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CLIENT STORY

Ministry of Defence: Negotiating £113 million in savings on the UK’s submarine-building programme

Building submarines is challenging and technically complex. And there are few more demanding programmes than the Ministry of Defence (MoD)’s current project to build seven Astute-class nuclear submarines. They asked us to work with them on negotiations with the critical contractors building the final boat – to ensure value for money for taxpayers.

Our expert team combined their specialist experience of the defence sector with an external perspective to carry out a forensic analysis of the contractors’ proposals. We then used historical and industry data to establish what each part of the programme should cost. Using this information we coached the MoD’s teams to prepare them for face-to-face negotiations with the contractors.

Armed with this detailed knowledge and a clear negotiation strategy, the MoD successfully agreed more robust contracts. These transfer greater risk to the contractors and have a clearer focus on driving performance.

Our support in negotiating the final deal brought savings of £113 million across the £1.4 billion contracts. The scale of these savings is particularly significant given the lack of competition in this market and the number of stakeholders involved.

This careful work has helped ensure taxpayers will get value for money. And the submarine will be delivered as soon as possible, allowing it to play a critical role in defending the UK over the next thirty years.

"Thanks to the exceptional efforts of you and your teams we have signed contracts that will ensure the security of the UK for years to come."

Steve Rose,
Head of Astute Programme - Submarine Delivery Agency,
MoD

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