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MOD announces £235 million submarine nuclear propulsion deal

Rolls-Royce have been awarded a £235m contract by the MOD to provide the support, advice and material required to ensure the continued safety and availability of the systems on board the current fleet of Trafalgar, Vanguard and Astute class submarines until 2022. The deal was announced on Monday as Defence Secretary, Gavin Williamson, visited Rolls-Royce’s site in Raynesway, Derbyshire. Mr Williamson said that the contract demonstrates the ongoing successful partnership between the Submarine Delivery Agency and industry. The contract will sustain around 500 UK jobs, predominantly at Rolls-Royce in Derby and satellite offices at HMNB Clyde and HMNB Devonport. The contract forms part of a wider suite of contracts with Rolls-Royce to provide naval reactor plant design, support, advice and components to the submarine build programme and provide enabling services such as infrastructure and IT.

Reports that UK-France Future Combat Air System is “Terminated”

Defense News reported on Thursday that confusion had arisen surrounding the future of the Franco-British Future Combat Air System project following a suggestion from Dassault Aviation CEO Eric Trappier that the project had been “terminated.” However, Defense News reports that there has been no formal termination of the agreement – rather it has been downgraded to a technological demonstration. Blame was put on the UK’s impending departure from the European Union. Didier Quentin, a member of the French parliamentary foreign affairs commission said that “Brexit tends to absorb the energy and finances of our U.K. partner, who is not necessarily very available to carry out ambitious projects with us,” and that France had “just given up on a joint combat drone demonstrator project under the Future Combat Air System (FCAS): it has been replaced by studies on technological bricks which are much more modest.” The FCAS project was launched in November 2014 between Dassault Aviation and Britain’s BAE Systems. The project’s status was confirmed by a spokesman for BAE Systems, who told Defense News that the group is continuing “to work with our partners on the Anglo-French program, with a focus on developing mutually beneficial air systems technologies.”

MOD reveals five-year plan for military sites 

MOD published an update to the Defence Estate Optimisation Programme this week, which sets out new information for 33 military sites across the UK. In order to ensure that the defence estate is fit for purpose, a 25-year strategy was published in 2016 to optimise the defence estate and meet future military requirements. The update announcement confirms that £1.5billion will be invested over the next five years to ensure that the estate meets military objectives and service personnel expectations. The update confirms that a number of bases will be retained, including RM Chivenor, Norton Manor Camp, Condor Airfield, Rock Barracks and Molesworth. Defence Secretary, Gavin Williamson said that, by creating a smaller more focused estate, investment can be directed to the enduring sites, and that the the £4 billion committed to developing the defence estate will create and sustain jobs in industry and the local economy.


Defence contribution to national prosperity: Asked whether MOD considers wider employment, industrial and economic factors in its value for money assessments of where to procure defence systems, Defence Minister for the Lords, Earl Howe, replied that “This Government is committed to ensuring that defence procurement contributes to a more dynamic and productive economy. We therefore strive to obtain the capabilities we need at the best value for the taxpayer, in a way that strengthens our economy and bolsters long-term prosperity. Ministry of Defence procurement consider all relevant costs and benefits to UK society in making value for money assessments. These assessments are made in accordance with the HM Treasury Green Book, and without hampering open competition when relevant for procurement decisions.”

Defence procurement policy: Asked how many suppliers have been excluded from bidding for contracts due to their not meeting the criteria in his Department's Procurement Policy Note 03/14 in each year since 2014, Defence Procurement Minister, Stuart Andrew MP, answered that “The Cabinet Office's Procurement Policy Note 03/14 requires Central Government to include measures to promote tax compliance in procurement over £5 million. The MOD is compliant with this policy and includes tax compliance conditions in its tenders and contracts. Information on whether suppliers have been excluded from bidding for contracts is not held centrally and, as the MOD has awarded nearly 4,000 contracts competitively since 2014, this data can only be provided at disproportionate cost.”

MOD participation in EU initiatives: Asked whether it is the Government’s intention to seek continued participation of the European Defence Agency (EDA), European Defence Fund (EDF) or to be part of Permanent Structured Co-operation (PESCO), Mr Andrew “The proposed terms for the UK's participation in EU agencies and bodies until the end of 2020 are set out in Article 128 of the Withdrawal Agreement. As outlined in the Political Declaration, the UK will seek an Administrative Arrangement with the EDA that would enable us to participate in EDA projects and programmes where it is of mutual benefit, to further our defence cooperation opportunities. The Political Declaration provides the option for the UK to participate in capability projects through the EDF, subject to conditions in Union Law. Any UK participation in EDF projects would be aligned with our requirements and represent value for money. The UK has not joined PESCO, but recognises its potential to support increased defence investment in Europe and the development of capabilities that contribute to NATO. The Government is scrutinising the current list of PESCO projects to identify which of those we might have an interest in, or be able to add value to, as a third country. Our future participation is subject to the rules governing third country access that are still being negotiated by PESCO Participating Member States.”

Type-26 procurement costs: Asked what the unit price is of each of the three Type 26 frigates presently on order, Earl Howe replied that “In July 2017, MOD announced the award of a contract valued at £3.7 billion to manufacture the first batch of three Type 26 Frigates. The manufacture contract covers the build of the first three Type 26 Frigates through to sea trials and vessel acceptance by the Royal Navy, as well as the remaining development costs for the class. The contract also includes the procurement of the medium calibre gun for the first three ships and the modifications needed to the Clyde shipyards at Govan and Scotstoun to enable the manufacture of the Type 26. The detailed pricing of the contract is a commercial matter between the MOD and BAE Systems and I am withholding the cost per ship, as its publication would be prejudicial to commercial interests.”


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