Douglas Barrie/LONDON
BIDDERS FOR THE ROYAL Air Force's £2 billion ($3 billion) Nimrod MR2-replacement programme are considering paying their own development costs initially, to avoid a delay because of Government funding problems.
The funding difficulties have arisen as a result of cost pressures within the UK Ministry of Defence's long-term costings (LTCs) which project procurement expenditure.
The three bidders for Staff Requirement (Air) 420, British Aerospace/Boeing, Lockheed Martin/GEC-Marconi, and Lockheed Martin Tactical System (LMTS) UK (formerly Loral), submitted revised bids at the end of April. A decision is expected by the end of July
Sources close to the bidders confirm that there is a "affordability problem" on the programme, for the purchase of up to 25 replacement maritime-patrol aircraft (RMPA), starting in 2001.
A Whitehall source says: "The programme was originally envisaged as an off-the-shelf procurement. There was a failure to recog- nise the nature of the specification...the end result has been a problem with the front-end costings."
The MoD declines to discuss "specific" LTC issues.
The bid teams say unofficially that the development requirements of the aircraft on offer, the Lockheed Orion 2000, BAe Nimrod 2000, and LMTS Valkyrie has meant that programme costing has "totally the wrong profile".
It is believed that the LTC situation has been exacerbated by the MoD's 1995 decision to procure the EH Industries EH101 for the RAF. The peak expenditure on this programme clashes with that of the RMPA.
Officials from two of the bid teams confirm that they: "...are trying to find ways of helping the MoD". One way of doing this would be to for the winner initially to absorb the development costs. This would lower the early funding profile of the programme, but would be recouped later.
Source: Flight International