Maritime Support Delivery Framework Contracts

Monday 13th October 2014 Written Statements

[The Secretary of State for Defence (Michael Fallon)]

I am notifying the House that the Ministry of Defence has awarded two contracts to support the management of the UK’s naval bases and maintain and repair the Royal Navy’s warships. These contracts, which have a combined value of £3.2 billion, represent a new approach to contracting for support services at the naval bases, known as the maritime support delivery framework (MSDF).

Contracts have been awarded to both our industrial partners at the naval bases. The contract awarded to Babcock, to provide support services at Her Majesty’s naval bases (HMNB) at Devonport and Clyde, is valued at £2.6 billion, while BAE Systems has been awarded a contract worth £600 million to provide support services at HMNB Portsmouth.

The Babcock MSDF contract is for five and a half years, running from 1 October 2014 to 31 March 2020. The BAE Systems MSDF contract is for four and a half years initially, also running from 1 October 2014, with an option to extend it for an additional year. These contracts replace the three warship support modernisation initiative contracts as well as ship services contracts with BAE Systems and Babcock, plus a number of support-based contracts with Babcock for engineering services.

The MSDF contracts will sustain around 7,500 jobs across the three naval bases, with 1,500 of these jobs at HMNB Clyde, up to 4,000 at Devonport and more than 2,000 at HMNB Portsmouth.

MSDF is a modern commercial and financial strategy replacing existing contracts with one wider contracting framework to incentivise industry to transform and rationalise to meet the needs of the Royal Navy.

By bringing the provision of naval base support services and ship services contracts under MSDF, the MOD is able to deliver a saving of some £350 million, drive continuous performance improvement and thereby provide a better deal for defence and the taxpayer.