U.K. Shortlists BAE Systems, Babcock to Build New Warship Design

(Bloomberg) -- The U.K. government shortlisted three groups that include the companies BAE Systems Plc and Babcock International Group Plc to develop designs for its newest warship.

The ultimate contract to build five Type 31e frigates is valued at 1.25 billion pounds ($1.6 billion), with each consortium receiving 5 million pounds to further develop each design, the Ministry of Defense said in a statement. BAE has presented a design with commercial shipbuilder Cammell Laird, while Babcock is bidding in a consortium with France’s Thales SA. The U.K. unit of Germany’s Atlas Elektronik was also selected.

The shortlist is a step forward for the program, initially designed as a cheaper alternative to BAE’s Type 26 complex frigate that can be more readily sold into export markets. The original competition didn’t receive sufficient compliant bids, prompting the government to pause the program and restart the bidding process earlier this year.

A preferred bidder to manufacture the ships will be chosen by the end of next year, with the first delivery scheduled for 2023, according to the ministry.

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