Ajax Payments

Monday 20th March 2023 Written Statements

[The Minister for Defence Procurement (Alex Chalk)]

I wish to provide a further update on the Ajax equipment project being delivered as part of the armoured cavalry programme.

The Ajax Platform

Ajax is part of our £41 billion investment in British Army equipment and support over the next decade, delivering critical modernisation to address the threats of today and the future. The Ajax programme will deliver 589 vehicles to the British Army made up of six variants, allowing the Army to operate in all weathers, 24 hours a day.

The range and capabilities of the sensors on the platform and the on-board software will deliver a step-change in the surveillance capability of the Army. Ajax will provide a world leading competitive advantage, from its suite of cutting-edge sensors, modular armour packs and its 40mm stabilised cannon.

Recovering the programme

The Ministry of Defence has openly acknowledged the problems previously faced by the Ajax programme. Alongside General Dynamics, the Ministry of Defence has successfully completed user validation trials to validate the design modifications that have addressed the noise and vibration concerns, allowing the commencement of programmed reliability growth trials on 31 January.

Reliability growth trials are a standard part of the acquisition process for military equipment of this nature. These trials stress test the durability of the vehicle’s platform and components through a series of battlefield missions that represent years of activity on the platform. Since starting, the AJAX, APOLLO, ATLAS and ARES variants have driven over 2,260 kilometres through different terrains, completing a variety of representative battlefield tasks such as operating across a range of speeds and terrains, firing weapon systems, using the vehicles’ systems and communications, and completing specialist tasks such as vehicle recoveries and repairs using the integrated crane. Reliability growth trials are progressing well. No fundamental design issues have arisen to date. These trials are part of a broader trials programme aimed at validating that contracted vehicle requirements are met.

The MOD has developed with General Dynamics a revised schedule for the delivery of vehicles that is, subject to contract amendment, robust, realistic and achievable. Revised key delivery milestones set a meaningful initial operating capability of a trained and deployable squadron. This is scheduled to be achieved between July and December 2025. Full operating capability will be met when the Army has trained and converted forces to the Ajax platform to deliver armoured cavalry capability to the deep reconnaissance strike brigade and its two armoured brigade combat teams. This is scheduled to be achieved between October 2028 and September 2029.

The ability to deliver against this new schedule has been extensively scrutinised and assured within the Department and externally. A recent review by the Infrastructure and Projects Authority concluded that the programme’s successful delivery is feasible, re-grading the Ajax programme from red to amber.

Resuming Contract Payments

The Ministry of Defence remains clear it will only accept vehicles that comply with General Dynamics’ contractual obligations. The Department has withheld payments for work completed and had not made a payment since December 2020. Given the satisfactory progress against the programme, the Department will resume payments this month, starting with a payment of £480 million. This is approximately half of what has been held back since December 2020. Restarting payments to General Dynamics reflects the fact that the programme continues to return to a firm footing and supports the delivery of the schedule to deliver operational capability. The payment will cascade to the UK-wide supply chain of more than 230 companies, reinforcing confidence that the programme is progressing and providing for more than 4,000 jobs, including hundreds in south Wales.

Future payments will be made against the new schedule and its milestones, conditional on the delivery of compliant and deployable Ajax vehicles and the continued progress of remaining trials activity. We have a robust firm price contract for the delivery of 589 vehicles, which will ensure that General Dynamics is incentivised to deliver against agreed outcomes. As such, the whole programme remains within its originally approved budget.

Learning Lessons

The Ajax programme is turning a corner, but this does not remove the need for the Department to identify and learn lessons. We have always been clear that we will not shy away from taking action to change the culture and processes across defence as necessary. We look forward to receiving the finalised report from Clive Sheldon KC on the Ajax Lessons Learned Review and publishing it as soon as practicable.

[HCWS652]