BAE Systems has signed a £369.5m contract with the Royal Navy and the Royal Air Force to provide in-service support for its Spearfish and Sting Ray torpedoes.

The 10-year Torpedoes Capability Contract (TCC) combines 11 separate contracts under one umbrella and is expected to support around 120 skilled jobs at BAE Systems in Portsmouth.

Torpedoes project team leader, Capt Jim Johnson, said: ‘This is a radical improvement over legacy arrangements and has significantly reduced costs. It delivers more coherent and affordable support for torpedoes and also provides the foundation for the development and upgrade of the Spearfish weapon.

‘The adoption of partnering principles and close collaborative working with BAE Systems Integrated System Technologies (Insyte) was pivotal to delivering the optimum support solution.’

The partnering approach will see the Ministry of Defence’s (MoD) DE&S Weapons Operating Centre work with BAE Systems as ‘Team Torpedoes’ to deliver cost savings of around 20 per cent, resulting in efficiency savings of at least £65m.

BAE Systems will also work with the MoD on the proposed upgrade of the Spearfish programme, which is due to be deployed in the Astute Class submarine from 2010.

Paul Laity, BAE Systems Insyte Naval programmes director, said: ‘The TCC provides a coherent approach to torpedo support as well as providing a basis for future development programmes. It maintains a sovereign UK capability for the design, development and through-life management and support of the torpedo inventory, thus contributing to the aims of the Defence Industrial Strategy.’