Low sub price too good to be true: ASPI

Low bids for Australia's new submarines could turn out to be too good to be true, with the risk that costs will ratchet up once a final winner is chosen, a defence expert says.

Dr Mark Thomson, an analyst with the Australian Strategic Policy Institute, said media reports cited bids of $10-12 billion for eight boats and a dozen for under $15 billion - substantially less than some earlier estimates.

That's less than the cost of the navy's six Collins subs, less capable vessels constructed in the 1990s when labour costs were lower and the US dollar exchange rate was more favourable.

Three companies - from Germany, France and Japan - are competing to build Australia's next generation of subs, with their proposals now being under consideration through the government's competitive evaluation process.

The bids have not been publicly disclosed.

Dr Thomson said the six Collins boats cost $9.3 billion in today's dollars, rising to $10.5 billion once defects were corrected.

He said $10-12 billion for eight boats looked a great deal compared with more than $10 billion for six but that didn't seem quite right.

"A cynic might observe that a non-binding beauty contest such as the CEP allows bidders to promise low prices and ratchet up the figure when the competition has left the field," he said.

The government hasn't revealed when the winner will be announced.

Foreign Minister Julie Bishop, in Japan this week, said only that the evaluation process was under way and a decision would be made "some time this year".

In the ASPI paper released on Tuesday, analyst Andrew Davies said all contenders brought relative strengths to the table.

A deal with a European supplier would be largely uncontroversial while a deal with Japan presented both threats and opportunities in terms of regional relationships.

Dr Thomson said for the US the name of the game was to hedge against China's increasing strategic assertiveness and its key interest was in generating solidarity and co-dependence among its allies in Asia.

"The Turnbull government will be remiss if they fail to consider the geopolitics of the submarine choice, and they'll be confronted with uncomfortable issues if they do," he said.