Nimrod Cancelled?
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Nimrod Cancelled?
The local news in the Northwest has just reported that BAE has cancelled the Nimrod project due to spiralling costs with a potential loss of jobs. There was a picture of the new aircraft in pre production state.
Is this the case?
Is this the case?
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From the BBC Website 19/02/03
"A defence contract has been halted in Greater Manchester after production costs spiralled by £500m.
BAE Systems has reached an agreement with the Government to temporarily halt production of the Nimrod aircraft at its Woodford plant, near Stockport.
The move is likely to have implications on jobs, but it is not yet known how many will be affected.
The firm has a contract to build 18 of the planes for the Ministry of Defence.
Production is expected to restart when agreements on design, development and pricing have been reached.
The Nimrod contract is one of two to be changed - the other is the Astute attack submarine, which is produced in Cumbria.
BAE's agreement with the Government involves delaying further production of the Nimrod until the performance of the first three aircraft in this current order is demonstrated.
The project's funding has also been increased by about £270m. "
End of article, draw your own conclusions
Oh yes, forgot to mention but I believe BWoS announce their results to the city tomorrow
"A defence contract has been halted in Greater Manchester after production costs spiralled by £500m.
BAE Systems has reached an agreement with the Government to temporarily halt production of the Nimrod aircraft at its Woodford plant, near Stockport.
The move is likely to have implications on jobs, but it is not yet known how many will be affected.
The firm has a contract to build 18 of the planes for the Ministry of Defence.
Production is expected to restart when agreements on design, development and pricing have been reached.
The Nimrod contract is one of two to be changed - the other is the Astute attack submarine, which is produced in Cumbria.
BAE's agreement with the Government involves delaying further production of the Nimrod until the performance of the first three aircraft in this current order is demonstrated.
The project's funding has also been increased by about £270m. "
End of article, draw your own conclusions
Oh yes, forgot to mention but I believe BWoS announce their results to the city tomorrow
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Today's Times;
"BAE Systems, Europe's biggest defence firm, said today it had capped cost overruns on two major projects at £750 million.
The UK group has reached an agreement with the Ministry of Defence regarding the structure of the contracts, which are to build Nimrod planes and Astute submarines."
...more
So, can anyone make clear, has this basically now become a form of 'costs plus' contract? Only in this case it is 'costs minus £750m, plus.....', in which case surely BaeS only have to inflate their apparent costs to recoup the 750m. Or am I just being cynical?
"BAE Systems, Europe's biggest defence firm, said today it had capped cost overruns on two major projects at £750 million.
The UK group has reached an agreement with the Ministry of Defence regarding the structure of the contracts, which are to build Nimrod planes and Astute submarines."
...more
So, can anyone make clear, has this basically now become a form of 'costs plus' contract? Only in this case it is 'costs minus £750m, plus.....', in which case surely BaeS only have to inflate their apparent costs to recoup the 750m. Or am I just being cynical?
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BAe side of the story
Virtual News Room
In The News - Archives
19 February 2003
BAE SYSTEMS ANNOUNCES AGREEMENT WITH THE MOD TO RE-STRUCTURE NIMROD AND ASTUTE CONTRACTS
BAE SYSTEMS and the UK Ministry of Defence (MoD) have today agreed changes to the contract structure for both the Nimrod MRA4 maritime patrol aircraft programme and the Astute attack submarine programme.
In December 2002, the company announced that additional issues had arisen in relation to these programmes and that it had become apparent that there were substantial schedule and cost implications.
Under the terms of today's agreement, the current contracts for design, development, production and support on each of the two programmes will be revised. These revisions will separate the Design and Development phase of each programme from the Production phase. Design and Development will be completed under new Target Cost Incentive Fee (TCIF) arrangements. Both programmes will be placed on a firm footing for the delivery of the Astute and Nimrod capabilities into service.
BAE SYSTEMS and the MoD have established new Target Costs and Fee levels for both programmes, and have high levels of confidence of delivering the programmes within these new target levels. Up to the Target Cost level, cost saving will be shared by the customer and company as an additional Incentive Fee for the company. Any cost overruns above the Target Cost will be shared by the customer and the company, up to the maximum level established for the company by the agreement. These new arrangements will place a significant economic incentive on the company to perform. The company has reviewed its project management of these programmes, consistent with today's best practice, and is taking actions based on lessons learned.
Pricing of the Production phase of each programme will be concluded following achievement of sufficient risk mitigation from the Design and Development phase to enable production costs to be established with confidence.
NIMROD
The difficulties in the Nimrod programme stemmed principally from issues associated with delays in design causing an increasing concurrency between design, development, and production in the programme.
Production work on the last 15 of the 18 Nimrods in the MRA4 programme will stop. This work will not be resumed until significant risk reduction has been accomplished, using the first three aircraft as development aircraft. Design and Development, including the completion of the three development aircraft currently in build, will be completed under new TCIF arrangements. Prices for the production of the last 15 aircraft will be established after Design and Development stability has been achieved.
FINANCIAL
Today's agreement enables the company to recognise the cost to complete these programmes under the new contract terms. As a consequence, exceptional costs of £750m (£572m after tax) will be charged to the 2002 accounts comprising £500m for Nimrod and £250m for Astute. These charges cover in full the company's residual exposure to higher development costs up to maximum level established for the company by this agreement.
