House of Commons - Defence

Select Committee on Defence Eighth Report

The national Type-45 warship

25. Although the CNGF's latest official in-service date was 2005, recent submissions from industry had pointed to a UK first-of-class CNGF vessel being available in 2007.[81] Now that the UK will not proceed with Horizon, the MoD and UK industry will have to work hard to deliver a national warship—to be designated the 'Type-45' destroyer[82]— in such a short time frame.

26. The MoD told us that it was confident that it could deliver the ship on time,[83] by making as much use as possible of the results of Horizon's competitive Project Definition work still underway.[84] The UK is already bound financially to support this work,[85] which is due to be completed in October this year[86]. Marconi Electronic Systems' involvement in the Horizon programme clearly puts it in a good position to take forward the national warship programme, but the MoD told us that its ability to use the Horizon 'Phase 1' work was not determined by its choice of prime contractor.[87] Nevertheless, the selection of a prime contractor for the Type-45 would be heavily influenced by bidders' willingness to utilise this Phase 1 work—

Until we have appointed a prime contractor for the national programme we will not know [how much of the Phase 1 work is usable] ... We have made substantial progress in designing the ship and we must use that to save time in moving forward with the national programme. It will be for the prime contractor to decide, but a great deal of our consideration of who that prime contractor should be will rest on his ability and willingness to exploit the results of the work undertaken so far.[88]

To facilitate competition for the prime contractor, all contenders should be given access to the results of the Project Definition and Phase 1 work already undertaken.

27. While it remained a possibility that new competitions would be held [89] for the ship's 'development programmes' (Figure 2), the MoD would be looking at the results of the earlier competitions for the scope for adapting them to a national solution.[90] The Horizon Joint Project Office is negotiating with the bidders to make their offers available for the Type-45, and it will also do so for any French/Italian follow-on ship programme.[91] Considerable effort and cost has been expended on the 'development programme' competitions, and the MoD should indeed seek to make good use of the results to save further cost and time. Potential prime contractors for the Type-45 will have to weigh up the risk and cost of utilising the work already done under Horizon, and it is not clear whether any useful purpose would be served by the MoD compelling them to re-run these competitions.

28. The design of the new Type-45, like the Horizon frigate before it, will be influenced and constrained by its primary role as a platform for deploying PAAMS. In particular, the ship will need to be able to support an elevated aerial structure for the heavy Sampson radar in order to maximise the distance at which threats can be identified, and it will need a beam and depth able to accommodate the large missile silos of the PAAMS system.[92] When such requirements are combined, the MoD expects that the ship would have to be nearer 6,000 tonnes than the 4,000 of, for example, the Type 23 frigate. The ship cannot therefore be evolved from the Type-23. The US Aegis destroyer is sufficiently large—at 8,500 tonnes —but the MoD considered it unaffordable.[93]

29. As a national programme, however, there is scope for design flexibility in other areas. Collaborative projects inevitably involve some compromise in arriving at a common specification (this is accepted because any additional costs involved should be outweighed by the savings from economies of scale in development and production). Accordingly, in turning to a national solution some elements of the collaborative Horizon warship may now be cut back, to suit the UK's requirements more closely. A notable example is the high cost of the Electronic Warfare System (EWS) for Horizon, which might have cost £180 million to develop and £14 million to manufacture for each ship. The Common EWS requirement was unaffordable within the development funds available, but a reduced requirement was never properly agreed between the three partner countries.[94] For the UK's national warship, however, the EWS will be governed by available funding from the outset, with enhancements coming later.[95] By removing non-UK requirements, the MoD expects the costs of the EWS to be only a third as high.[96] Savings would also be possible in regard to the Combat Management System if missile defences could be simplified. CDP told us that—

