The Department of Defense this month submitted proposals to allow it to transfer nuclear-powered attack submarines to Australia as part of the AUKUS agreement, accept Australian funding to improve the industrial base, and allow Australian personnel to work on submarine production and maintenance.
It submitted three legislative proposals to Congress on May 2, with public release occurring on May 16. These are requests to be included in Congress’ fiscal year 2024 defense funding bill.
In March, the U.S., U.K, and Australian government
announced the “optimal pathway” to help Australia produce its own nuclear-powered attack submarines under the AUKUS agreement to succeed its aging Collins-class diesel-electric submarines (Defense Daily, March 13).
The second main step in the effort, following years of U.S. and U.K. submarines visiting Australian ports while Australian sailors embed in the U.S. and U.K. nuclear submarine forces and schools, will have Australia buy three to five Virginia-class submarines in the 2030s. The sale is expected to only occur once Australia has enough trained personnel to operate and maintain the vessels.
Later, by the late 2030s and early 2040s Australia and the U.K. plan to start building and fielding a new joint submarine designed that incorporates some Virginia-class technologies, called SSN-AUKUS.
The U.S. Navy’s 30-year shipbuilding plan confirmed the service plans to buy additional attack submarines in the 2030s to replace whichever boats are sold to Australia under the plan (Defense Daily, April 19).
One of these legislative proposals would allow the president to transfer up to two submarines from the Navy’s inventory as a sale. It would also allow the Secretary of the Navy to direct the proceeds towards acquiring new U.S. submarines to replace those sold to Australia or carry out an activity the Navy Secretary “determines would improve the submarine industrial base.”
Similarly, the proceeds of the sale of the nuclear reactor parts would also be usable by the Secretary of Energy to acquire replacement submarine naval nuclear propulsion plants and fuel.
DoD said this aims to give the Navy flexibility without a specific deadline for the transfer or naming specific vessels to sell.
The department analysis of the legislation argued “this small amount of flexibility is necessary because the transfers may not occur for a significant period of time and will be conditioned on Australian readiness to safely and effectively operate such vessels.”
“This flexibility is also necessary so that Royal Australian Navy personnel have time to complete schoolhouse and on-the-job training, Australian private-shipyard personnel have time to acquire training on submarine production and repair from the United States Navy and United States contractors, and the Government of Australia and the Australian defense industrial base have time to develop and build adequate infrastructure,” it continued.
The proposal would also give the Defense Secretary authority to specify which shipyard or repair facility is most able to conduct necessary repair and refurbishment of the submarines before transfer.
Notably, this allows the repair or refurbishment of U.S. Virginia-class submarines bound for Australia to potentially occur in Australia or the U.K., if industrial capacity exists in either at the time.
DoD argued that “the flexibility to allow United Kingdom and Australian personnel to service United States submarines is essential to develop the capacity of Australia to manage a nuclear-powered submarine fleet.”
A second proposal would allow the DoD to accept payments from the Australian governments to help improve the U.S. submarine industrial base (SIB) as part of the AUKUS agreement.
Australian Defense Minister Pat Conroy previously said Australia intends to directly invest $3 billion into the U.S. submarine industrial base, in addition to the purchase price of the submarines.
DoD’s analysis of this proposal argued “DoD requires the broad authority proposed by this section to ensure that the full scope of SIB expansion to be supported by Australia can be executed in a timely fashion via the appropriate mechanism.”
DoD said while some existing programs and authorities can likely accommodate some aspects of industrial base expansion, “the unique character of a foreign government transferring funds to the United States for purposes of expanding U.S. industrial capacity benefits from an authority for DoD that will allow the Secretary of Defense to direct Australian support to the appropriate elements of SIB expansion.”
The Pentagon argued the submarine industrial base needs to be expanded on both the sustainment and construction segments because they have suffered from extended reductions over two decades following the end of the Cold War, a generational workforce turnover and COVID-19 impacts.
It said this also coincides with a “significant increase in demand” in maintenance and new construction due to overhauls and a “dramatic increase of approximately five times in tonnage of new construction submarines since 2012” for Virginia-class submarines.
Likewise, DoD said funding programmed for fiscal year 2020 – 2023 construction and the 20-year-long Shipyard Infrastructure Optimization Program (SIOP) investments are “not sufficient to accommodate the increased workload” of increasing U.S. submarine demand, let alone AUKUS exacerbating industrial base limitations.
The Defense Department said it would use these Australian funds to add a “significant number” of trade workers to shift into round-the-clock operations to help reduce the current overhaul backlog, add capital assets not in the SIOP for the intermediate maintenance activities that would also reduce backlog and increase resilience to repair damage like another submarine tender and floating dry dock, and advanced purchasing of known replacement items for submarine overhauls.
It said funding directed on the new construction side could be used to increase Virginia-class submarine production rate to produce additional boats to replace the submarines the U.S. sells to Australia, build more new submarines for Australia, and support technology transfers into the design of the new SSN-AUKUS submarine.
“The funds would support a whole-of-industry approach to facilities, technology, personnel, and oversight. These efforts would include design tool modernization and deployment, addressing supplier base modernization, additional facilities, and advanced manufacturing improvements, and levelling shipyard workload via strategic sourcing of key submarine fabrication work to newly qualified contractors.”
A third legislative proposal would allow private sector Australian personnel to be trained by the U.S. Navy and U.S. contractors to support growing Australia’s submarine industrial base.
The DoD analysis of the proposal argued “in order for submarine security cooperation between Australia, the United Kingdom, and the United States…to succeed on schedule, Australia must rapidly develop the capacity of its submarine industrial base to produce, maintain, and repair conventionally armed, nuclear-powered submarines.”
Industrial base developments should begin as soon as possible “for Australia to become ready to own and safely operate these submarines in a manner that both maintains the highest non-proliferation standards and strengthens the global non-proliferation regime,” it continued.
If enacted, the Pentagon said the proposal would allow export licenses for private experts. However, it underscored this does not preclude the U.S. government from providing oversight and consolidation of stakeholders under an overarching foreign military sales case to ensure the Australian industry training program is comprehensive and effective.
“A foreign military sales letter of offer and acceptance would permit the U.S. Navy to award contracts to U.S. contractors with highly specialized industrial skills so that these U.S. contractors can train Australian government contractors as well as Australian private sector personnel and allow U.S. Navy public submarine facilities to train all of such Australians, all of which would be carried out under strict security protocols,” the DoD said.