FRES competition heats up

This is going to be a tense week for several companies competing for the largest-ever peace-time military contract awarded by the U.K. Ministry of Defense (MoD). The contract is for the FRES (Future Rapid Effect System). The Times’s Dominic O’Connell writes that the deal will see the U.K. government spend up to £16 billion on 3,000 armored vehicles — medium-weight rather than main battle tanks — to replace Britain’s aging fleet. A further £60 billion will be spent on maintaining these vehicles during their service life. The sheer size of the contract has lured a host of top international contractors to compete, and the contest will reach a climax over the next few months. This coming Friday, the MoD was due to choose the winning vehicle from a short list of three — Piranha, made by General Dynamics of America; the Boxer, made by the German-Dutch consortium Artec; and the VBCI, made by Nexter (formerly Giat), which is owned by the French government — although a single winner may not now be picked. On the same day, companies vying for the “vehicle integrator” role — the complicated and expensive job of assembling the vehicle, fitting it out, and making sure it can work with all the other high-tech systems in the British forces — have to submit their bids. A winner will be announced in March.

BAE Systems, Britain’s biggest defense contractor — over the years it has swallowed up the entire domestic industry, including Alvis, Vickers, Marconi, and Royal Ordnance — is fighting hard to win a slice of the contract. It feels it must. BAE Systems’ own SEP vehicle was eliminated from the FRES finals, and you may recall that the company also lost the Systems of Systems Integrator role to a Boeing-Thales partnership, leading BAE Systems Land Systems managing director Andrew Davies to tell Defense News recently that the firm “must win the last piece of the FRES utility program — the integration-and-build contract — or consider shutting the Newcastle plant.” In acquiring all its domestic rivals, BAE has also acquired these companies’ relationships with MoD. This means that BAE maintains nearly all the armored vehicles in the British army’s current fleet. It has already missed once on FRES by having its SEP vehicle eliminated in the early rounds; if it misses out the second time — this time in it is bidding to be the vehicle integrator — it will face a difficult future, with a dwindling tail of work as the older vehicles are retired. Hence Davies’s gloomy prognostication.

BAE thus hopes to win regardless of which vehicle is chosen. “We are vehicle agnostic,” said Davies. It plans to win the contract to assemble and integrate the vehicles, installing complicated kit like the remote-controlled machine gun. “It is also vital that the new vehicles fit in with the existing fleet, and as we are already responsible for them, we think we are the ideal people to do the job,” he said. BAE will no doubt play the “jobs” and “British industry” cards. It has 600 engineers working on armored vehicles, with plants and offices at Leicester, Telford, Bristol, Shrivenham, Frimley, Hillen, Newcastle, Leeds, and Farnborough. About 7,000 British jobs would be sustained by FRES, the company said. BAE has already declared its team, announcing last week the members of its team for the vehicle-integrator role will include Cranfield University, GE, Qine-tiq, SAIC, and Selex.