We will probably avoid an inner layer missile system which was part of Horizon. It was a system designed to defend the ship against what are called leakers— in-coming missiles which get past the PAAMS system. What is interesting about that is not that it is just a technicality, it is the complication of having two missile systems, and the operational handover and the split-second timing that is necessary to do that makes the task of the combat management system enormously more difficult. So by deciding that PAAMS is good enough, why do we need an inner layer missile system on introduction into service? We have saved money on the production cost of the ship and, just as important, we have hugely simplified the combat management system. That is the type of trade-off we are looking at.[97]

The MoD must of course avoid gold-plating for the Type-45, and it is sensible to throw overboard the top-heavy and expensive non-UK elements of Horizon that helped to capsize that project. It may be possible to make savings by carefully trading off cost and capability, but we trust that this does not jeopardise the enhancements in naval air defence capability, which we will still need to have early in the next century.

30. Not all of the benefits offered by pursuing a national warship programme involve cost savings and trimming back capabilities. It will be easier, for example, to adapt the requirement to provide additional evolving capabilities sought by the UK. When we visited the US in October 1999 we were briefed on the flexibility afforded by the Lockheed-Martin VLS-41 missile launcher. While the French/Italian 'Sylver' PAAMS launcher is tailored for the anti-air 'Aster' missile, the VLS-41 (already in service on many US Navy ships) can accommodate missiles fulfilling a number of roles—tactical ballistic missile defence, land-attack, anti-surface ship and anti-submarine, as well as anti-air warfare. We were told that the UK has already ordered the Sylver launcher for its first-of-class Type-45. Lockheed-Martin were concerned however that should the MoD wish to extend the role of the ship beyond simply an anti-air warfare capability, a ship design focussed exclusively on the space and weight requirements of the Sylver launcher might preclude the use of the larger and heavier VLS-41 system in follow-on batches of the warship.

31. The MoD should take full advantage of the opportunities afforded by the national Type-45 programme to explore the potential for using alternative sub-systems, looking beyond the equipment available from the three former partner countries. The Future Surface Combatant will no doubt seek to address the evolving requirements for capabilities currently provided on the Type-23s, which it will succeed. More immediately, however, we recommend that the MoD should explore the opportunities for designing the Type-45 to allow maximum flexibility for potential capability enhancements. In the particular case of the missile launcher for the Type-45, we expect the MoD to examine carefully the scope for designing-in the ability to fit a wider range of missile types including the sort of Tomahawk land-attack missiles (TLAM) that the Royal Navy used in Operation Allied Force. It may be possible to adapt the Sylver launcher at some future point for use with more types of missile, but a more flexible option would be to provide enough space in the ship to accommodate a VLS-41 launcher. This would also have the advantage of ensuring that there was potential for competition for the rest of the class.

32. As regards competition for supplying the new warship, CDP was careful not to restrict options for integrating the warship systems to only UK prime contractors,[98] although Government policy is that UK warship hull construction should only be undertaken in UK yards. National hull construction is the approach also adopted by other countries with an indigenous shipbuilding industry. It seems that such an approach by each of the Horizon partners precluded some of the potential savings, as the design of each country's ship was to have differed, to reflect incompatible computer-aided design tools and cranage capacity in each country's shipyards.[99] CDP was clear however about the advantages of constructing the UK ships in British yards—

I do not see any reason to move away from our policy of constructing our warships in this country. In my view to do so without securing reciprocal arrangements with other countries would be a type of suicide note. I also think that, not just in commercial terms, but also [because of] the extreme complexity of building a warship and integrating all its systems, keeping control of security issues and the many other technical features of warship construction. When it comes to the systems, to insist on those being developed in companies operating in Britain would not be sensible. I think that would be penalising the Royal Navy. You only have to look at the armament of a ship with Harpoon missiles, or Exocet in the past, and many other pieces of equipment which have come from overseas,

to realise that if you insist on having all the systems developed in this country we will pay both a financial price and one of military capability.[100]

