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CVF CARRIER AWARD MAY BE SPLIT BETWEEN BAE AND THALES

23 Jan 03. As we discussed in BATTLESPACE UPDATE Vol.4 ISSUE 48, December 2nd 2002, one possible solution for CVF, the UK carrier requirement, could be to split the contract between BAE SYSTEMS and Thales to share the £2.9bn contract to build two aircraft carriers. Should this be the case, the French carrier could also form part of the whole requirement. Following a cabinet meeting today, the outcome is expected towards the end of next week. BAE insists that it is the right company for the job although industry sources suggest that the recent Thales presentation to the Parliamentary maritime Committee was streets ahead of BAE. BAE seem to see this a as given contract and overlook the fact that it is not only Astute and Nimrod which cause concern, the LPDs and Malaysian frigates were delivered well behind schedule. The technical solution offered by Thales is also believed to have been selected by the DPA and the recommendation made to the MoD.

The proposal, one of several possible outcomes, would allow the government to avoid a controversial choice between the bidders.

Unless properly managed, this could be a cumbersome and legal minefield to work through. The government would need to appoint a Manager or Lead Systems Integrator for the project and some sources suggest that the DPA itself could run this contract reversing all prime contractor policy. A more likely outcome would be, should it lose, for BAE to take a major subcontract over the metalwork and some system design and supply. The technical knowledge of the F-35 JSF is vital to the success of CVF and BAE SYSTEMS, having a large stake in the project is privy to certain technical data which it is believed has not been made open for Thales, having said that Thales Team member Lockheed Martin would also be able to provide this. This would not suit EUROSYSTEMS which is hoping to win the important combat system requirement in order to establish its naval systems business for the next twenty years.

Whitehall insiders said a give-and-take solution was being considered in an attempt to champion the national interest while also avoiding cost overruns.
One official said: “Why not give it to them both? It’s very third way. The idea is to make it less painful by spreading the contract.” Several proposals are still under consideration, and no decision has been made on the contract to build the two 60,000-tonne vessels, which the Royal Navy wants to enter service in 2012 and 2015.

Under the latest idea the two companies would each share the risk and reward. One could be appointed a prime contractor, with the other a supplier. Or the government could create a wider alliance between Thales and BAE Systems by specifying the roles each would have in delivering the contract.

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