Lockheed Martin Gains U.K. Nuclear Submarine Work With Babcock

Lockheed Martin Corp. (LMT) and Babcock International Group Plc (BAB) will take over support activities involving the U.K.’s Vanguard submarine-based nuclear deterrent under a contract signed today.

The U.K. Ministry of Defence finalized a 15-year agreement with the ABL Alliance for support of the Trident weapon system at the Royal Naval Armament Depot in Coulport and the Strategic Weapon Support Building at Faslane, the defense ministry said in a statement. The contract is valued at 150 million pounds ($236 million) over its duration, a defense ministry spokesman said.

AWE Plc, based in Reading, England, will act as the prime contractor. The company, owned equally by Lockheed Martin, Serco Group Plc (SRP), and Jacobs Engineering Group Inc. (JEC), also runs the U.K. Atomic Weapons Establishment under a government-owned contractor-operated arrangement.

The Trident support contract is part of a wider U.K. defense ministry initiative to shift work to the private sector and reduce the government’s work force. The defense ministry decided last year to outsource the Trident work after a three- year review period.

“All three members of the Alliance are already engaged in supporting the U.K.’s strategic deterrent,” Tony Morris, ABL Alliance’s director at Coulport said in a statement. “Our immediate focus is to work with the established MOD employee team already based at Coulport and to ensure a seamless transition of operational support.”

Several civilian and Royal Navy positions will shift to the ABL Alliance under the new arrangement. Legally required discussions with labor unions still have to be completed. Industry is to take over the support activities in January “subject to the successful completion of this further consultation,” the defense ministry said.

The U.K. maintains a fleet of four Vanguard strategic submarines that are the backbone of the country’s nuclear deterrent policy. The government, last year, began the process to develop a replacement for the Vanguard-class fleet. A final decision to go ahead with the program is due in 2016.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.