§ Mr. HancockTo ask the Secretary of State for Defence (1) what were the reasons which underlay his decision not to limit the equipment and systems for the Type 45 to the three former common new generation frigates partner contractors; and if he will make a statement; [107040]
(2) who will have control of the equipment selection for the new Type 45 warship; and if he will make a statement; [107041]
(3) what were the reasons involving the Horizon Programme which underlay the decision not to use a single prime contractor; and if he will make a statement. [107043]
§ Dr. MoonieThis is a matter for the Chief Executive of the Defence Procurement Agency. I have asked the Chief Executive to write to the hon. Member.
Letter from Sir Robert Walmsley to Mr. Mike Hancock, dated 2 February 2000:
I am replying to your questions to the Secretary of State for Defence about the Type 45 destroyer and Horizon frigate programmes. These matters fall to me to answer within my area of responsibility as Chief of Defence Procurement and Chief Executive of the Defence Procurement Agency.We did not limit equipment and systems for the Type 45 to the three "CNGF" former partner contractors because there were elements in their design that were superfluous to UK requirements. For example, as I said in evidence to the House of Commons Defence Committee on 16 June 1999, the unit production cost of an electronic warfare system for a national warship is planned to be about one third of that envisaged for the Horizon frigate.586WNevertheless, as a consequence of GEC (Marconi)'s membership of the now disbanded Horizon International Joint Venture Company, BAE SYSTEMS is able to make maximum use of the work accomplished during the Horizon design definition phase and, as I said in my letter dated 10 January 2000, have indicated that they will make use of some 70% of the work done for the Horizon programme. It will be for BAE SYSTEMS, as the Prime Contractor for the Type 45 programme, to make many of the decisions on equipment selection for the Type 45. However, the Company will be required to demonstrate value for money through competitive procurement of equipment and systems for the ship and to show that the equipment selected provides the required capability. This will take account of competitions already undertaken for Horizon equipment whilst moving forward with the national programme at an affordable cost.With regard to your question concerning the continuing industrial difficulties with the Horizon Programme which underlay the decision not to use a single prime contractor, the information requested was given in the supplementary memorandum submitted by the MoD to the House of Commons Defence Committee (HCDC), Session 1998/99:The key difficulty in forming an effective industrial organisation centred on the selection of a Prime Contractor able to direct its subcontractors to the extent required to manage the overall risk. In essence, the very wide range of companies involved could not agree on one of them becoming an effective leader. This prevented the nomination of an empowered prime contractor taking full responsibility for the project, which is fundamental to best procurement principles." (HCDC's eighth report, session 1998/99 (page 54).