§ Mr. ChidgeyTo ask the Secretary of State for Defence (1) what discussions(a) he and (b) officials of his Department have had with executives of BAE Systems regarding a non-competitive procurement strategy for the Type 45 destroyer; [142764]
(2) what plans his Department has to procure up to 12 Type 45 destroyers by means of an incremental capability strategy; how prices for any changes in specification over the life of the programme will be negotiated; what mechanisms there will be to control costs; and if he will make a statement. [142765]
§ Dr. Moonie[holding answer 14 December 2000]: The contract for the Demonstration and First-of-Class Manufacture (DFM) was placed with BAE Systems Electronics, the nominated Prime Contractor for the Type 45 programme, on 20 December. As I announced on 11 July 2000, Official Report, column 701, the design will be capable of evolutionary improvement through an incremental acquisition plan. This will enable the required capability to be inserted during the class build and provide growth paths to enable future capability insertion over the life of the class.
Prices for changes to specification will be negotiated in the usual way and be subject to affordability criteria. The contractual maximum price represents the limit of our cost exposure and the contract contains strong incentives for the contractor to deliver at a lower price. The hon. Member will be pleased to note that the SMART approach adopted by the MOD provides the best opportunity to deliver additional capability into the programme without increasing the price.
249WThe DFM contract covers the construction of the first three ships of the class only. Sub-contractors must now reach satisfactory agreements with the Prime Contractor to secure the opportunities offered to them under the contract; the MOD will—through its involvement in the Integrated Project Team—ensure that these negotiations are conducted fairly. MOD agreement to all significant sub-contracts will be required.
The BAE Systems Type 45 Prime Contractor and MOD have received an unsolicited proposal from BAE Systems Marine concerning the procurement approach to the Type 45 programme. The proposal will be evaluated and the MOD will consult with other interested Departments before coming to a conclusion.
Plans are to seek bids for the next batch of three ships around 2004. BAE Systems Marine and Vosper Thornycroft have expressed an interest in bidding for this work. Bids for work on the follow-on ships should be made to the Prime Contractor at the appropriate time.
§ Mr. KeyTo ask the Secretary of State for Defence (1) how the Design for Manufacture contract with BAE Systems for the Type 45 programme specifies equitable competition between BAE Systems Marine and Vosper Thornycroft for batches of later ships of the class; and if he will make a statement; [142754]
(2) what the in-service date is for the Type 45 destroyer First of Class; and if he will make a statement; [142752]
(3) if he will approve the Defence Procurement Agency's Design for Manufacture contract with BAE Systems for the Type 45 destroyer programme in advance of agreement between BAE Systems and Vosper Thornycroft on the construction of ship platforms. [142755]
§ Dr. Moonie[holding answer 14 December 2000]: The contract for the Demonstration and First-of-Class Manufacture (DFM) was placed with the BAE Systems Prime Contract Office, on 20 December. The in-service date is 2007 for the first-of-class ship. The absence of 'back to back' sub-contracts with the shipyards will not delay this programme.
The DFM contract covers the construction of the first three ships of the class only. Sub-contractors must now reach satisfactory agreements with the Prime Contractor to secure the opportunities offered to them under the contract; the MOD will—through its involvement with the Integrated Project Team—ensure that these negotiations are conducted fairly. MOD agreement to all significant sub-contracts will be required.
Plans are to seek bids for the next batch of three ships around 2004. BAE Systems Marine and Vosper Thornycroft have expressed an interest in bidding for this work. Bids for work on the follow-on ships should be made to the Prime Contractor at the appropriate time.
§ Mr. Matthew TaylorTo ask the Secretary of State for Defence what cost to benefit analysis his Department has undertaken of moving from a competitive to a non-competitive procurement strategy for the Type 45 programme. [142750]
§ Dr. Moonie[holding answer 14 December 2000]: There has been no move to a non-competitive procurement strategy for the Type 45 programme and thus no change to the strategy I announced on 11 July 2000, 250W Official Report, columns 701–712. We would not move to a non-competitive procurement strategy unless there were compelling reasons to do so.
The BAE Systems Type 45 Prime Contractor and MOD have received an unsolicited proposal from BAE Systems Marine concerning the procurement approach to the Type 45 programme. The proposal will be evaluated and the MOD will consult with other interested Departments before coming to a conclusion.