The Ministry of Defence is poised to renew funds to the US defence firm answerable for the British army’s troubled Ajax armoured vehicle, within the strongest sign but that it stays dedicated to the long-delayed programme.
Common Dynamics, which was awarded a £5.5bn contract in 2014 to ship 589 autos, has not been paid for the previous two years as the federal government probed serious noise and vibration problems throughout trials that precipitated listening to harm to some crews.
After a health and safety review into Ajax recognized “severe failings” within the UK’s defence procurement tradition, the MoD commissioned Clive Sheldon KC final yr to conduct an impartial inquiry into what went incorrect with the programme.
Common Dynamics advised traders final month that its “unbilled receivables” associated to Ajax stood at “roughly $1.7bn” on the finish of 2022 and that it anticipated funds to restart by the top of March.
“I don’t need to get into the specifics of how a lot we anticipate to gather this yr . . . However . . . we do have good purpose to anticipate these money receipts to renew earlier than the top of this quarter,” Jason Aiken, Common Dynamics chief monetary officer, mentioned on the time.
Common Dynamics was final paid in December 2020. Based on a report by the Home of Commons public accounts committee printed in June final yr, the US contractor has to this point obtained £3.2bn regardless of delivering solely 26 Ajax autos by the top of 2021, none of which had entered service.
Common Dynamics’ UK subsidiary declined to remark however pointed to a December social media put up by the MoD that mentioned consumer validation trials for the autos had “efficiently accomplished”.
In its accounts for 2021, the corporate blamed the “vital delays” to the contract on “technical considerations raised by the UK MoD and, to a lesser extent, the residual pressures of Covid-19. Specifically, security notices issued by the shopper in 2021 have impeded progress in lots of areas.”
The MoD declined to remark particularly on Aiken’s remarks however mentioned it continued to “work carefully with Common Dynamics for the profitable supply of Ajax and have moved to the following part of testing the automobile below simulated battlefield situations”.
It added: “Whereas particulars of the contract are commercially delicate, future funds stay below evaluate because the programme continues its optimistic trajectory.”
Alex Chalk, defence procurement minister, final month mentioned progress had been made on rectifying a few of the issues. Showing earlier than the defence committee, Chalk advised MPs that there have been “now superb grounds to suppose that [Ajax] will come good, and we may have a really efficient and deadly bit of apparatus”.
The Ajax programme has change into essentially the most distinguished latest instance of Britain’s poor record of shopping for new weapon methods. It was meant to ship a household of cutting-edge armoured autos to switch ones nonetheless in service with the military that had been designed within the Sixties.
Tobias Ellwood, chair of the defence committee, mentioned: “The MoD pledged to solely resume funds as soon as they’re glad with the programmes’ future trajectory. If funds are to recommence the MoD ought to clarify to parliament and the committee precisely what has modified.”
The failure to ship Ajax has added to rising considerations concerning the state of Britain’s floor forces. “Russia’s invasion of Ukraine has underscored the significance of sustaining a combat-ready fleet of armoured autos. Our severely diminished and quickly ageing fleet leaves us susceptible,” Ellwood added.
John Healey, Labour’s shadow defence secretary, on Tuesday known as on the federal government to safe the UK’s place because the main European nation inside Nato and halt additional cuts to the military.