A major trade union has urged the government to intervene in the Defence Maritime Services replacement programme after a £200 million contract for Royal Navy support vessels was awarded to Dutch shipbuilder Damen, the UK Defence Journal understands.
In a letter sent to Defence Secretary John Healey and Scotland Secretary Douglas Alexander, GMB Scotland said the decision to allow construction of a 24-vessel workboat fleet outside the UK exposed serious weaknesses in defence procurement oversight and industrial strategy. The union argues that UK shipyards were not invited to bid for the work, despite the vessels supporting naval bases at Clyde, Devonport and Portsmouth.
According to the letter, the contract structure under the DMS In Port Services arrangement allowed prime contractor Serco to select an overseas yard without engaging UK industry or trade unions. GMB Scotland described this as “a stark illustration of a procurement system needlessly allowing the off-shoring of contracts without supervision or strategic consideration”.
The union said the programme, which includes tugs, pilot boats and crane barges, could have been delivered by several UK yards. It argued that awarding the work overseas “contradicts both the spirit and stated objectives of the National Shipbuilding Strategy”, which commits government to maximising UK shipbuilding opportunities and sustaining sovereign capability.
GMB Scotland also raised concerns about governance, stating it was troubling that ministers were reported to have been “blindsided” by the decision. The letter added that ongoing criminal investigations involving Damen, including alleged breaches of Russian sanctions, bribery and money laundering, heightened reputational and operational risks, even if monitoring assurances were in place.
The union highlighted the impact on the Clyde, pointing in particular to Ferguson Marine in Port Glasgow. It said the yard faced an uncertain workload as existing projects conclude, warning of risks to jobs, skills retention and apprenticeships. According to GMB Scotland, the DMS vessels “could and should have provided valuable short-term infill contracts at Ferguson Marine and other UK yards”.
The letter calls on ministers to review the procurement structure, secure UK build or substantial UK workshare through subcontracting, strengthen ministerial oversight of major defence service contracts, and reaffirm commitment to the National Shipbuilding Strategy within a properly resourced industrial strategy.
Scottish Labour MSP Paul Sweeney, who has previously raised the issue with ministers and unions, said the award ran counter to stated policy aims. He said: “When Dutch firm Damen was directly awarded this contract for the 24 workboats by Serco back in September I was astonished, as it runs completely contrary to the National Shipbuilding Strategy core objective to promote greater UK supply chain content.”
Sweeney added that the timing was particularly damaging for domestic yards. “It comes at a crunch point when British shipbuilders like Ferguson Marine desperately need this kind of work on smaller vessels to keep their workforce gainfully employed,” he said.
Calling for ministerial intervention, Sweeney argued that the contract should now be revisited. He said: “A design licence and subcontract should now be negotiated for the production of these naval dockyard support vessels to take place at Ferguson Marine, which is in critical need of new projects in 2026.” He pointed to the renegotiated Mersey Ferry programme as a precedent, where overseas involvement was replaced with full UK construction.
Pointless posturing.
If the contract is awarded the only way out of it is to buy it out. You can’t cancel a legitimately entered into Co tract without compensation
I personally don’t understand way anyone would enter into a contract with Damen, it’s a lot of problems and is at risk of imminent collapse as well as a good record of screwing up and being unlawful..it’s facing significant troubles, including an ongoing criminal trial in the Netherlands for bribery, fraud, and violating Russia sanctions, plus reports of severe financial strain from project delays especially around the German frigates.. if that goes the wrong way Damen will be bust and its creditors ( including this contract) will be picking over the bones to get some money back..
It was a foolish move and if via legal routes it can be got out of it should.. because Damen are probably going down the toilet.
Serco have a rep for shoddy and dodgy. They’ve greased many palms on their journey, but fail to deliver anything like a good product
They lost out, get over it, will more to it than most see, cost, build time etc. and likely value for money most stuff built here is late, not up to spec and over budget.
How could they lose out if they were never given the chance to put in a bid. Small boats is something that UK yards do well building. Also it kind of smells fishy as Serco and Damen have a history of this kind of thing, with the last large order going to them as well.
May be a reason why they were not given the chance? over cost, slow work, items not up standard late delivery. Sadly its the norm with kit built here, poor standards are a by word for any the military buy from the UK.
