Prime Minister Tony Abbott has refused to commit to allowing Australian companies to publicly compete to build the next generation of submarines, saying the last thing the navy wants "is a substandard submarine".
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Amid signs the government is preparing to purchase vessels made overseas, Mr Abbott has said that the first priority of Defence has to be that equipment is "world class" and "at a competitive price".
A trio of South Australian Liberal Senators Anne Ruston, Sean Edwards and David Fawcett are calling on the government to listen to the advice of a top advisor to the government on the issue, and make a decision after a public tender.
Doctor John White has told a Senate inquiry that such a tender was an important part step in comparing local and overseas costs.
But Prime Minister Tony Abbott said on Thursday he wanted the best quality of submarine at the best value - regardless of where it was made.
"We need to get the best possible submarines for our navy and decisions about future submarines have to be made on the basis of what is best for our armed forces, not what is best for a particular region or what might be best for a particular company here in Australia," he told reporters in Melbourne.
"The last thing we want is a substandard submarine. We would not want that.
"Like all of my colleagues, I would like to see our armed forces using Australian equipment, wherever possible, but it has to be absolutely world class and it has to be at a competitive price," he said.
Acting Chief of Defence Force Vice Admiral Ray Griggs said the navy is still considering its options and could not say when a decision might be made.
"We have said that we're looking at a range of options and that remains the situation for us. We have not come down to a specific option yet and we continue to look across at what's available," he told ABC radio.
Labor says if the government does buy the next generation of submarines from overseas, it will be a broken election promise.
Defence Minister David Johnston said in May 2013: "We will deliver those submarines from right here at ASC in South Australia. The Coalition today is committed to building 12 new submarines here in Adelaide."
Labor's Veterans Affairs spokesman David Feeney called on the government to listen to the advice of experts and criticised the Coalition for achieving "nothing" on submarines in its first year in office.
"An open competitive tendering process would enable Australia to secure a submarine that meets our requirements for the best price," he said.
