Britain splits carrier contract
The Secretary of State for Defence, Geoff Hoon MP, today told the House of Commons that BAE Systems and Thales UK will join in an "Alliance" with the Ministry of Defence to design and build the two new carriers.
Hoon said the competition for the future carrier program's Prime Contract had been closely run between bids from the two companies. Following detailed analysis of their proposals by the Ministry of Defence (MOD), particular strengths were identified in each.
The Ministry of Defence has therefore recommended drawing these areas of expertise together to provide the best possible solution for meeting the project's requirements. It has proposed a partnership led by BAE Systems as the Prime Contractor, responsible for project and shipbuilding management, while Thales UK would be the Key Supplier for the whole ship design. The MOD would participate in the Alliance, managing appropriate risks and contingencies, as well as ensuring the provision of necessary assets such as trained manpower and the JSF aircraft which the carriers will embark.
Both companies have indicated their willingness in principle to participate in such an Alliance, which would be underpinned by robust contractual agreements. Work will now be carried through to Spring 2004, when the final investment decision for the program is scheduled.
It is currently envisaged that building work for the two carriers would involve four shipyards: BAE Systems at Govan, Vosper Thornycroft at Portsmouth, Swan Hunter on Tyneside and Babcock BES at Roysth. Other shipyards may become involved in due course, while Rolls-Royce is expected to provide the engines. Some 10,000 jobs are likely to be created or sustained by the project.
The two vessels, which are expected to displace around 60,000 tonnes each, will be the largest and most powerful surface warships ever built in the UK. They will be equipped with the world's most advanced stealthy and supersonic jump-jet, the Lockheed Martin F35.
Geoff Hoon said:
"Proposals put forward by BAES Systems and Thales UK have been considered carefully. Both proposals have significant strengths.But the design and construction of these immensely powerful vessels will make huge demands on the UK's industrial resources. We envisage that this strong Alliance will allow us to combine the considerable capabilities and expertise of both contractors to ensure this important new capability for the Royal Navy is delivered to time and to budget.
Chris Geoghegan, Chief Operating Officer, BAE Systems, said "We are delighted that BAE Systems has been chosen to be Prime Contractor for Britain's biggest ever warship contract, the next generation carrier. We will be taking responsibility for the design and integration of the highly complex systems, as well as for the construction and support of a vital British naval system expected to be in service for the next 50 years."
"Our task now is to work with the MoD to bring together the best industrial capability Britain can offer. We look forward to working with key suppliers, including Thales, to deliver to the Royal Navy a world class sea system, vital for the protection of our national interest."
Nigel Stewart, BAE SYSTEMS Future Carrier Managing Director, said "Our collaborative approach throughout has been consistent, as a project of this size and complexity can only succeed through partnership and collaboration. We have secured robust relationships with industrial partners. We are looking forward to building on our current relationships with Thales and all the other supplier companies, continuing the excellent working relationship we have with the MOD and the Royal Navy customer on this very important program.
Key to this team's success will be devising a successful approach to the rest of this program, and the excellence of the major suppliers chosen.
"The MOD cited our clear understanding of the program and our excellent relationship with our UK shipbuilding partners as key influencing factors in their decision. We are going to build on those, and the new team's expertise, to form up around the MOD and get on with building these formidable warships for the Royal Navy."
Thales noted that its design for the aircraft carriers has been selected and that it is set to play a key role in the program. It said that its partners in CVF who have provided magnificent support will be consulted about how their contributions can be used.
Alex Dorrian, chief executive officer of Thales Plc, said: "Thales is delighted that its design has been selected in this intensely close-run competition and that we have been identified as the Key Supplier. The project will stretch the resources of industry, the MoD has decided to draw upon Thales' strength in a three way alliance that will clearly mean substantial work for Thales in the UK. This decision represents a major step forward for Thales Plc and cements the company's position as the second largest defence contractor in the UK. It enhances the credibility of Thales' bids for prime contractorships such as the Future Integrated Soldier Technologies and Watchkeeper UAV projects, amongst others."