The federal government has announced a new $100 million contract for Bendigo defence manufacturer Thales Australia to build another 40 Bushmaster protected vehicles.

Thales has built 130 Bushmasters for the army over the past two years.

The deal will supply vehicles to the army’s Second Long-Range Fires Regiment at the Edinburgh Defence Precinct in South Australia.

The vehicles will support a multi-mission phased array radar battery to provide critical command and control functions.

Defence Industry and Capability Delivery Minister Pat Conroy said the contract responded to a regional arms race and great strategic uncertainty.

“We need to deter anyone who has any thought of threatening Australia. The best way of doing that is to let them know we have the weapons and the range to strike back,” he said.

“It’s the best armoured truck in the world. We’ve seen it save lives in the Middle East and it’s saving lives in Ukraine right now.”

The Bushmasters rose to notoriety in Ukraine’s war against Russia after Australia donated more than 100 to Ukraine.

The federal government is currently running a tender to put missiles on army vehicles, with the Bushmaster one option under consideration.

Mr Conroy said that decision would be made at the end of the year.

“We’re expanding the Australian Army and equipping it with long-range strike capability. We’re moving the army from having a range of 40km to having a range of over 500km,” Mr Conroy said.

“We’re rapidly building up our missile stockpiles and expanding our Australian Army.”

Contract follows scandal, braking issues and uncertainty

The contract gives security for the future of the Bendigo manufacturer after it made staff redundant when government contracts dried up in 2022.

The new deal will provide work at the facility until the end of 2026, supporting 250 local ongoing jobs.

It also comes after its French-owned parent company was linked to an Australian corruption scandal, involving a bottle of champagne.

In October, Thales was referred to the National Anti-Corruption Commission following an auditor-general report that uncovered evidence of “unethical conduct” over a $1 billion munitions contract.

The rollout of the army’s Hawkei vehicles built by Thales was also plagued by problems and delayed due to braking issues.

The $1.3 billion contract to build 1,100 of the small tactical vehicles and their trailers was plagued with problems, leaving the vehicles sitting idle outside the Central Victorian factory.

In July last year, Mr Conroy said the issue was resolved and the Hawkeis were in the process of being rolled out to the army.