Procurement: August 22, 2001


The British Royal Navy has revised its plans for production of a dozen Type-45 multi-mission destroyers. The original plan was to bid the ships in groups of three between British Aerospace Marine and Vosper Thornycroft. The low bidder would get to build two ships and the other bidder would get to build the third. While this sounded good, the government wanted the two shipyards to sign a risk-sharing agreement, and could not get the two companies to agree to terms. BAE Marine then submitted a secret proposal under which it would build all 12 ships and claimed this would save the government money. The government asked Rand Europe to study the situation, and it concurred that a single-source program would be more efficient. Under the revised deal, Vosper Thornycroft will build about 18% of each ship (comprising some upper deck modules that will be fitted into hulls built by BAE Marine). The British government has agreed to order the second batch of three ships immediately so that industry will know it has a market for six sets of equipment; this is expected to reduce costs.--Stephen V Cole


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