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Contracts and Procurement

Photo: MoD

The MOD has awarded a £270M contract to upgrade the Royal Navy’s Spearfish heavyweight torpedoes which will sustain hundreds of jobs in the UK and create 40 new skilled engineering roles.

The deal with BAE Systems will ensure that the UK’s torpedo continues to be manufactured at its Broad Oak facility in Portsmouth for another 10 years.

The Spearfish programme supports 60 jobs in Portsmouth where the torpedo is designed and manufactured with an additional 40 new skilled engineering vacancies being recruited to work on the programme by BAE Systems.

The company also estimates that hundreds of jobs will be sustained in the company’s supply chain.

This year the MOD has already awarded BAE Systems a £600 million contract to run Portsmouth Naval Base and a £70 million Type 45 destroyer support contract that combined sustains more than 2,000 jobs in the Portsmouth region, including skilled engineering roles.

Defence Secretary, Michael Fallon, said: “This contract award is good news for the Royal Navy, the UK and the city of Portsmouth where around 100 engineering jobs will be created or sustained.

”Portsmouth continues to play a significant part in defence as illustrated by this contract award and has a bright future ahead of it thanks to recent investment such as the £600M contract to run the naval base, sustaining thousands of jobs, and the upcoming £100M of infrastructure work to prepare the city for the arrival of the Queen Elizabeth Class Carriers.”

The Spearfish Upgrade includes a new warhead, a change to the fuel system to improve safety, full digitisation of the weapon and a new fibre optic guidance link to improve performance.

They are carried by the Royal Navy’s Astute, Vanguard and Trafalgar Class submarines and can target both underwater and surface threats.

Once the torpedo has been fired Spearfish hones in on its target using sonar and will be controlled by the submarine after launch via the new fibre optic link.

Bernard Gray, the MOD’s Chief of Defence Materiel, said: “Spearfish is one of the most powerful and advanced wire guided torpedoes in the world and enables Royal Navy submarines to engage a wide variety of surface and underwater targets.

“The contract to upgrade these important weapons represents value for money and a significant capability boost for the Royal Navy highlighting how the MOD is investing in equipment the Armed Forces needs now and in the future to defend the UK.


An independent reviewer has today praised the “fundamental transformation” that the Ministry of Defence has undergone in the last four years.

Lord Levene, who made his original Defence Reform recommendations in 2011, today delivered his annual progress report and declared:”a leopard really can change its spots”.

The review praised stronger financial management across Defence - a vital step in ensuring that the department never again has an unaffordable, overheated programme – and finds that the MOD is now much better placed to address the challenges of the future.

Lord Levene said: “This year I perceive a sea change in attitudes from every side. One of the principal recommendations was to delegate expenditure down the chain of command to the user. This was a brave decision by Ministers and the Treasury but I think that their faith and confidence is beginning to pay off.

“To me the MOD is now a very different animal from that which I left some 20 years ago, especially in terms of showing that they can be trusted to manage the money. A leopard really can change its spots.”

Defence Secretary Michael Fallon said: “Defence has undergone significant transformation over the past four years, and I am pleased that Lord Levene has recognised the progress made, not least the much stronger financial management he observed.

“Of course, there is always more we can do. That is why I welcome Lord Levene’s suggestions for further improvement and am pleased to report that much of this work has already begun.”

The review also finds that:

·        the “right attitudes and behaviours are increasingly in place” in the Head Office;

·        the Defence Board has already come to be considered among the best in Whitehall, embedding a wholesale attitude and behaviour change, as front line commands embrace newly delegated powers;

·        financial management is much stronger in MOD than three years ago;

·        top level budgets are - on the whole - seen to ‘own’ their plans, take more responsibility for delivery and are much more active in determining their own priorities;

·        a “lean and agile” Joint Forces Command is bringing improved focus to technological enablers; and

·        a positive assessment of progress in DE&S where reforms “augur well for the future”.

As we move towards the next Strategic Defence and Security Review in 2015, the Secretary of State has reiterated his commitment to cementing and building on the progress made so far, with a strategic focus that ensures that Defence stands up to challenges from a position of strength.

To ensure progress continues, Lord Levene has accepted the Defence Secretary’s invitation to conduct a further review next year.

In another development MOD SELLS DEFENCE SUPPORT GROUP FOR £140M

The Ministry of Defence has signed a contract to sell the Defence Support Group (DSG) to Babcock for £140 million.

DSG maintains and repairs key military equipment and manages the storage of the land vehicle fleet. As part of the transaction, a 10-year service provision contract has been placed with Babcock for the maintenance, repair, overhaul and storage of current military vehicles and light weapons.

The contract award follows the announcement of the preferred bidder last month, and will see Babcock continue the services DSG currently provides.

As well as the £140 million that the sale will generate upfront, the Army will also benefit from considerable savings over the next 10 years, seeing a transformation in the way its vehicles such as Challengers and Warriors are maintained.

Minister for Defence Equipment, Support and Technology Philip Dunne MP said:

“I am delighted with the successful outcome of this transaction.  Signing this deal with Babcock will put the Defence Support Group on a sustainable long-term footing and will transform the equipment maintenance and repair support that the Army relies on both at home and overseas.

“Babcock will provide market-leading engineering and fleet management expertise to optimise vehicle availability to the Army at better value for the taxpayer.  The £140 million proceeds from the sale and the significant savings over the life of the contract represent outstanding value for money for the tax payer and will allow us to continue to focus our resources on the front line.”

Contract completion is planned for 31 March 2015 and the service provision contract will start on 1 April 2015.