I want all kit and money spent here but if the MOD can get done cheaper/better and on time some where else then they should. Bound to up set a few with that but its tax payers money and the MOD/Navy need kit that works on time on budget and UK industry is not very good at that.
Ajax, Warrior up grade, C3 up grade, Both Aircraft Carriers, the Type 45 D, all over due/over budget, or not working as they should when finally delivered. . Boxer a super slow build rate etc etc,
In fairness the Warrior upgrade was never seriously considered. The actions of DSG and Babcock in failing to carry out the Base overhaul and spares supply according to the AESP . This resulted in serious failures meaning Warrior was barred from public roads and millions were spent unnecessarily on replacement gears, when the failures were actually due to 1/ shoddy bearings, 2/ failure to measure apertures meaning bearings could fall out, 3/ paired seals being split and stored incorrectly resulting in leakage.
That sounds like an issue the badly stored c2 hulls that are now useless. I bet no one gets held to account over that either. A recold of shoddy work that is killing industy but with only them selves to blame. Ajax is again down shoddy work etc,
If i ran the Mod i’d not be keen on buying things built here for the Army they are for ever a drama and a money pit. Saying that GD are not a good role model are they useless it seems at any thing.
All these mess up with vehicles/ships etc and no one in charge has ever been punished that is part of the problem, weak leadership and cover ups.
How ever back to the small boats, is there ever space to get them built in the UK or would be join the back of the que?
Only a real as**ole would point to Ferguson Marine and say we should build 24 tugs there? They don’t make tugs.
Some of the people these organisations as so low bar is easy to see why they are in such a mess.
Every bit of shipyard capacity in this country including Ferguson marine is being taken up by warship production.
We can buy low end vessels like tugs and Ferries from abroad and focus on what we are good at like frigates and nuclear attack submarines.
I wonder if someone like AEUK, who delivered the RN’s own workboats, had been picked, would GMB Scotland have complained that it went to an English yard rather than a Scottish one?
No but only an idiot would hand Damen a 200 million contract.. it’s very likely to go down the toilet very soon.
Serco have been buying new boats from Damen ever since they took over fully running the RMAS service in 2009 and nothing has gone wrong up to now
Yep but in 2009 Damen were not utterly screwed, in court for criminal activity that if found guilty will probably finish it. and about to get hammered with contract failure by germany that would also finish it of Germany pulls the frigate contract, a yard that needed an emergency bail out by of 270 million euros this autumn to keep the lights on… yep no trouble at
I think most of the Serco work was done in Daman yard in Poland , worse case I expect it will be rescued
I agree with you if Ferguson’s have capacity there are perhaps eight or nine type 26 frigates which need the part or parts Ferguson are good at building. It appears that they did a good job on the part they already built.
I’m more concerned about the lack of news since the Norwegian order was placed about how BAE are going to increase througput in fitting out.
Extending a third dock at Scotstoun is one option but there are others. i would have thought BAE would have known their options prior to bidding and would have put their chosen option into action by now.
Increasing throughput of the Janet Harvey Hall will be relatively easy just by building larger blocks externally so there are fewer parts to join together and so it can be done more quickly.
Modern measuring systems and computers mean that there is no longer a need to cut bits off and add bits in when two blocks are aligned as might have happened in the past.
I remember seeing a film about an American nuclear aircraft carrier where both blocks were over built, lined up and then cut back to a constant gap and then put together before welding up. It looked quite a long process.
This does point to a weakness in the MoD and Government’s contracting arrangements. If UK companies benefiting from the Shipbuilding and Industrial Strategies then fail to pass on those benefits to other UK enterprises, i.e. maximise the benefits for themselves, then it rather undermines the whole strategy. I don’t like Trump or his methods but his recent warning to the US MIC executives about their bonuses whilst delivering late and over budget is justified and a tough ‘tow the line or else’ message that I kind of agree with. I think HMG should at least ensure the all contracts have standard clauses that ensure that the Shipbuilding and Industrial Strategies are followed, otherwise what’s the b****y point of a strategy!
Cheers CR
Completely agree.
It’s nothing to do with the government. Serco provide a service, they are entirely free to buy their ships from who they like.
