EUROPE
13 Nov 06. U.K. Nears String of Procurement Announcements. Major defense procurement deals in Britain have been scarce so far this year, but that could be about to change. The Ministry of Defence may be saving the best for last with a string of large contracts being lined up for announcement by year’s end. If the plans fall into place, orders for more than £38bn ($72bn) worth of equipment and services could be rolled out in the space of just four weeks. That’s nearly £8bn more than the Defence Ministry’s total budget for a year. Only last week, the ministry’s Investment Approvals Board (IAB) met to consider contracts to build two aircraft carriers for the Royal Navy, a deal likely to cost about £3.6bn. The second item on the agenda Nov. 9 was to choose the winner of the £10bn Military Flying Training System (MFTS) contract. The IAB also recently considered which of three competing companies should be appointed project integrator for the £2.5bn Military Afloat Reach and Sustainability (MARS) program to build a fleet of ships to support Navy operations. The outcome of the IAB considerations are unclear, but industry and government sources say Lord Drayson, defense procurement minister, hopes to roll out a string of big-ticket contracts before Parliament goes into recess on Dec. 19. That includes the CVF aircraft carrier program. Even though some contracts could be delayed, by the end of this month, Drayson could get his pre-Christmas order fest under way with the announcement of winning contractors for MARS and MFTS, and maybe others. The winner of the MFTS competition — in partnership with the ministry — will be responsible for all air crew training here for the next 25 years. It is Europe’s most ambitious military training scheme to date, and a top priority for the Royal Air Force, industry sources said. Ascent, the Lockheed Martin-VT Group consortium; Thales UK; and the Vector team of Bombardier, Kellogg Brown & Root (KBR) and Lear Siegler Services are competing for the MFTS contract, which will involve acquiring new platforms, training devices and infrastructure. The MARS effort has seen AMEC, KBR and Raytheon Systems working with the ministry’s Defence Procurement Agency during the first part of the assessment phase ahead of a decision to appoint one of the bidders as project integrator. An actual production decision is due in 2008, and the program may see an alliance of companies drawn together by the winning contractor to build the support ships. Other projects that may get announced in the coming weeks are a large unmanned aerial vehicle technology demonstrator program and a 10-year, £1.5bn Tornado strike aircraft support deal, known as the Availability Transformation: Tornado Aircraft Contract. These two efforts and the carrier project are being led by BAE Systems. Two large private finance initiatives (PFIs) — the Defence Training Rationalisation and the long-overdue Future Strategic Tanker Aircraft programs — also could get rolled out. Together with MFTS, which is a combination of PFI and partnering, the three programs are worth in excess of £30bn, although all of them will see spending spread over 25 years or more. For good measure, the ministry likely will unveil its acquisition strategy for the Army’s huge Future Rapid Effects System armored vehicle program before the parliamentary recess. Of course, it’s notoriously difficult to second-guess the Defence Ministry on the timing of contract announcements. The government approval process beyond the IAB often is subject to political factors and last-minute bargaining. For example, the Defence Training Rationalisation, which aims to transform the way the British military trains specialist personnel in sectors like engineering
and intelligence, has become politically charged over where the new training bases might be located. Large numbers of jobs are at stake. Also waiting in the wings is an upcoming decision on signing the memorandum of understanding with t