Contingent Liability: Case Telescoped Cannon and Ammunition Contract

Monday 8th July 2019 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Stuart Andrew)]

I am today laying before the House a departmental minute to advise that the Ministry of Defence (MOD) has received approval from Her Majesty’s Treasury to recognise a contingent liability associated with the design authority support for case telescoped cannon and ammunition (CTCA) contract extension.

The departmental minute describes the continued contingent liability that the MOD will incur as a result of signing an amendment to the CTCA contract. This amendment extends the exclusion to the contractor’s liability for indirect and consequential losses until March 2021. Due to the value of the contract it is not acceptable for the industry participants to incur such a risk, the value of which cannot be quantified.

For completeness, in addition to the clause outlined above, the contract contains a limitation of liability against contractor’s personnel at Government establishments and an overall limitation of liability linked to the value of the contract (£4.8 million). After completing a robust risk assessment these have been found not to create any further contingent liabilities.

[HCWS1697]