Re Agreement

RNS Number : 0430W

BAE SYSTEMS PLC

21 July 2009

 



BAE Systems - 15 year MoD agreement 

    21 July 2009

BVT Surface Fleet, the maritime joint venture between BAE Systems and VT Group, has today signed a legally binding 15 year Terms of Business Agreement (ToBA) with the UK Ministry of Defence that will reduce the cost of warship building and support for the Royal Navy, secure the long-term sustainable future of the UK warship building industry and deliver efficiency savings for the UK taxpayer.

Signed between the MOD, BVT, BAE Systems and VT Group, the agreement provides:

• a minimum of 15 years exclusivity to BVT for the design, build, integration and aspects of support on specified MOD shipbuilding programmes, including the Future Surface Combatant 

• a commitment to maintain key industrial capabilities, as outlined by the Government's Defence Industrial Strategy

• a contractual guarantee to deliver £350m of financial benefits to the MoD over the duration of the contract

• an incentive mechanism for achieving savings and key transformation milestones

Through the ToBA, the MOD and BVT will transform the delivery of shipbuilding and support to the Royal Navy on a through-life basis, delivering significantly enhanced value for money for the taxpayer and increased shareholder value through improved efficiency and effectiveness.

Issued by:

BAE Systems plc
London

 

END

 

 

AGRFGGZNDMRGLZM