Australia has shortlisted three consortia for its Domestic Munitions Manufacturing Arrangements Project.

The shortlist includes Alliant Techsystems teaming with NOIA Nominees, American Ordnance and Day & Zimmerman.

BAE Systems Australia, with support from BAE UK and BAE US, is included as head of the consortium including Expal Systems.

Also listed is current munitions manufacturer Thales Australia with its partners General Dynamics-OTS, NAMMO and Winchester Australia.

Minister for Defense Materiel Mike Kelly said the three consortia will move onto the official tender process that includes release of a Request for Tender early next year.

A final decision on a manufacturer will be made in the third quarter 2014 with the winning consortia taking over production sometime in 2015.

Under the DMMA contract, the winner will run the two non-guided missile armaments production centers of Mulwala, a government owned establishment, and Benalla, built in 1996 and owned by Thales.

Both centers have been run by Thales since the 1990s.

The winner also will work with the Australian Department of Defense on general munitions procurement strategies.

Kelly said the project intends to deliver a commercial-based arrangement for the production of munitions, propellant and high explosives.

"This will include incorporating operations at the Australian facilities into an established global supply chain," he said.

The contract is let under the government's Priority Industry Capability for Selected Ballistic Munitions and Explosives program. As such, Kelly expects the DMMA contract will be a significant boost to jobs for Australians in the regions surrounding the munitions factories.

When BAE announced in November it would bid for the contract, it said it would use expertise from its munitions manufacturing business in the United Kingdom and explosives and propellants development and production in the United States.

In readiness for the DMMA project, in September last year Thales Australia reorganized its armaments manufacturing businesses and created Australian Munitions.

The division encompasses Thales's Victoria state Benalla factory, an explosives and propellants facility at the government's Mulwala site in New South Wales state and other logistics services in Australia.

Kevin Wall, who joined Thales Australia in 2001, was made Thales Australia Armaments vice president.

At the same time as forming Australian Munitions, Thales announced its board had approved the formation of a joint venture business in India with the public sector company Bharat Electronics.

The JVC focuses on design, development, marketing, supply and support of civilian and select defense radars for Indian and international markets.