Penske Australia will provide local industry support for diesel engine sustainment for the Australian Defence Force after signing a $190 million five-year contract with Defence.
The contract ensures Penske’s continued support of MTU-Friedrichshafen diesel engines on the Royal Australian Navy’s ANZAC class frigates, Hobart class destroyers, Armidale class patrol boats, and other systems on Navy and Australian Army 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, ” Rear Admiral Malcolm said.
“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.”
Defence said the new 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’.
“The contract will support more than 90 jobs across seven Australian sites, further improving training and skills in the sustainment industry that are essential to providing the ADF with the equipment they need to complete their mission and return home safe,” Rear Admiral Malcolm said.
Defence added that support for new platforms can be included under the contract in the future.
“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,” Rear Admiral Malcolm said.
“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.”