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BAE Systems secures £2.4bn munitions contract
BAE Systems has been awarded a new 15-year contract for the supply of munitions to the UK Ministry of Defence. The contract, worth £2.4bn, will sustain approximately 4,000 jobs across the UK.
This new agreement, which will supersede the current contract due to conclude at the end of 2022, will guarantee the delivery of munitions products and engineering support to the UK armed forces.
The agreement enables BAE Systems to invest £70m on the refurbishment and upgrade of manufacturing lines, with 75% of this value being invested by 2026. The company will also spend up to £350m with UK-based companies on raw materials and machine components.
BAE Systems directly employs 1,260 people who are involved in either munitions manufacturing or test and evaluation at five sites across the UK; Glascoed in Monmouthshire, Radway Green in Cheshire, Washington in Tyne & Wear, Bishopton near Glasgow, and Ridsdale in Northumberland.
It is anticipated that the contract will also help sustain a further 1,500 jobs in the UK supply chain and support a further 1,300 jobs induced by consumer spending in economies local to sites.
Charles Woodburn, chief executive, BAE Systems, said: “This contract secures the future of a highly technical and critical industry which supports thousands of manufacturing jobs in several areas throughout the UK. By investing in new technology and skills to further develop our expertise, we can continue to deliver essential sovereign capability to the Armed Forces at competitive prices.”
Defence minister, Jeremy Quin, added: “This vital multi-billion pound contract will provide our service men and women with fire power on the front line for years to come whilst investing in British industry, British jobs and British infrastructure. Defence underpins hundreds of thousands of jobs across all four corners of the nation, and ongoing investment is crucial as we work together to build back better and stronger from the Covid-19 pandemic.”
The contract, called the ‘Next Generation Munitions Solution’ (NGMS), is due to commence in January 2023 and will succeed the current ‘Munitions Acquisition, the Supply Solution’ (MASS) contract, which commenced in 2008. It represents the enduring partnership between BAE Systems and the UK armed forces, particularly the British Army.