Babcock IG Signs Long-Term Business Arrangement With UK MoD

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CVF Upper Bow(click to view full) Babcock International Group already has a wide range of agreements with the British Royal Navy, including shipbuilding work on vessels that include the new Queen Elizabeth Class aircraft carriers, refit work for ships like HMS Ocean, and a 10-year contract to support Britain’s nuclear submarine fleets. In late March 2010, they added to that portfolio with a “long term strategic Terms of Business Agreement” with the UK’s Ministry of Defence (MoD), per Britain’s Defence Industrial Strategy. The agreement confirms Babcock as the MoD’s key overall support partner in the maritime sector from 2010-2025. During that period, Babcock will undertake specific roles and to perform particular types of engineering work as requested, in support of the Royal Navy’s major warships and nuclear-powered submarines, while extending Babcock’s management roles at the Clyde and Devonport Naval Bases from 2013-2025. In return for a “forward work program” of about GBP 2.5 billion (currently $3.8 billion) that’s reliable enough to be entered on corporate financial accounts, Babcock commits to meet performance targets, and deliver about 15% guaranteed cost savings to the MoD. Savings above the committed levels will be shared between Babcock and the MoD. Babcock release [PDF].

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