Babcock International has won a £900 million contract from the UK Ministry of Defense to maintain the army’s land vehicles for 10 years.
The contract will transform the way the army’s vehicles are maintained, repaired and stored.
The contract is expected to grow up to about £2 billion as a result of plans, subject to value for money, to optimise a broader scope of services.
Babcock will deliver and transform the services currently provided to the army by the Defence Support Group (DSG) land business from April 2015
The £900 million contract will generate total savings to the army of around £500 million over the life of the contract, a saving of over a third.
The contract was awarded as part of the sale of DSG to Babcock for £140 million, which was announced in December last year.
“This contract is excellent news and puts DSG on a sustainable long-term footing to support maintenance and availability of land platforms for the army, in a similar manner to existing contracts for support of platforms for the other services” Minister for Defence Equipment, Support and Technology Philip Dunne said.
Babcock will provide DSG with key engineering and fleet management expertise, which it has built up over 15 years of working with the Army.
DSG will also gain the potential to provide vehicle maintenance to other existing heavy vehicle customers which it is unable to do while owned by the MOD.
“The contract will also ensure the Army’s continued access to improved vehicle repair and maintenance support – all at significantly better value for money for the taxpayer” Dunne added.
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