Contingent Liability

Stuart Andrew Excerpts

Friday 23rd November 2018 Written Statements

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

I am today laying a departmental minute to advise that the Ministry of Defence (MOD) has received approval from Her Majesty’s Treasury (HMT) to recognise a revised contingent liability associated with an Apache integrated operational support contract amendment.

The departmental minute describes the revised contingent liability that the MOD will hold as a result of signing a contract amendment to the Apache integrated operational support contract. This amendment extends the support to the Apache helicopter fleet from 2019 until 2024 and covers the third and final pricing period for the contract. Due to the Apache AH-64E coming into service in 2024 and the need to manage obsolescence issues on the current Mk1 helicopter to ensure a smooth transition for pilots and engineers, the out of service date for the Apache Mk1 has been advanced to 2024. This amendment revises the support contract accordingly.

The maximum contingent liability against the MOD for damage at Government premises caused by contractor’s staff is estimated at £18,750,000 and the MOD has an additional exposure value of £2,000,000 for use of the indemnity condition 15, ammunition and explosives.

The contingent liability will remain for the duration of the contract to 2024.

Further contingent liabilities for intellectual property rights (IPR) in software, third party IPR, aircraft flight and taxiing, aviation products, and protection against excessive profit and loss fall within MOD and Defence Equipment & Support delegations.

[HCWS1107]