Locals claim NBN contracts skip Australia

NBN Co has been accused of ignoring Australian manufacturers by selecting overseas bidders for its grounds-systems satellite-service tender.

NBN Co has been accused of ignoring Australian manufacturers by selecting overseas bidders for its grounds-systems satellite-service tender.

Earlier this week, the company announced that Space Systems/Loral had secured a $620 million contract to develop two Ka-Band satellites for NBN Co for its satellite service, which is due to be launched in 2015. At the time, NBN Co CEO Mike Quigley said that two further tenders around ground systems and launching the satellites will be announced soon, for a total of $1.4 billion.

It is believed that the two final bidders for the ground-systems component of the service are US satellite vendors Hughes and Viasat, with NBN Co now in final negotiations with the two companies.

But local systems vendor EM Solutions — which manufactures Ka-Band satellite-radio transmitters and receivers — believes that NBN Co overlooked local manufacturers by bundling up the ground-systems tender to provide a whole service that no local vendor could provide alone.

EM Solutions managing director Dr Rowan Gilmore said that his company had expressed interest in providing the RF systems, but was not eligible to bid for the whole tender.

"They've made them such a big tender that only a multinational or a foreign company can bid, essentially," he said.

"What NBN wants is, essentially, they want to outsource the whole thing. They don't want to buy bits and pieces of equipment; they want to buy the whole thing from one supplier."

NBN Co also ran into controversy when it announced its satellite-development contract. Local satellite vendor NewSat claimed that it was overlooked for the tender. However, Communications Minister Stephen Conroy said that there were only five companies that could undertake what NBN Co requires, and all are based in Europe or the United States.

Gilmore admits that the ground-systems tender as a whole could not be met by a local company; parts of it could have been, as it isn't just the ground terminal, but also the network-management system software, logistics and antennas.

"What [NBN Co CEO Mike Quigley] neglects to say is that there is a number of companies in Australia that could be part of their supply chain," he said.

"Our concern is these companies will come in, import all their stuff and not worry about Australian manufacturers in sourcing their equipment."

In a time when the government is focused on promoting Australia's manufacturing industry, Gilmore said that it was a bit hypocritical for NBN Co to go overseas for the tender.

NBN Co declined to confirm what vendors were the final bidders, but said that whatever company wins the tender will be encouraged to maximise local content.

"All participants are required to submit an Australian Industry Participation Plan. So Australian companies and Australian workers will be beneficiaries of the awarding of the Ground Segment contract," NBN Co said in a statement.

Indeed, EM found out that it had been left out of the tender because it was approached by one of the shortlisted companies, which wanted to engage it as a subcontractor.