The £1.5bn competition to build up to three Fleet Solid Support Ships for the Royal Navy has been suspended, say the Ministry of Defence.
It is understood that Defence Secretary Ben Wallace halted the competitive tendering process because bidders were “not compliant” with cost.
Competing for the work was a British consortium consisting of companies Babcock, BAE Systems, Cammell Laird and Rolls-Royce (forming Team UK) and international bidders Fincantieri (Italy), Navantia (Spain), Japan Marine United Corporation, and Daewoo Shipbuilding and Marine Engineering (South Korea).
Fincantieri and Daewoo Shipbuilding and Marine Engineering had already withdrawn, according to the Financial Times. This left only Team UK, Navantia and Japan Marine United Corporation.
The Ministry of Defence said in a statement:
“It is clear that the current approach will not deliver the requirement. We are now considering the most appropriate way forward for the procurement project.”
It has also been reported that some regard the suspension as a first step to reclassifying the vessels to be exempt from EU laws, allowing them to be built in the UK rather than overseas.
During a debate last year on UK sovereign capability, All-Party Parliamentary Group for Shipbuilding & Ship Repair Vice-Chair Paul Sweeney pointed out that despite claims to the contrary from some corners, the UK was well within its rights to protect the Fleet Solid Support Ships tendering process from international competition, something the National Shipbuilding Strategy did not address when published:
“In the context of major shipyard closures and significant downsizing, whether that is at Rosyth or Appledore, it is bizarre that the Government are quite happy to tender contracts overseas in international open competition. Under article 346 of the treaty on the functioning of the European Union, the Government could quite easily designate the industry as UK protected. It is entirely at their discretion. Any notion that their hands are tied is bogus. They could do that, smooth the production cycles and build a firm and stable footprint for UK shipyards, which would enable them to get match fit and then go out into the world and compete effectively for other orders. That is exactly what they do in Italy with Fincantieri, and what they do in France with DCNS. It is exactly what happens in Germany.
I do not understand why other European Union member states can achieve the same objectives much more effectively than us, but we are so holier than thou that it hurts when it comes to the zealous application of these EU rules and we seem to undermine our own industrial base and our prosperity as a result, meaning that communities are broken and skills are lost. Ultimately, we undermine our objective of building a more resilient and effective industrial base to serve our defence industry and, potentially, commercial spin-offs.”
The National Shipbuilding Strategy itself was informed by Sir John Parker’s 2017 report that set out how the Government should pursue shipbuilding efforts in a way that best suits the UK, however, in a recently released review of the implementation of the Government’s National Shipbuilding Strategy, Sir John Parker advised that the Fleet Solid Support Ships and other classes of vessels should be protected against international tendering:
“A wider range of ship classes should be procured via UK-only competition. This will drive volume into the industry, supporting efficiency and sustainability of a competitive bidding capability.”
With a general election set for the 12th of December, it is unlikely that the competition will be revived this year.