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Friday, 13 September 1985
Page: 524

Senator MASON —My question is addressed to the Minister representing the Minister for Defence. Has the Government noted the well-authenticated criticism of the General Dynamics Corporation in the United States of America for the very high overpricing of its products that are supplied to the United States Government? Has the Australian Government taken any steps to ensure that spare parts supplied to Australia for our F111 aircraft and any other General Dynamics contracts that might exist are not being grossly overpriced in the same way? Has the Government investigated this matter? If not, will it do so now and inform the Senate of the results?

Senator GARETH EVANS —The Government has noted the criticism of General Dynamics along the lines mentioned by Senator Mason. The Minister for Defence has informed me that two avenues are open to Australia in purchasing from General Dynamics; doing it by way of direct purchase or, alternatively, by way of purchase through the United States Government foreign military sales arrangements. In direct purchasing, Australian interests are protected through a process of competition with the lowest priced technically acceptable offer being selected. If no competition is possible we run a number of checks which might include some or all of the following: Previous price paid, price paid by other customers and audit of costs. Concerning purchasing through the United States Government, its procurement agencies perform the same function that we perform for a direct purchase. If overcharging were to arise under the United States Government arrangements, and it was proved, the price quoted to Australia would be amended. If any such cases arise, I can arrange on behalf of the Minister for Defence for the Senate to be so informed.

Senator MASON —I ask a supplementary question. I take it that, in the contingency the Minister has mentioned, the Government will actively follow up that matter and see that, where there may have been overcharging in purchases made through the United States Government, that has not resulted in overcharging in Australia?

Senator GARETH EVANS —That is a reasonable assumption but I will make sure that the Minister for Defence is informed of the honourable senator's concern.