SYDNEY • Australia may have awarded France a bumper contract to build its next generation of submarines, but its highly secretive combat system will come from close ally the United States.

French shipbuilder DCNS last week beat off Germany and Japan to secure the A$50 billion (S$51 billion) deal to design and build the 12 subs, a scaled-down, conventionally powered version of its 4,700 tonne Barracuda, to be named Shortfin Barracuda.

But it will have little to do with armaments and the combat system, which US defence giant Lockheed Martin - in the running for the job - said was "essentially the eyes, ears and sword of the boat".

Australia has made clear it prefers the American AN/BYG-1 system, along with the joint Australian-US heavyweight Mark-48 torpedo, as its main weapon.

A decision has yet to be made on which firm will be responsible for integrating the system - essentially to detect, acquire and track targets - with US defence contractor Raytheon also said to be a contender.

Given the close relationship and the fact that its technology will be used, Washington was always going to take a keen interest in Canberra's choice to build the boats.

Senior US officials were heavily involved in the competitive evaluation process and it was peer reviewed by retired Navy Vice-Admiral Paul Sullivan, among others.

The US reportedly at first favoured Japan over France or Germany for the sub build because of its existing close ties to the US Navy, along with regional security issues at a time of a rising China.

Japan expressed "deep regret" at not being selected, but analysts said the decision largely boiled down to capability.

France has extensive background in building submarines for others, while Japan still lacks experience in exporting military hardware.

"I genuinely think the decision was made on technical grounds," said Mr Stephan Fruehling, deputy director of the Military Studies Programme at the Coral Bell School of Asia-Pacific Affairs.

A breakdown on the cost of the combat system has not been provided, but analysts said it would be included in the A$50 billion ballpark figure given by Canberra, accounting for less than a third.

AGENCE FRANCE-PRESSE