Astute Class Submarine: BAE Contract Negotiations
House of Lords

Lord Bach (Parliamentary Under-Secretary, Ministry of Defence; Labour)

I announced on 19 February 2003 (Official Report, cols. WA175-177) that the Government had reached an agreement with BAE Systems on the way ahead for the Astute Class Attack Submarine project. However, at that point, it was accepted that some additional time would be required to establish the underpinning commercial arrangements and I undertook to report back to the House at a suitable moment. I am very pleased to be able to announce that on 17 December, an amended contract implementing the February Agreement was signed by the Ministry of Defence and BAE systems.

This amended contract, which covers the design and construction of the first three boats, is designed to reduce risk while incentivising the company to improve its performance in delivering the programme. It also covers a number of project management improvements and oversight.

Considerable progress has already been made in introducing these improvements and the MoD will be looking to the company to build on this as we jointly restore confidence in the programme. In February, we announced that the ISD for the first of class would be delayed. The company is now formally working to deliver "HMS Astute" in 2008.