BABCOCK, the UK engineering firm which manages naval bases at Devonport and Clyde, has been awarded a contract worth £2.6bn by the Ministry of Defence (MoD).
Meanwhile, BAE Systems, which manages Portsmouth Naval Base, has struck a £600m deal. Both new contracts will run until 2019.
The MoD said the new arrangement, which brought five existing contracts under one framework, “represents excellent value for money for MoD and the UK taxpayer, with over £350 million of savings secured”.
The new contracts will see the two engineering firms deliver a range of support services to ships, including technical services, maintenance, repair and upgrades and defence secretary Michael Fallon said the investment secured more than 7,500 jobs.
He added: “Following the £3.5 billion Scout armoured vehicle contract, this is the second biggest defence contract placed by this government and reflects our commitment to giving our armed forces what they need to keep Britain safe.
“I know how important naval bases are for the local economies so I am delighted that these contracts have been awarded.”
Bernard Gray, the MoD’s Chief of Defence Materiel, said the contracts demonstrated that the Ministry was committed to “finding both the right deal for the armed forces and driving down costs”.
He added: “The three naval bases in the UK play a vital role in the defence of this country and in the economic well-being of the regions in which they are located.”
John Hudson, managing director, maritime at BAE Systems, said: “This is an exciting time for everyone at the naval base.
“This supports the Royal Navy’s operational capability and will deliver further savings for taxpayers.”
Britain last month awarded its biggest contract since at least 2010 when it placed a £3.5 bn order with General Dynamics for new armoured vehicles.