That’s my point Ron,
The contract with SERCO should have had a clause or clauses ensuring that any new kit procurement was inline with the shipbuilding and industrial strategies. It would be an entirely reasonable thing to do and it would have been up to any potential bidders to decide if they would bid or not. I think it is entirely right that the UK Government should contract to maximise the benefits to the UK economy and the fact that they have not been explicit in this is an oversight to say the least.
Cheers CR
Not going to happen.
Virtue signalling by the GMB.
Make a deal, stick with it. If you don’t, costs more in the end and delivery dates slip. Also, don’t start changing the spec. Again, costs go up and delivery dates slip. It’s one thing to give preferential treatment to local firms. If you take in the benefits of the taxes the company and employees pay when completing the contract – plus not having to pay a lot of laid off employees – giving work to a UK yard should always be best. They have quite a cost advantage in real terms. But if it still works out cheaper to go abroad… sometimes it’s best to go abroad.
This May sort itself out anyway, if there is one shipbuilder in Europe that is most likely to go broke and end up breaking contract it’s Damen.. presently being prosecuted for fraud, corruption, bribery, breaking sanctions against Russia, has a massive cash flow issue.. and if the German government any say is probably going to stripped of the only contract keeping it afloat, contract it has failed to deliver on and is in breach of.
Begs the question why SERCO would even consider Damen..? I wouldn’t be at all surprised if there wasn’t potential for another criminal investigation here. SERCO must be aware of the situation at Damen so why apparently give them preferential treatment..?
This doesn’t feel right to me, given the political risks in the UK, the shaky condition of the supplier cash flow and the corruption charges, if it was me I wouldn’t touch them with a barge pole. At very least we should be asking serious questions about the competence of the SERCO management team, it is ultimately UK tax payer money being put at risk…
Cheers CR
Hi Jonathan,
Have you seen the “New atlas urges sea power focus to make UK ‘pivotal power’ ” that George has just put up under the SEA link?
Looks pretty interesting and I have just downloaded the source document to read. Royal Navy has a hand in it so bound to be ‘biased’ to a point, but…
Cheers CR
The Council on Geostrategy claims to have “a mission to strengthen Britain and re-assert our leadership in an increasingly uncertain and dangerous world.” So the RN isn’t the only one who is biased towards the country.
Hi Jon,
I was actually thinking in terms of the three services, but I take your point. So far it is an interesting read.
Cheers CR
This is yet another example of the appalling state of UK defence procurement! So ‘prime contractor’ Serco selected an overseas yard without engaging with UK industry?
Evidence as if it were ever needed, that the UK government has added additional layers within the procurement process, allowing more greedy contractors to stick their noses in the ‘defence budget trough’? It’s just same ol same old greed and corruption, that has been plaguing the MOD for decades.
With this particular example, what is the government paying serco for? Serco are not building anything. serco are merely acting as a conduit and obviously getting a fee for it. serco then give out the contract, to whoever provides the best deal for… serco!
No doubt serco will say the contract was given to the most competitive (cheapest) shipyard. However, when you add serco’s ‘fee’ to that ‘competitive tender’, it would probably amount to the same figure, that a British yard would have charged.
So they no longer even bother to try and cover this corruption up. Absolutely shocking and disgraceful!
I agree with you if Ferguson’s have capacity there are perhaps eight or nine type 26 frigates which need the part or parts Ferguson are good at building. It appears that they did a good job on the part they already built.
I’m more concerned about the lack of news since the Norwegian order was placed about how BAE are going to increase througput in fitting out.
Extending a third dock at Scotstoun is one option but there are others. i would have thought BAE would have known their options prior to bidding and would have put their chosen option into action by now.
Increasing throughput of the Janet Harvey Hall will be relatively easy just by building larger blocks externally so there are fewer parts to join together and so it can be done more quickly.
Modern measuring systems and computers mean that there is no longer a need to cut bits off and add bits in when two blocks are aligned as might have happened in the past.
I remember seeing a film about an American nuclear aircraft carrier where both blocks were over built, lined up and then cut back to a constant gap and then put together before welding up. It looked quite a long process.
There is a problem with the web site. I wrote a reply to a post and sent it.
On checking it wasn’t showing but was still in the part where you write. So I sent again and it has now appeared both as a reply and a separate post.
This is a contract between two private companies. There’s no power to review or change the contract by the government. The union is being deliberately disingenuous.