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30 Jan 03. U.K. Secretary of State for Defence, Geoff Hoon MP, set out in the House of Commons, today 30th January 2003, a proposal for BAE SYSTEMS and Thales UK to work in partnership to design and build two new aircraft carriers for the Royal Navy, planned to enter service in 2012 and 2015 worth £30m up to the end of Stage 3.

These two new flagships will be the largest warships ever ordered and ever
constructed in the United Kingdom. This will also be the largest single naval
procurement, production and support programme which the UK has seen in more than 50 years, with an overall government budget of £10bn through a service life of up to 50 years.

The competition for the future carrier programme’s Prime Contract had been closely run between bids from the two companies, (See, BATTLESPACE ALERT Vol.5 ISSUE 3, January 25th 2002). Following detailed analysis of their proposals by the MOD, particular strengths were identified in each. The Ministry of Defence has therefore recommended drawing these areas of expertise together to provide the best possible solution for meeting the project’s requirements. It has suggested that the partnership would be led by BAE SYSTEMS as the Prime Contractor, responsible for project and shipbuilding management, while Thales UK would be the Key Supplier for the whole ship design. Thales’ design for the aircraft carriers has been selected and the company is set to play a key role in the £2.7bn future carrier programme, as part of a tripartite alliance with BAE Systems and the MoD. The company will, in the coming weeks, be negotiating details of how it will under joint management make a major contribution to the programme. The company’s partners in CVF who have provided magnificent support will be consulted at the earliest opportunity about how their contributions can be used. BMT was a major contributor to the design of the carrier, as part of the Thales team.

The MOD would participate in the Alliance, managing appropriate risks and contingencies, as well as ensuring the provision of necessary assets such as trained manpower and the JSF aircraft which the carriers will embark.

Both companies have indicated their willingness in principle to participate in such an Alliance, which would be underpinned by robust contractual agreements. Work will now be carried through to Spring 2004, when the final investment decision for the programme is scheduled.

Under this contract, BAE SYSTEMS will work with Thales and the MoD until Main Gate Approval in May 2004 Stage 3 covering such activities as Risk Reduction and design. Following Main gate Approval, BAE SYSTEMS, as prime contractor will formulate contracts for the main sub-contract work including the crucial combat systems, worth £450m, between main contenders Thales and AMS. The EW system could be supplied by either Thales or Lockheed Martin.

It is currently envisaged that building work for the two carriers would involve four shipyards: BAE Systems at Govan, Vosper Thornycroft at Portsmouth, Swan Hunter on Tyneside and Babcock BES at Rosyth. Other shipyards may become involved in due course, while Rolls-Royce is expected to provide the engines.
Some 10,000 jobs are likely to be created or sustained by the project.

As a result of the size and complexity of the programme, BAE SYSTEMS, approach
throughout the competition has been based on collaboration with key partners in UK and US industry. BAE SYSTEMS welcomes Thales as a key supplier, who will bring many strengths to the programme. The approach the MOD is taking in the next stage will capitalise on the significant work done thus far in the competition by both teams.

BAE SYSTEMS, Thales and the MOD will now engage in discussions to determine the
detail for the structure of the proposed alliance. In parallel, that team will
ensure that critical elements of the design work continue to mov

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