainment Group, and Austal Limited CEO Paddy Gregg.
Austal initially announced on August 5 that the Australian Commonwealth Government had finalized the Strategic Shipbuilding Agreement (SSA), stating that a formal agreement would be signed shortly thereafter. This agreement represents a milestone for both Australia and Austal, and was signed by RADM Michael Houghton, Head of the Patrol Vessels and Specialized Ships Division at the Commonwealth Government’s Naval Shipbuilding and Logistics Support Agency, and Austal CEO Paddy Gregg.
Through this newly established partnership, Austal Defence Shipbuilding Australia—a fully owned subsidiary of Austal Limited—has been appointed as the Commonwealth’s strategic partner for Tier 2 surface combatants. The vessels will be constructed at Austal’s shipbuilding facility located in Henderson, Western Australia.
The SSA outlines Austal Defence Australia’s role as prime contractor for the design, construction, integration, and delivery of key defense projects. The first initiatives under the agreement will include the LAND8710 program, encompassing:
18 Landing Craft Medium (LCM) vessels over an eight-year period, with final contract negotiations anticipated by the first quarter of the 2026 financial year;
8 Landing Craft Heavy (LCH) vessels, with contracts expected to be finalized by the end of 2025.
A central objective of the agreement is to strengthen Australia’s sovereign shipbuilding capacity while fostering a resilient local supply chain. The 15-year framework incorporates incentive-based cost targets and performance mechanisms, along with provisions for Commonwealth oversight through a ‘Sovereign Share’ structure.
Paddy Gregg, Austal Limited’s Chief Executive Officer, emphasized the significance of the agreement, noting that it “cements Austal Defence Australia’s position as a preferred partner for Tier 2 naval vessels and reinforces Henderson’s strategic importance in Australia’s continuous naval shipbuilding enterprise.”
The SSA also aligns with wider Australian Defence Fleet initiatives—including Collins Class submarine sustainment—ensuring coordination across maritime defense projects.
Austal confirmed that its other subsidiaries will continue their operations in commercial and defense shipbuilding across Australia, the United States, and Asia, while Austal Defence Australia focuses exclusively on delivering the Commonwealth’s Tier 2 naval programs.