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BAE Systems has secured a new 15-year contract for the supply of munitions to the UK Ministry of Defence (MOD). The contract, worth £2.4 billion ($4.3 billion), which will sustain approximately 4,000 jobs across the UK.
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The Next Generation Munitions Solution (NGMS) will see BAE Systems manufacture 39 different munitions for the Royal Navy, Army, Royal Air Force and Strategic Command to use on the front line, including small arms ammunition, mortars, medium-calibre gun rounds and large-calibre artillery and tank shells.
An estimated 1,260 people will work on NGMS in engineering, operations and supporting roles across five BAE Systems UK sites, including:
- 555 jobs - Glascoed, South Wales
- 320 jobs - Radway Green, Cheshire
- 340 jobs - Washington, Tyne & Wear
- 30 jobs - Bishopton near Glasgow
- 15 jobs - Ridsdale, Northumberland
A further 1,500 roles will be supported along the supply chain alongside 1,300 jobs as a result of consumer spending in local economies.
Defence Minister Jeremy Quin said, “This vital multibillion-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.”
Replacing the current MASS (Munitions Acquisition, the Supply Solution) single-source contract from January 2023, the NGMS will deliver about 50 per cent, by value, of the MOD’s total general munitions (GM) portfolio and will maximise military capability and reduce cost.
Charles Woodburn, chief executive of BAE Systems, added, “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.”
The new contract will offer better value for money as it includes incentives for BAE Systems to make savings over the life of the contract.
Ed Cutts, DE&S director weapons, said, “This new, improved contract with BAE Systems secures the supply of cutting-edge key munitions for the front line while delivering even greater value for money for the taxpayer.”
In its bid, BAE Systems identified about £400 million ($725 million) of savings and efficiency opportunities to be pursued up to 2038 to meet this challenge. The contract also includes flexibility to vary the volume of orders and allow GM products to be added or removed, depending on front-line requirements.
“We look forward to continuing our collaboration with BAE Systems to deliver on the opportunities this partnership and agreement present,” Cutts added.
As it delivers the munitions, BAE Systems forecasts it will spend £350 million ($634.8 million) with UK-based companies on raw materials and machine components.
It pledges to invest more than £70 million ($126.9 million) refurbishing and upgrading manufacturing lines, including £32 million ($58 million) at Glascoed, £27 million ($48.9 million) at Washington and £12 million ($21.76 million) at Radway Green.
The company will also invest in the next generation by recruiting over 200 apprentices and graduates during the course of the contract.
