New service dress uniforms to be worn by Australian soldiers are being manufactured in China because the option represents the "best value for money", according to Defence.

The ABC has confirmed the $9 million contract awarded to Australian Defence Apparel (ADA) to produce the "non combat clothing" involves the use of "established sub-contractor arrangements" overseas.

In a statement, Defence said "Australian Defence Apparel was selected as the preferred tenderer, following an open competitive process".

The contract with ADA was signed on April 30 last year and will be rolled out over two years.

But South Australian Senator Nick Xenophon has slammed the decision, saying the Government fails to see the economic and jobs benefit of buying local.

"If something is a little more expensive on the surface here in Australia but it means we're going to get all sorts of flow on benefits in terms of jobs, in terms of economic activity and tax and other benefits then it's a no-brainer," he said.

"Surely something as iconic as the uniforms our serving men and women of the Defence Force wear ought to be made in Australia. The fact that it's not is nothing short of a disgrace," he added.

The Leader of the Nick Xenophon Team (NXT) party said he would seek a detailed explanation from the Defence Minister Marise Payne.

The darker brown khaki look was chosen in a nationwide survey of soldiers, who said it better reflected their proud heritage.

In July, the new dress uniform made its public debut in Paris when Australian soldiers led a march down the Champs Elysees for Bastille Day celebrations.