Between 2005 and 2007, Gibbs & Cox's Evolved Arleigh Burke-class destroyer concept and Navantia's Álvaro de Bazán-class frigate competed for selection as the AWD design.

Increasing slippage pushed the original planned 2014-2016 commissioning dates out by at least three years, with lead ship Hobart to be completed by June 2017, Brisbane in September 2018, and Sydney by March 2020.

The AWD Alliance, Navantia, and the involved shipyards were criticised for underestimating risks, costs, and timeframes; faulty drawings and bad building practices leading to repeated manufacturing errors; and blame-passing.

The alliance concept was panned for having no clear management structure or entity in charge, and having the DMO simultaneously acting as supplier, build partner, and customer for the ships.

[5] The initial proposal – to build an additional six Anzac-class frigates configured for wide-area anti-aircraft warfare – did not go ahead as the Anzac design was too small to effectively host all the required equipment and weapons.

[7] In 2004, the Department of Defence identified that the future air warfare destroyer class would be built around the United States Navy's Aegis Combat System.

[8][9] The two ship designs were equivalent in many areas, including length, speed and weapons outfit, although the Arleigh Burke class was larger with a displacement 2,200 tons greater than the Spanish frigate, and had superior capabilities in regards to range (700 nautical miles (1,300 km; 810 mi) greater), helicopter operations (two embarked helicopters instead of one), primary armament is rather comparable (2 x 32-cell (64 total cells) Mark 41 Vertical Launch System compared to a 48-cell launcher), and close-defence (with a second close-in weapons system).

[12] The Australian government sought to extend the offer into early 2009, so as to review the recommendations of the Defending Australia in the Asia Pacific Century: Force 2030 white paper due for completion at the end of 2008, and to enquire about acquiring a fourth Aegis system from the USN, before ordering or cancelling the fourth destroyer.

[13] According to the Navy League, building a fourth destroyer would be relatively cheap (money for design and other 'start-up' costs would have already been spent) and improve RAN capabilities (by offering increased flexibility and redundancy, particularly in the event of a Falklands War-like armed conflict).

[14][18] In April 2022, Navantia Australia made an unsolicited bid to build an additional three Hobart-class air warfare destroyers for the Royal Australian Navy due to possible delays to the Hunter Class Frigate program.

[8] The combined diesel or gas turbine (CODOG) propulsion arrangement consists of two General Electric Marine model 7LM2500-SA-MLG38 gas turbines, each generating 17,500 kilowatts (23,500 hp), and two Caterpillar Bravo 16 V Bravo diesel engines, each providing 5,650 kilowatts (7,580 hp).

[7] Onboard electricity requirements (the hotel load) are supplied by four MTU prime mover diesel motors connected to Alconza alternators.

[7] For close-in defence, the ships will carry an aft-facing Phalanx CIWS system, plus two M242 Bushmasters in Typhoon mounts sited on the bridge wings.

[26] In 2021, the government announced that the Hobarts would be armed with Tomahawk cruise missiles to enable them to strike land targets at greater distances up to 2,500 km (1,553.43 mi).

[7] The system feeds into the Australian Tactical Interface; six multi-function consoles that are capable of handling the destroyer's sonar, electronic warfare, and close-defence functions in addition to Aegis.

Other sensors include an Ultra Electronics Series 2500 electro-optical director, a Sagem VAMPIR IR search and track system, and Rafael Toplite stabilised target acquisition sights for each ship's Typhoons.

[39][40] However, during June, NQEA advised the AWD Alliance that the shipbuilder was undergoing restructuring and may have difficulty in meeting its contracted obligations.

[40] In October 2010, the 20-by-17-metre (66 by 56 ft) central keel block manufactured by BAE for Hobart was found to be distorted and incompatible with other hull sections.

[41] Other major issues during Hobart's construction included the need to replace 25% of the internal pipework due to faulty manufacture, and the initial rejection of the ship's mainmast block because of defects in the cabling and combat system equipment.

[47][48] An additional nine-month delay was announced in September 2012; this was intended to create a better transition of labour from the destroyers to following shipbuilding projects (replacements for the Collins-class submarines and the Anzac-class frigates), and achieve some savings in the federal budget.

[49][50] A March 2014 report by the ANAO heavily criticised the DMO and the AWD Alliance for underestimating the risks in redesigning the ships for Australian operations, and building them in shipyards with no recent warship construction experience.

[42] The ANAO report also criticised designer Navantia and the shipyards involved in block construction over poor drawings, repeated errors, and bad building practices.

[44] The overarching alliance concept has been repeatedly denounced, with no effective management structure or entity in charge, (allowing for repeated blame-passing between the individual alliance partners, Navantia, and the subcontracted shipyards), and the DMO locked in a contradictory role (simultaneously acting as supplier, build partner, and customer).

[50] In May 2015, the DMO announced additional schedule slippage, with Hobart to be handed over to the RAN in June 2017, Brisbane due in September 2018, and Sydney by December 2019.