Australia has picked Lockheed Martin [LMT] over Raytheon [RTN] to be the combat system integrator for the Future Submarine Program.

Lockheed Martin’s selection means that the company and the Australian defense department will now begin negotiating a contract. During its work on the program, Lockheed Martin is expected to draw upon expertise from General Dynamics [GD] Electric Boat and Australian industry.

“Lockheed Martin is honored to have been selected as the preferred tenderer to be the Future Submarine Program combat system integrator,” the company said in a statement Sept. 30. “We understand the vital importance of the Future Submarine Program and stand ready to assist the Australian government to deliver a regionally superior, locally created, sustainable combat system.”

Lockheed Martin, which has a similar role on the U.S. Navy’s Virginia-class fast-attack submarine, and Raytheon both submitted high-quality proposals, according to a statement by the Australian defense department. Raytheon will continue to support Australia’s existing fleet of Collins-class submarines.

The Future Submarine Program, also known as SEA1000, plans to build 12 submarines for the Royal Australian Navy. France’s DCNS Group was tapped in April to design the vessels, which will be built in Adelaide in South Australia.

The new submarines are supposed to provide more range, endurance and capabilities than the Collins fleet. The $50 billion program is expected to be the largest defense procurement in Australian history.

Separately, the Australian defense department announced Sept. 24 that it has completed shipbuilder sea trials for the Hobart, the first in a class of new air warfare destroyers for the Australian navy.

“Hobart has now proven its hull, propulsion and navigation systems after several days of testing” off the coast of South Australia, said Christopher Pyne, Australia’s defense industry minister. “Further sea trials will take place in early 2017, when Hobart conducts more advanced testing of the ship’s combat and communications systems.”

The ship is scheduled for delivery to the defense department in June. Two other Hobart-class destroyers — Brisbane and Sydney — are under construction. Brisbane is scheduled to enter water first, in December.

The Air Warfare Destroyer Alliance is tasked with delivering all three destroyers. The alliance consists of Australian shipbuilder ASC, mission systems integrator Raytheon Australia and the government’s Capability Acquisition and Sustainment Group. The U.S. Navy and Lockheed Martin are providing the Aegis weapon system, and Spain’s Navantia is the platform systems designer.