Select Committee on Defence Minutes of Evidence


Examination of Witnesses (Questions 280 - 285)

WEDNESDAY 7 FEBRUARY 2001

RT HON GEOFFREY HOON MP, MR KEVIN TEBBIT CMG, AND MR RICHARD HATFIELD CBE

  280. Once you have let the contract to the prime contractor, what influence can you bring to bear to ensure that the prime contractor conveys into reality your sentiments?
  (Mr Hoon) Because we are working with the prime contractor, who in turn is working with Vosper

1  See p. 44.

 Thornycroft, to develop a design that is sufficiently robust then to allow for sensible pricing arrangements to be agreed on the remainder of the Type-45s.

  281. Is it not somewhat bizarre that the prime contractor then submits a bid over and above, knowing of your intention to split this work, to build all 12 ships himself?
  (Mr Hoon) We are looking carefully at the unsolicited bid that we received from BAE Systems Marine. It is being evaluated. Obviously with any proposal that offers value for money to the taxpayer we have to consider it carefully. It has not in any way changed our central strategy, which is to ensure that there is competition and that competition must mean that we have more than one company able to build Type-45s. Nothing has changed in our policy.

  282. Have you met with BAE Systems to convey to them your strongly held view that they should still be looking to share that work since that prime contract has been let?
  (Mr Hoon) I have certainly had conversations with leading members of BAE Systems where that view has been very firmly emphasised to them.

Chairman

  283. Could Vosper Thornycroft put in an unsolicited bid to build all 12?
  (Mr Hoon) They could and we would obviously look at that carefully as well. One of the things that appears to have been overlooked in some of the comments I have seen is that Vosper Thornycroft are very heavily engaged with BAE Systems in the design stage. A joint team is working to develop a design that then will form the basis for the construction of the Type-45s.

  Chairman: So if I was living in the Portsmouth area—

Mr Hancock

  284. That is a rather strange comment bearing in mind that they were not, in fact, consulted about the unsolicited bid to build all 12 ships.
  (Mr Hoon) It is not for me to comment on an offer by a private sector company. We will evaluate that offer. All I am saying to you as a matter of fact is there are employees of Vosper Thornycroft working on the design of the Type-45.

Chairman

  285. If I was living in the Portsmouth area then I should not be too exercised by the adverse publicity that somehow all is going to be pinched away from Vosper Thornycroft?
  (Mr Hoon) There is no change in Government policy.

  Chairman: Thank you all very much for coming along, it has been a very interesting session. We will, of course, be seeing you shortly when you come and talk about European Security. Thank you.


 
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