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The Secretary of State for Defence (Mr. Geoffrey Hoon): With permission, Mr. Speaker, I would like to make a statement on the Bowman communications programme.
This project will provide the armed forces with a modern, highly capable tactical combat radio communications system to replace Clansman. It will provide secure, reliable communications to our land forces and selected elements of the Royal Navy and Royal Air Force. In addition to voice communications, the system provides a tactical internet and automatic position location, navigation and reporting. Delivery will include more than 48,000 radios, 30,000 computers, conversion of more than 30,000 existing platforms and training for more than 100,000 members of the armed forces.
Until recently, the history of the Bowman project has been a saga of difficulties. The requirement for the system was originally endorsed as long ago as 1988, but the initial attempt at competition collapsed in 1996. The following year, in March 1997, it was decided to pursue a single source procurement with Archer Communications Systems Ltd.
Last summer, in the light of continuing major problems with the programme, the Government decided that the competition for the Bowman combat radio would have to be relaunched. That decision has now been vindicated. Over the past year, we have made impressive progress on the project. There has been a vigorous competition, with three strong bids submitted by Thales, TRW and CDC, a subsidiary of General Dynamics already operating in the United Kingdom. Following careful analysis of the bids, I am pleased to announce today that CDC has been selected as the Department's preferred supplier of the Bowman system.
We evaluated a wide range of issues. Given the project's chequered past and the continuing operational need, the priority has been to deliver a successful and low-risk solution that will fill this capability gap at the earliest possible opportunity: CDC offers just that. Its solution is the clear winner of the competition. It provides the best value-for-money solution, fully meeting our military requirements. I am confident that it will meet our demanding timetable for getting the system into service. It is based on experience of developing a proven system, and includes best-of-class radios and a very efficient approach to rolling out and supporting the equipment.
The Ministry of Defence and CDC will now work together on the programme to bring Bowman into service. We aim to be in a position to let a contract in late summer this year, to achieve an in-service date of early 2004. The contract is valued at about £1.8 billion. It will cover the supply of the Bowman system and the first five years of support up to the year 2009. It will use the ITT VHF radio sub-system and the Cogent cryptographic system.
CDC's solution provides employment opportunities in the UK in a broad range of system areas, including design, development, manufacture and project management.
Ninety per cent. of the work content of the CDC bid will be based in the UK—the highest proportion of any of the three bids. About 1,600 jobs will be secured across the UK, including 400 new high-technology and support posts at the company's headquarters, which CDC plans to establish in south Wales.The company has also earmarked south Wales for a new Army communications technology research and development centre, to be staffed by about 65 leading scientists. Other regions will benefit as well. We expect subcontract work to secure more than 100 jobs in Scotland, more than 300 jobs in south-west England and about 75 jobs in the south-east, centred on Hastings. Major United Kingdom subcontractors include Alvis and Westland.
This is excellent news for British industry, and not just in terms of job opportunities. The high-quality jobs that it brings will allow for the continuation of this country's defence communications capability. In particular, there will be significant technology transfer to the UK. The Ministry of Defence will hold appropriate intellectual property rights, available for use by other companies working on linked projects. Industry has committed itself to maintain a development and production facility as a UK concern. All this will mean that we will maintain a strong UK strategic capability.
This month will also see the first deliveries, ahead of schedule, of the personal role radios. This is a new capability, separated from the main Bowman requirement in 1999 to ensure early delivery to the front line. The radios will provide short-range communications for dismounted infantry, and will transform the way in which they are able to operate.
The progress that we have made, and this announcement today, draw a clear line under the problems of the past. They confirm that the Bowman programme is on track for success and show that our commitment to smart acquisition—to best practice—is delivering tangible results for the armed forces. Selection of the preferred supplier, just one year after we re-opened the competition, underlines our determination to deliver this battle-winning capability to our service men and women. Our armed forces can now look forward to receiving the most modern and integrated secure communications system available anywhere in the world.
I recognise that today's announcement will be a disappointment to the other two bidders. Thales and TRW have invested considerable time and effort in their respective solutions. Both submitted proposals that were substantially better than the one that we rejected last year. Their involvement has ensured a hard-fought and successful competition. As a result, their reputations as credible prime contractors will have been enhanced. I want to stress how much we have valued the significant Thales presence in the UK defence sector.
For this project, however, CDC offers the best solution to meet our military requirements to the right time scale. As I have outlined, it does so with an excellent package of work in the UK. I am confident that we have made the right decision both for the armed forces and for UK industry. I commend it to the House.
Mr. Keetch: The Liberal Democrats welcome the procurement of Bowman for the armed forces, coming as
it does after nine years. I thank the Secretary of the State for coming to the House. Although he said that he wanted to do so, it is a matter of fact that he wanted to make his answer in response to a written question and not as a statement.Is it true that a hastily convened press conference at the Ministry of Defence this morning had to be abandoned, and that press releases had to be taken back after news of your decision, Mr. Speaker, to grant my private notice question?
Will the Secretary of State tell the House why CDC clearly knew well in advance that it had won this contract? When I checked the company's website at 10 o'clock this morning, it was advertising jobs in Calgary, in Canada, to manage the prime contractor job—the posting had been placed on the website on 12 July. Does the right hon. Gentleman believe that such a complex project can be managed from Calgary?
Has CDC guaranteed that the Bowman contract will be delivered on time and to specification? What is the Government's assessment of job losses and job gains, not in Canada but in the United Kingdom? We certainly welcome the job gains, for example at Westland in Yeovil, but we want to know more about the quality of the jobs that will be created.
Is it true that there was an intervention by Lord Levene, who offered a factory in south Wales to employ former steel workers? Are those jobs being created at the expense of other high-quality jobs that will be lost throughout the United Kingdom? Are the rumours true that some kind of deal is being offered on the carrier projects as a sop to Thales?
Finally, if this means the end of secure military communications capability for the United Kingdom, what export orders can CDC of Canada look forward to as a result of today's announcement by the British Government?
Mr. Hoon: As usual, it is difficult to tell whether the Liberal Democrats are for or against any proposal. They have taken the full opportunity to criticise our proposals without indicating whether they are genuinely concerned about the quality and the quantity of the jobs that will be created.
I have dealt with all the hon. Gentleman's points about the quality and the quantity of jobs. In my statement, I pointed out that, of the three companies that made excellent offers to the Ministry of Defence, CDC proposed the largest proportion of jobs in the UK. I emphasise that the overriding need was to provide both value for money and the most secure system available in the right time scale for our armed forces. More than anything, that was why we chose the CDC offer, which built on the company's experience of supplying similar equipment that could be developed to the Canadian armed forces.
I can certainly assure the hon. Gentleman that CDC was not informed on 12 July, and that the matter has been pursued with all the appropriate means at our disposal so as to ensure full consultation.
Ms Claire Ward (Watford): Of course we welcome the decision for our own defence forces, but may I express disappointment on behalf of those of my constituents who are employed by Thales and will inevitably be concerned
about the future of their jobs? Such concerns for constituents are shared by other Members. What feedback will the unsuccessful bidders be given to ensure that they are able to look to the future for more British contracts?
Mr. Hoon: I am grateful to my hon. Friend. Obviously, there are losers when such important contracts are awarded. I made clear in my statement the importance that we attach to the contribution that Thales has made in the UK since its foundation. The company already has defence work worth about £2.7 billion. That is not to say that it is not eminently capable of winning far more work in future. The company is excellent and we very much value its presence in the UK—a point that I shall make directly to the company.
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