The cash consequences of these charges, after tax, are expected to comprise £225m in 2003 and £100m in 2004 with the balance of £250m expended in 2005 and beyond.
These new terms mean that these programmes can be completed by the company with financial certainty.
In The News - Archives
19 February 2003
BAE SYSTEMS ANNOUNCES AGREEMENT WITH THE MOD TO RE-STRUCTURE NIMROD AND ASTUTE CONTRACTS
BAE SYSTEMS and the UK Ministry of Defence (MoD) have today agreed changes to the contract structure for both the Nimrod MRA4 maritime patrol aircraft programme and the Astute attack submarine programme.
In December 2002, the company announced that additional issues had arisen in relation to these programmes and that it had become apparent that there were substantial schedule and cost implications.
Under the terms of today's agreement, the current contracts for design, development, production and support on each of the two programmes will be revised. These revisions will separate the Design and Development phase of each programme from the Production phase. Design and Development will be completed under new Target Cost Incentive Fee (TCIF) arrangements. Both programmes will be placed on a firm footing for the delivery of the Astute and Nimrod capabilities into service.
BAE SYSTEMS and the MoD have established new Target Costs and Fee levels for both programmes, and have high levels of confidence of delivering the programmes within these new target levels. Up to the Target Cost level, cost saving will be shared by the customer and company as an additional Incentive Fee for the company. Any cost overruns above the Target Cost will be shared by the customer and the company, up to the maximum level established for the company by the agreement. These new arrangements will place a significant economic incentive on the company to perform. The company has reviewed its project management of these programmes, consistent with today's best practice, and is taking actions based on lessons learned.
Pricing of the Production phase of each programme will be concluded following achievement of sufficient risk mitigation from the Design and Development phase to enable production costs to be established with confidence.
NIMROD
The difficulties in the Nimrod programme stemmed principally from issues associated with delays in design causing an increasing concurrency between design, development, and production in the programme.
Production work on the last 15 of the 18 Nimrods in the MRA4 programme will stop. This work will not be resumed until significant risk reduction has been accomplished, using the first three aircraft as development aircraft. Design and Development, including the completion of the three development aircraft currently in build, will be completed under new TCIF arrangements. Prices for the production of the last 15 aircraft will be established after Design and Development stability has been achieved.
FINANCIAL
Today's agreement enables the company to recognise the cost to complete these programmes under the new contract terms. As a consequence, exceptional costs of £750m (£572m after tax) will be charged to the 2002 accounts comprising £500m for Nimrod and £250m for Astute. These charges cover in full the company's residual exposure to higher development costs up to maximum level established for the company by this agreement.
The cash consequences of these charges, after tax, are expected to comprise £225m in 2003 and £100m in 2004 with the balance of £250m expended in 2005 and beyond.
These new terms mean that these programmes can be completed by the company with financial certainty.
Delays in design? I'll say that they've got delays in design. The wings they built don't bl**dy fit! It could only happen on an MoD contract. Our American cousins can manage to keep the Buff going and are planning to do so I believe until the type's 100th birthday; so what's our problem? Oh yes, silly me, mentioned it already didn't I? MoD contract!
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You have to love the line "Production on the last 15 of 18 Nimrod MR4s will stop"!!!
So, 83% stopped then.
Still, good job they didn't get the contract to build a couple of aircraft carriers
So, 83% stopped then.
Still, good job they didn't get the contract to build a couple of aircraft carriers
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Direct reference to badly written contract FT.com - BAe/Nimrod Fiasco
Whowhenwhy
As I said in a previous thread, Bae were told 6 years ago that the wings would not fit. This is what comes of employing young inexperienced EXPERTS - instead of time served Specialists!!!
As I said in a previous thread, Bae were told 6 years ago that the wings would not fit. This is what comes of employing young inexperienced EXPERTS - instead of time served Specialists!!!
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One is left to wonder which very senior officer(s) will retire soon into a lucrative job with BWoS. Meanwhile, as usual, the taxpayer pays and the forces get taken for another ride.
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Heh heh heh!
I have been saying for the past 2 years on this forum and I repeat..
It HASN'T flown
and
It will NEVER fly!!
So much for the manning predictions at last weeks Airmen Aircrew
sustainability study roadshow!!
Flight Engineers in surplus manning by 2007?? I don't think so!!
I have been saying for the past 2 years on this forum and I repeat..
It HASN'T flown
and
It will NEVER fly!!
So much for the manning predictions at last weeks Airmen Aircrew
sustainability study roadshow!!
Flight Engineers in surplus manning by 2007?? I don't think so!!
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Guess there's no point in putting a Poll out for 'Who saw it coming' and 'Who didn't see it coming' on PPRUNE.
Rumour has it that they are looking to put the new Serachwater 2000MR on 4 existing MR2s.
This'll be the beginning of the end then. Whatever happened to the Nimrod Mk3???
Rumour has it that they are looking to put the new Serachwater 2000MR on 4 existing MR2s.
This'll be the beginning of the end then. Whatever happened to the Nimrod Mk3???
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Good job I didn't hang around to have a go on the new toy then.
So along with the new ACO, Nav and the other gear is it still the MR2, or is it an AIP program in disguise.
So along with the new ACO, Nav and the other gear is it still the MR2, or is it an AIP program in disguise.