BAE Systems has been awarded an initial £2bn contract by the Ministry of Defence (MoD) to supply ammunition to UK troops for the next 15 years. The contract is expected to grow to more than £3bn over its duration.
The arrangement, known as Munitions Acquisition - the Supply Solution (MASS), is initially for a 15-year period and will supply approximately 80 per cent of the 'general munitions' used by UK armed forces for training and front line operations, including small arms and medium-calibre ammunition, mortar bombs, tank ammunition and artillery shells.
According to BAE Systems, around 1,700 jobs will be directly sustained by the deal. The company further claims that it will invest more than £120m in its facilities at Birtley, County Durham; Glascoed, Monmouthshire; and Radway Green in Cheshire to fulfil the contract.
MASS was signed on 20 August between the MoD's Defence Equipment & Support organisation and BAE Systems Land Systems Munitions and will be implemented from October this year.
MASS guarantees the MoD ceiling prices for 10 years and consists of three elements: a capability charge to cover all fixed costs; payment for products priced at direct material and labour costs; and a further element to allow for flexibility, such as additional engineering tasks and 'surge manufacture' to support operational deployments.