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Monday, June 22, 2020 

Western Australia shipbuilder Austal says that the United States Government, Department of Defense (DoD), in support of US Navy Shipbuilding Industrial Base, has announced a US$50 million Defense Production Act Title III Agreement (DPA Agreement) with its subsidiary Austal USA.

The DPA Agreement will maintain, protect, and expand US Domestic Production of steel shipbuilding capability and capacity through capital projects that will be executed over the next 24 months, beginning in June 2020. The DoD has entered into the agreement with Austal USA as part of the national response to Covid-19 to maintain, protect, and expand critical domestic shipbuilding and maintenance capacity. The scope of this agreement is still to be defined but subject to agreement with the DoD, Austal intends to use the funds to commence investment in the development of additional capacity for steel naval vessel construction at the Mobile shipyard.

It is likely that Austal will match the DPA Agreement funding which would take the total investment to cUS$100m. These investments will have long-term benefits for US Navy shipbuilding while accelerating pandemic recovery efforts in the Gulf Coast region.

Using funds authorised and appropriated under the CARES Act, this DPA Title III investment will protect jobs and bolster the local economy in a region hit hard by the Covid-19 pandemic and ensure critical capabilities are retained in support of US Navy operational readiness. Austal USA is based in Mobile, Alabama, which is the principal place of performance.

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