The US Department of Defense has awarded a major submarine contract worth $US197 million ($276 million) as part of the growing AUKUS security partnership.
The deal is fully funded by Australia and marks a key step in its plan to acquire nuclear-powered submarines.
The contract focuses on engineering and design work. It will help prepare Australia to operate advanced submarines built using American technology. This is one of the first major contracts linked directly to AUKUS, showing that the long-term plan is moving forward.
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The work has been awarded to General Dynamics Electric Boat, a leading US defense company that builds submarines for the US Navy. The company operates shipyards in Connecticut and plays a central role in America’s submarine production.
The Pentagon said the contract could grow much larger. With additional options, its total value may reach up to $US930 million ($1.3 billion). This reflects the scale and long-term nature of the AUKUS program.
Australia is paying for the contract through a $US3 billion contribution it has already committed to the US under the AUKUS agreement. This funding supports American shipbuilding capacity while also securing Australia’s future submarine fleet.
However, the announcement comes at a time of concern. Reports suggest that a separate construction contract for submarines has been delayed. This delay raises questions about whether the ambitious timeline of the AUKUS plan can be met.
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Under the agreement, Australia plans to buy several second-hand Virginia-class submarines from the US in the 2030s. But there is a strict condition. The US will only sell these submarines if it can produce enough new ones to maintain its own fleet strength.
Right now, that goal looks challenging. The US Navy aims to build 2.33 submarines each year. But recent data presented to Congress shows production has slowed to about 1.1 submarines per year. Delays in construction have also increased slightly, despite heavy investment.
To deal with these issues, General Dynamics Electric Boat is expanding its workforce. The company plans to hire around 4,600 new workers at its Groton shipyard this year. This effort is meant to clear backlogs and speed up submarine production.
Meanwhile, military cooperation between the US and Australia is already growing. Samuel Paparo said Australia is ready to host American submarines now. He pointed to upgrades at HMAS Stirling near Perth.
The US plans to begin rotating its submarines through the base starting next year. This will strengthen military presence in the Indo-Pacific region and improve joint operations between allies.
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Looking further ahead, Australia also plans to build its own submarines. Under AUKUS, at least five submarines will be constructed in South Australia. These will use American technology and include parts made in the UK. The first of these locally built submarines is expected in the early 2040s.
Supporters of the deal say progress is real. Congressman Joe Courtney said the funding shows the plan is moving beyond ideas.
“These funds are proof that AUKUS is not just a plan on whiteboards,” he said.
What is AUKUS and Why It Matters
AUKUS is a strategic partnership between Australia, the US, and the UK. It was created to strengthen defense cooperation, especially in the Indo-Pacific region.
Its main feature is the sharing of advanced military technology. This includes nuclear-powered submarines, cyber capabilities, artificial intelligence, and underwater systems.
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For Australia, AUKUS is a major shift. It will give the country access to nuclear-powered submarines for the first time. These submarines can travel farther, stay underwater longer, and operate more quietly than traditional diesel-powered submarines.
For the US and UK, AUKUS helps deepen alliances and maintain a strong presence in a region where strategic competition is increasing.
The partnership is seen as a long-term investment in security, technology, and defense cooperation. But its success depends heavily on industrial capacity, timelines, and sustained political support.
