Type 31e Frigate price increases
The Telegraph reported on Wednesday that the target £250m unit cost of the Royal Navy’s future type 31e frigate will rise. Whitehall and industry sources were quoted as saying that the target has now effectively been abandoned after warnings that a viable vessel could not be built at that price. Government-furnished equipment – said to include weapons systems and software – will no longer be included in the price after the Royal Navy warned the ships would be under-armed and unable to protect themselves. Hence, while the headline ‘cost-per-hull’ figure may remain unchanged, MDO will in effect be buying less for its money. MOD will also take on more programme risk, such as inflationary pressures and foreign exchange fluctuation, industry concerns that – according to the report – were part of the reason why the original programme was scrapped and restated in 2018.
If accurate, the changes to the programme threaten to unravel the 2017 National Shipbuilding Strategy, which set out the means by which MOD would guarantee a sustainable warship building capability in the UK by spreading work around existing UK shipyards and design ships attractive to the export market. The Type 31e programme was at the heart of the strategy and responsible for setting the export-competitive target unit price. An MOD spokesperson said that ‘the preferred bidder for the design and manufacture of the ships will be announced by December 2019 and we intend to purchase five ship sat an average production cost of £250m.’
Defence Minister chairs SME Forum
On Thursday NDI and a number of our members joined defence procurement minister Stuart Andrew at Raytheon in Broughton, North Wales for the latest meeting of the Defence Suppliers’ SME Forum. The first meeting since MOD published its Small and Medium-Sized Enterprise Action Plan 2019-2022 in March, the Minister outlined the plan details, including how the department intends to increase its procurement spend with SMEs and means to work with its major suppliers to remove barriers to supply chain participation. The plan covers the strengthening of supplier engagement, improvement to procurement policy and process, making it easier to do business with defence and encouraging innovation. The discussion also included a debate on how MOD will work with its newly-appointed SME Champions in each of its 19 key suppliers. NDI stressed the need for the department to focus on delivery of the action plan as a priority.
Defence Space Strategy: Asked when his Department plans to publish a Defence Space Strategy, defence procurement minister, Stuart Andrew replied that “the MID is firmly committed to a number of space programmes, and we are assessing our space capabilities, coherence and requirements. Our strategy work on space has developed significantly and will play a key role in Spending Review decisions. we are currently reviewing the right timing for publication of our strategy.”
Offensive Cyber Capabilities: Asked what steps MOD is taking to increase the effectiveness of the UK’s offensive cyber capabilities, armed forces minister, Mark Lancaster said that “The MOD works in partnership with the Government Communications Headquarters to deliver the National Offensive Cyber Programme, harnessing the expertise of both organisations to establish a world-class offensive cyber capability delivered through a "Joint Mission" construct.”
Join NDI at the East Midlands Conference Centre in Nottingham on 26th June for our second Meet the Buyer event of 2019. Focusing on buyers and opportunities in the maritime domain, this event will be a great opportunity to meet, connect with and present to decision makers across the defence industry working on Army programmes. Buyers confirmed so far include both BAE Systems and Rolls Royce. In the evening we will be holding our Annual Black Tie dinner to celebrate the achievements of our members over the past 12 months.Book here to secure your place today!