Statement to the House of Commons by Stuart Andrew, Parliamentary Under Secretary of State for Defence Procurement
I am pleased to inform the House that the Ministry of Defence (MOD) has taken a major step forward in the competition to build five Type 31e Frigates.
On 10 December 2018 the MOD awarded three contracts for the Competitive Design Phase. The contracts have been awarded to consortia led by BAE Systems, Babcock and Atlas Elektronik UK and are valued at up to £5 million each.
The Competitive Design Phase is the first stage of the design process which will allow suppliers to demonstrate how they can deliver the Royal Navy’s threshold capability by the target date and within budget. These contracts will fund industry to prepare detailed proposals for the design and build of the five Type 31e Frigates.
Concurrent with the award of the Competitive Design Phase contracts, the MOD has issued to each consortium an Invitation to Negotiate for the single Design and Build contract that we intend to place by the end of 2019. Conducting the Competitive Design Phase in parallel with the Design and Build contract negotiations will allow the award of the Design and Build contract earlier than would be normally be the case in a major procurement.
It remains our intention to seek a firm price contract for five ships, less an amount of Government Furnished Equipment, for £1.25 Billion, giving an average price of £250 million per ship. We want the first ship in 2023, with all five ships delivered by the end of 2028. The Government remains committed to a surface fleet of at least 19 frigates and destroyers.
This contractual milestone is a tangible and positive result of the National Shipbuilding Strategy published in September 2017. The Strategy sets out how the Government intends to work with industry to develop a strong and globally competitive UK shipbuilding and marine engineering sector. The Type 31e procurement is seeking to maximise the UK prosperity and export potential, without compromising on cost and time.
The award of the Competitive Design Phase contracts is a testament to the MOD’s positive engagement with industry and the commitment to move the programme forward.