South Australian boot maker Rossi Boots has missed out on a contract to supply boots to the defence force because its price was too high.
Sky News reports that the South Australian company which supplied boots to Australian troops in both world wars failed the value-for-money criteria under commonwealth purchasing rules.
The Defence Materiel Organisation (DMO) instead awarded the contract to another supplier and the boots will be made in Indonesia.
Independent senator Nick Xenophon criticised the decision and said that it does not take into account the economic multiplier benefits of making the boots locally.
'Rossi Boots has a soul (sole) in both senses of the word: in terms of tough durable boots and in terms of being a strong family company,' he told reporters at Parliament House in Canberra on Monday.
According to the ABC, Senator Xenophon said the DMO cannot consider such benefits under its current rules.
Senator Xenophon and Senator John Madigan of the Democratic Labour Party have established an inquiry into government procurement rules. It is due to report later this week.