Babcock Receive Contract Extension from Ministry of Defence

Babcock PLC, the support services company, has announced that the Ministry of Defence has awarded Babcock Naval Services (BNS) a five and a half year extension to the partnering agreement at HM Naval Base Clyde. The contract extension is valued at circa £400 million and will extend the relationship between BNS and the MoD at HM Naval Base Clyde until 2013. The extension raises the total value of Babcock's order book to £1.6 billion.

The original partnering agreement came into effect in September 2002 and saw BNS take over responsibility for the provision of engineering support, facilities management and other specialist support services to the MoD and Royal Navy covering an initial five-year period through to August 2007. During the first two and a half years of this contract BNS has successfully reduced costs and improved service levels and it is this success that has resulted in the MoD opting to award an extension to the contract a year earlier than planned. The award of this extension to the contract brings the total value of the partnering agreement to circa £825 million.

Peter Rogers, Chief Executive of Babcock International Group PLC said: "This early extension is testimony to the performance of the Babcock team and the strength of the partnering relationship with the MoD."

Naval Base Commander at HM Naval Base Clyde, Commodore Carolyn Stait, RN, added:

"We are now fully committed to our future relationship with Babcock Naval Services who have shown in the last 2 years just how efficient and cost effective a MOD/Commercial partnership can be. This produces real results for operational effectiveness and value for money for the taxpayer. I am genuinely excited about what this contract extension means for the Base and for our ability to support the fleet".

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Posted 03/06/05

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