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Project Protector Contract Signed In Face Of Claim

Project Protector Contract Signed In Face Of $55 Million Claim

Leading Dutch shipbuilder Schelde Marinebouw B.V. is surprised the Ministry of Defence has concluded a contract for Project Protector, valued at around $500 million, despite being advised beforehand that a legal claim for $55 million was being prepared.

Schelde is a part of the Damen Shipyards Group employing 11,000 people worldwide, with 30 yards delivering in excess of 160 vessels per year and an annual turnover in excess of 1 billion Euro. Schelde has been delivering naval vessels to the Netherlands and other navies for over 125 years. Present orders include two corvettes for Indonesia and four destroyers and a multi-role vessel for the Royal Netherlands Navy.

Legal proceedings

“Schelde, as MoD’s second preferred option for the Multi Role Vessel (“MRV”) has filed a claim in the High Court seeking to overturn the award of the Project Protector contract to Tenix Defence Pty Limited” says a spokesman for Schelde Shipbuilding.

The spokesman emphasised “It is the actions of Ministry of Defence officials that are being questioned. Schelde has no beef with fellow shipbuilder Tenix. But in our opinion Tenix has wrongly been awarded the contract through a fatally flawed tender process.” “Tenix has only been nominated as a defendant because of New Zealand’s legal requirements.”

Tenix proposal falls short of meeting RFP requirements

The MRV proposed by Tenix could easily turn out to be another HMNZS Charles Upham. Aside from carrying a landing craft, its roll-on roll-off (Ro-Ro) design provides little additional capability notwithstanding its likely price tag of up to $250 million.

Other shipbuilders were probably capable of meeting the full operational requirements within the US$100 million originally indicated as being available for this project. The claim questions both the safety of the proposed ship-to-shore transfer system and whether in fact the Ministry of Defence could lawfully have chosen it.

Disquiet over MoD’s approach to contracting

It is not only Schelde that is disquieted by the Ministry’s approach to contracting. Schelde understands at least two other investigations of the MoD are taking place: one relating to other aspects of Project Protector and the other relating to the LOV-MV procurement.

The serious mistakes identified in the Auditor General report into the LAV III procurement appear to have been fully replicated by MoD in Project Protector.

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