Since the publication of the DIS in December 2005 there has been significant progress in five of the key sector strategies (maritime, rotary wing, complex weapons, fixed wing and land). These are beginning to result in noticeable benefits to the defence programme as a whole.
The Maritime Change Programme ("MCP") has been at the core of implementing DIS as its origin pre-dates DIS and it was one of the key drivers for developing a Defence Industrial Strategy. It will be implemented through a number of key initiatives:
• A 15 year Terms of Business Agreement19 ("TOBA") with BVT Surface Fleet Limited, a Surface Ship Joint Venture between BAE Systems and VT Group, to focus on both current production and long-term support. Anticipated net benefits of £700-1,100m over next 15 years.
• A 15 year TOBA with Babcock Marine that agrees scope share as UK's sole provider of submarine support services in return for anticipated efficiency savings of £600m in submarine and surface support over 11 years.
• An alliance between BVT and Babcock Marine for efficient delivery of surface ship support in the UK.
• Submarine Enterprise Collaboration Agreement that includes BAE Systems Submarines, Babcock Marine and Rolls-Royce. An exception under the Competition Act has been awarded based on the justification of maintaining national industry capability.
The Rotary Wing Sector strategy has been realised through the AugustaWestland Partnering Agreement that was established alongside the DIS. It has been successful in implementing a number of innovative solutions, particularly focusing on through life cost savings, for helicopter support, future upgrade and development.
Team Complex Weapons is a concept that defines a programme of ongoing activity designed to react to current technology and user needs. A number of successful pilot projects have been implemented and it is estimated that over 10 years Team CW will deliver over £1 bn of benefits.
The Fixed Wing Air Sector Strategy has been recently reformed to represent a strategy that still retains a focus on BAE Systems for future support, but that is also looking at the future offshore JCA. Notable savings have been achieved to date in support and upgrade contracts (see Section 7.9 for progress with Contracting for Availability).
The Armoured Fighting Vehicle Strategy has been expanded into a Land Industry Sector Strategy that addresses the global market for land equipment. It will be made up of a number of sub-sectors, of which AFV will be one, as will Individual Soldier System and Battlefield Infrastructure Strategies.
With these limited set of sector level implementation strategies for DIS the Department is making good but slow progress. However, to a certain degree, DIS militates against the effective operation of competition in key areas of equipment acquisition with the consequence of increasing costs by deliberately moving to ensure sustained, efficient, onshore industrial capability.
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19 The TOBAs are a key part of the MCP and will include commitments from the MoD to industry on supply scope and sustainment of Key Industrial Capabilities. In return, the MoD expects commitments from industry to rationalise infrastructure and resources.