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UK MoD Inks £2.4 Billion Munitions Contract with BAE Systems

Next Generation Munitions Solutions Covers 39 Munitions Types

The Next Generation Munitions Solution (NGMS), valued at some £2.4 billion (€2.7 billion), will see BAE Systems manufacture 39 different munitions for the Royal Navy, Army, Royal Air Force and Strategic Command to use on the front line, including small arms ammunition, mortars, medium-calibre gun rounds and large-calibre artillery and tank shells, the UK MoD announced on 30 November. An estimated 1,260 staff will work on the contract at five BAE Systems sites. A further 1,500 jobs will be supported in the supply chain, alongside 1,300 jobs resulting from consumer spending in local economies.

Replacing the current Munitions Acquisition Supply Solution (MASS) single-source contract from January 2023, NGMS will deliver about 50%, by value, of the MoD’s total general munitions (GM) portfolio, maximizing military capability and reducing cost.

This contract secures the future of a highly technical and critical industry which supports thousands of manufacturing jobs in several areas throughout the UK. By investing in new technology and skills to further develop our expertise, we can continue to deliver essential sovereign capability to the armed forces at competitive prices,” commented the company’s Chief Executive, Charles Woodburn.

The new contract will offer better value for money, as it includes incentives for BAE Systems to make savings over the life of the contract. The company has identified about £400 million of savings and efficiency opportunities to be pursued up to 2038 to meet this challenge. The contract also includes flexibility to vary the volume of orders and allow GM products to be added or removed, depending on front-line requirements.

As it delivers the munitions, BAE Systems forecasts it will spend £350 million with UK-based companies on raw materials and machine components. It also pledges to invest more than £70 million refurbishing and upgrading manufacturing lines, and to recruit over 200 apprentices and graduates during the course of the contract.

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Publish date

12/01/2020

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