MoD Announces It Will Sign A Contract for Astute Boat Seven (excerpt)
(Source: In-Cumbria; posted March 07, 2018)
By Natalie Chapples
Having already ordered six Astute-class nuclear-powered attack submarines, the United Kingdom has finally decided to order a seventh boat, and the contract with BAE will be formalized this year, according to the Ministry of Defence. (BAE photo)
The Ministry of Defence has announced it will sign a contract for Astute boat seven less than 24 hours after ministers told Barrow and Furness MP John Woodcock he would not have to wait long for “good news”.
John hailed the announcement, made in a written statement from new defence procurement minister Guto Bebb, as a “huge relief for the workforce and UK naval security”.
The breakthrough comes after several fraught months in which Ministry of Defence officials and BAE management were put under pressure to scrap the seventh boat to alleviate the defence equipment funding crisis.
In the formal statement, Mr Bebb informed MPs: “The Ministry of Defence (MOD) has received approval in principle from Her Majesty’s Treasury (HMT) to recognise new contingent liabilities associated with the Astute Boat 7 ‘Whole Boat’ Contract.”
The announcement paves the way for the formal contract to be signed before the end of the financial year.
Responding after meeting Mr Bebb about the submarine programme last night, John said: “Thank goodness the government has listened to the arguments and is pressing ahead with Astute boat seven after all. (end of excerpt)
Click here for the full story, on the In-Cumbria website.
Contingent Liability: Statement by Minister of State Earl Howe (Ministry of Defence)
(Source: UK Ministry of Defence; issued March 6, 2018)
Statement by Earl Howe (Minister of State, Ministry of Defence)
My hon. Friend the Minister for Defence Procurement (Guto Bebb) has made the following Written Ministerial Statement.
I am pleased to inform the House that I am today laying a Departmental Minute to advise that the Ministry of Defence (MOD) has received approval in principle from Her Majesty’s Treasury (HMT) to recognise new contingent liabilities associated with the Astute Boat 7 ‘Whole Boat’ Contract.
Negotiations are ongoing and the contingent liabilities will come into force on signature of the contract.
The Departmental Minute describes the Contingent Liability that the MOD will hold as a result of placing the Astute Boat 7 ‘Whole Boat’ Contract, which will provide for the production and testing of the Vessel. The maximum contingent liability against the MOD is unquantifiable and will remain until the Out of Service Date of the submarine.
It is usual to allow a period of 14 Sitting Days prior to accepting a Contingent Liability, to provide Members of Parliament an opportunity to raise any objections.
Within the Boat 7 contract, BAE Systems Marine Ltd limit their exposure to Product Liability to £1 billion per incident and £300 million in any 12-month period. This limits the contractor’s exposure for claims by the MOD for losses associated with the product being defective or deficient, and creates an exposure for MOD to third party claims against the contractor for losses associated with the product being defective or deficient. It is the view of the Department that the likelihood of any claim is remote.
The Boat 7 contract also includes a narrative Shipbuilders Risks Indemnity (SRI) condition rather than Defence Condition (DEFCON) 663 which would provide a standard form of SRI.