Navantia will assist the $8 billion Air Warfare Destroyer (WAD) program, an initiative of the Department of Defence to provide the Royal Australian Navy with design and construction of all-purpose warships.

The deal will also see Navantia design and construct two other ships for the Landing Helicopter Dock (LHD) program, a contract worth another $2 billion. According to the Department of Defence, these contracts play a part in the most complex defence projects ever undertaken in Australia.

Holding Redlich partners Dan Pearce and Steve Aitchison worked closely with Navantia’s own in-house team to close the deal, an experience Pearce said was interesting given Navantia shipping expertise and skills that can be seen across the world.

Given Navantia’s expertise, Holding Redlich, “needed to focus on protecting their intellectual property while allowing for the smooth integration with other consortium members’ activities. With highly-regarded shipping designs to consider, the associated IP concerns needed to be negotiated,” Pearce said.

“There was a significant aspect of protecting those designs while still facilitating the construction of the vessel,” he said.

Meanwhile the structure of an alliance with Tenix for the LHD project also presented its own challenges. “There were a number of subjects in the alliance that needed to be worked through to reflect properly the needs of the Commonwealth as the end customer, Tenix as the local prime contractor, and Navantia as the provider of the design and part of the construction,” Aitchison said.

Pearce said that with a composite variety of contributions required during construction, certain factors needed to be considered in negotiating the successful contract.

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“The process of ascertaining the Commonwealth right for the various subcontractors is relatively complicated. For example, if there’s a problem with the ship, one needs to be able to determine the cause of that problem and how the subcontractors respond to the problem,” Pearce said.