33. To build the warship, the MoD has three "obvious shipyards" in the UK: Yarrow on the Clyde, GEC Marine (VSEL) at Barrow-in-Furness and Vosper Thorneycroft at Southampton.[101] With Yarrow and Barrow under the same ultimate ownership of BAe/GEC Marconi, the MoD is keen that Vosper Thorneycroft also can be a credible competitor, not least because competition will be needed for follow-on production batches of the class in order to retain incentives for the shipyards to improve their performance.[102] The firm would have to enlarge its facilities to build the ship at its Woolston yard.[103] The MoD's strategy to secure this competition means that while Marconi Electronic Systems has been given start-up work and a subsequently appointed prime contractor will undertake 'Preparation for Demonstration' work, the subsequent 'Demonstration and First-of-class Manufacture' contract will stipulate a warship design that lends itself to building the ships in the yards both of Vosper Thorneycroft and Yarrow Shipbuilders.[104]

34. Now unfettered by the incompatibilities of the equipment selections and competition policies of Horizon's partners, the MoD acting alone can now make sensible procurement choices for the Type-45's key systems. But that must mean keeping an open mind on potential bids from the existing tri-national Horizon consortia and other foreign systems-integration firms, as well as from UK suppliers. Warship building itself, however, remains a closely protected industry by all countries with an indigenous capability, and in that light, like CDP, we see no reason to review unilaterally the policy not to allow warship building to go overseas.

35. The MoD intends to procure the Type-45 warships in more than one batch. It considered that making a first-of-class prime contractor responsible for running the competitions for follow-on production would involve too much risk and possible conflicts of interest.[105] The MoD told us that—

Competing for follow-on ships in batches increases the pressure on tenderers to reduce prices. Savings of around 30% were achieved between the first-of-class vessel of the Type-23 and the 14th hull of that class and we do not believe that these savings would have been as large without the pressure of competition. We anticipate achieving a similar level of savings in the Type-45 programme.[106]

We welcome the MoD's intended approach of overseeing the competition for the follow-on vessels, rather than giving this responsibility to the first-of-class prime contractor.

36. A batch approach would also facilitate future capability enhancements. The MoD told us that although the basic ship design should remain the same, changes in some aspects of the design are inevitable in the time it would take to produce all 12 vessels.[107] As CDP put it, "it is virtually inconceivable that some systems will not be capable of improvement, even if it is only by modifying the software".[108]

37. CDP outlined the timetable now envisaged for procuring the Type-45, with an in-service date of 2007—

The first bottleneck is to make sure we place the PAAMS contract this summer.[109] ... The second bottleneck is to order the ship next year, the first of class ship. [A 'Preparation for Demonstration' contract will be completed by late 2000, when approval will be sought for placing a 'Demonstration and First-of-class Manufacture' contract.[110]] ... It is important that we make use, where appropriate, of the work that has already been accomplished in Horizon Phase 1, because otherwise that sort of timetable would be far too optimistic. We then have about a five year ship design and construction programme. There is usually about a year and a half of design work before we start cutting steel and building the first module. We are satisfied that that is rational because that is what it takes on similar programmes. If all that comes to pass, contractors' sea trials will take place before the end of 2005. Then there will be a very demanding work-up of the systems, particularly the PAAMS system, in extensive trials on the first of class ... Then there will be operational work-up for the crew, and the ship will enter useful military service with the Royal Navy before the end of 2007. That is not an optimistic timetable. That is a timetable that is absolutely founded on our own experience of how long it takes to bring ships into service.[111]

CDP also told us of his determination to keep the programme on track—

I hope I have made clear the determination to make sure PAAMS remains the critical path. We must not allow the ship to somehow delay the introduction into service of PAAMS. ...It was the fact we settled the PAAMS terms and conditions last autumn which has really brought the ship programme to a head because of a determination to keep them alive. ...We are not going to be blown off-course on the national programme, [and this is] because we have a timetable set by PAAMS.[112]

We welcome the CDP's determination to keep momentum behind the Type-45 programme.

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