SYDNEY — The Australian government on Monday selected U.S.-based defense contractor Raytheon as the sole bidder for a ground-based air defense system contract worth up to AUD $2 billion (U.S. $1.5 billion).

The surface-to-air missile system will replace the country's 30-year-old short-range capability, which is due to be retired by early next decade, Defence Minister Marise Payne said in a statement.

"A modern and integrated ground-based air defense system is needed to protect our deployed forces from increasingly sophisticated air threats, both globally and within our region," Payne said.

Australia, a staunch U.S. ally, last year committed to increase defense spending by nearly AUD $30 billion over the next 10 years at a time when China's economic and military power is growing throughout the Asia-Pacific region.

Australia has been streamlining its military tendering process to more quickly acquire equipment. Raytheon Australia will receive a single supplier limited request for tender for the ground-based air defense system by the end of June, the government said.

Raytheon Australia said its proposal was based on the Raytheon/Kongsberg Gruppen ASA National Advanced Surface to Air Missile System in use by seven countries, including the United States, Norway, Finland, Spain and the Netherlands.

"Our solution combines proven U.S. and Norwegian technology and Australian innovation backed by local integration and sustainment capability," said Raytheon Australia Managing Director Michael Ward.

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