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Astute Replacement Programme: Contingent Liability

Volume 735: debated on Wednesday 28 June 2023

I am today laying a departmental minute to advise that the Ministry of Defence (MOD) has received approval from His Majesty’s Treasury to recognise new contingent liabilities associated with the detailed design and long lead items contract with BAE Systems for the ship submersible nuclear AUKUS (known as “SSN-A”).

The departmental minute describes the contingent liabilities that the MOD will hold as part of the SSN-A programme. Negotiations are ongoing and the contingent liabilities will come into force on signature of the contract.

Our key industry partner for submarine construction, BAE Systems (BAES), has requested indemnities in addition to those set out within pre-approved Defence contractual conditions to provide financial provision should the MOD decide to terminate the detailed design and long lead items contract or not award a follow-on contract with BAES. Both scenarios are highly remote as they would adversely impact support to the continuous at-sea deterrent, a top Defence strategic priority.

The attachment can be viewed online at: