MoD lease deal to save £8 million

5 January 2007
More news

05 January 2007 | Paul Snell

The Ministry of Defence (MoD) will save £8.1 million by renewing a contract for Royal Navy ships early.

The MoD said that because it is extending its leasing contract for three fishery protection vessels, defence contractor VT Group has agreed to cut 20 per cent from the cost of the deal with the department. The ships, HMS Tyne, HMS Mersey and HMS Severn, patrol the UK coastline and enforce fishing limits.

The deal will save £1.62 million annually between 2008 and 2013. The contract is worth £52 million.

When the leasing contract was originally signed in 2001, it was the first time the organisation had procured Royal Navy ships from a private company under a leasing contract. The ships are built, maintained and owned by VT Group and then rented to the MoD.

A spokesman for the MoD told Supplymanagement.com that the saving "illustrates how successful the procurement strategy has been."

Its success has prompted the MoD to draw up similar contracts, including one for patrol boats in the Falkland Islands.

SMjan2007

LATEST
JOBS
Swindon, Wiltshire
upto £40K base (+ Paid overtime and corporate benefits)
Honda Manufacturing Ltd
Kew gardens, Richmond upon Thames, London (Greater)
£37,000 - £42,500 per annum pro rata, depending on skills and experience
Kew Royal Botanic Gardens
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE