Defence refers $1bn Thales defence contract to national corruption watchdog

Greg Moriarty said Defence had referred the matter to the corruption watchdog. (Supplied: Department of Defence)

The Defence Department has asked the National Anti-Corruption Commission to investigate the awarding of a $1.2 billion contract to a French-owned weapons company after the auditor-general found evidence of "unethical conduct".

In 2020, Thales won a 10-year contract to manage two Commonwealth-owned munitions facilities that are considered crucial for the government's new Guided Weapons and Explosive Ordnance Enterprise.

This week, a report by the National Audit Office detailed how a defence official handed confidential information to Thales during the tender process and solicited a bottle of champagne from the company in 2017.

The defence employee later went on to work for Thales, which won the lucrative contract despite an assessment finding its bid was deficient and did not represent "value for money".

In a statement to the ABC, Defence Secretary Greg Moriarty revealed the matter had been referred to the NACC.

"I can confirm that the Department has referred this matter to the National Anti-Corruption Commission," Mr Moriarty said.

Earlier this week, a Thales Australia spokesperson told the ABC it was "considering these matters as appropriate".

According to acting auditor-general Rona Mellor, "probity risks" emerged almost immediately when a defence employee provided Thales with confidential information.

The ANAO said that same employee solicited a bottle of champagne ahead of the billion-dollar deal to run the Mulwala and Benalla munitions ventures, and then joined Thales after it was awarded the contract.

"The email exchange indicated that the initial offer [of champagne] had been conditional on the Mulwala Redevelopment Project being removed from the Projects of Concern list," the ANAO report stated.