UK’s defense procurement minister Guto Bebb on March 6 informed MPs that the UK defense ministry received the treasury approval to award a construction contract for the Royal Navy’s seventh Astute-class submarine.
Negotiations are still ongoing, it was noted, and the new contingent liabilities associated with the Astute boat 7 “whole boat” contract will come into force on signature of the contract.
“The departmental minute describes the contingent liability that the MOD will hold as a result of placing the Astute boat 7 “whole boat” contract, which will provide for the production and testing of the vessel,” Guto Bebb said in a written statement.
“Within the boat 7 contract, BAE Systems Marine Ltd limit their exposure to product liability to £1 billion per incident and £300 million in any 12-month period. This limits the contractor’s exposure for claims by the MOD for losses associated with the product being defective or deficient, and creates an exposure for MOD to third party claims against the contractor for losses associated with the product being defective or deficient. It is the view of the Department that the likelihood of any claim is remote.”
The news was welcomed by the Barrow and Furness MP John Woodcock who expressed relief after reports of pressures to scrap construction of boat 7 altogether. A Sunday Express report on the possible cancellation of the seventh boat in the class was based on a confidential document leaked earlier this year.
Great news – MoD announces contract for seventh Astute-class will finally be made! Big relief for Navy and for build programme, credit to ministers for fending off Treasury pressure to cancel. pic.twitter.com/0zwIayXKQD
— John Woodcock (@JWoodcockMP) March 6, 2018
A £1.4 billion contract for the construction of boat six was awarded by the MoD to BAE Systems in April, 2017.
HMS Astute, Ambush and Artful are already in service while the fourth boat, the future HMS Audacious, recently completed its first dive.