The contract is expected to be valued at A$300 million (c £200 million) over an initial five year period, with an option to extend for a further five years. The final contract is expected to be signed by the end of June 2012 and become operational, after a transitional phase, on 1 January 2013.
This contract marks Babcock's entry into the surface ship support market in Australia at a time when the Australian Department of Defence is seeking to reform its naval ship repair market to ensure optimum value for money while setting high standards of performance. Both Babcock and UGL have proven track records and considerable experience in managing long-term, performance-based maintenance contracts as well as delivering efficient and cost-effective support for major warships.
Babcock and UGL have also been down selected to tender for the Amphibious and Afloat Support Ships' GMC when it is released. This is expected to be by mid 2013.
Commenting on the award Peter Rogers, Chief Executive of Babcock said:
"We are delighted to have won this contract with our partners UGL. We look forward to working with the Australian Government and developing a long-term relationship as we support its plans to deliver a new, cost-efficient, integrated naval support solution.
This success reinforces our confidence in the growth prospects for Babcock in the Australian naval support market."