Royal Navy Type 31 frigate order goes to Babcock - The race to design - and build the new generation of Royal Navy frigates has been won by a consortium led by the Babcock Group.
The firm has been chosen preferred bidder for the £1.25bn contract for the five Type 31 frigates.
The deal will secure hundreds of jobs at several Babcock locations, where the ships will be assembled, with construction work spread between yards across the UK, inlcuding Devonport Dockyard in Plymouth and Rosyth in Fife.
Work will begin before the end of 2019, and the first ships will be delivered in 2023.
The Type 31 will be a smaller and cheaper frigate than the Type 26 warships currently being built at the Upper Clyde shipyard. The Type 31 has also been nicknamed the "Lidl Frigate".
With a price ceiling of £250m per ship, the aim of the project is to maintain the size of the Navy's surface fleet and generate export orders.
Prime Minister Boris Johnson said the modular construction method would support 2,500 jobs throughout the UK, just before the preferred bidder was announced to the stock exchange. He mentioned: "This is an industry with a deep and visceral connection to so many parts of the UK and to the union itself. My government will do all it can to develop this aspect of our heritage and the men and women who make up its workforce - from apprentices embarking on a long career, to those families who have worked in shipyards for generations."
Scottish Secretary Alister Jack has said Scotland was at the "forefront of a renaissance in UK shipbuilding. This is a clear show of support for the UK defence sector, the role it plays in keeping the United Kingdom secure, and its contribution to Scotland's prosperity through high-skilled employment and investment," he added.
Unions involved welcomed the announcement. Unite spokesman said it would secure hundreds of jobs at Rosyth "for well over a decade". GMB Scotland said it was "excellent news", congratulating the team that put the bid together.
The Babcock team's design (called Arrowhead 140) trumped its competitors, a Cammell Laird/BAE Systems consortium and a third bid led by Atlas Elektronik UK.
The winning consortium includes Babcock, Thales, BMT and Ferguson Marine, based in Port Glasgow and Harland and Wolff in Belfast (both of which are currently in administration). However, Babcock insists the firms' financial difficulties would not affect this bid because of its "flexible build approach" that could accommodate "a range of delivery sites".
The three designs that were put forward in the running for the Type 31 contract were very different, but had one thing in common - they were cheap!
£250 million for one single ship might sound like a lot of money BUT, to put it in context, the price of the eight Type 26 frigates currently under construction comes to around £8bn.
The extremely tight price cap on the new ship have led some critics to describe it as "the Lidl frigate". The way bidders have tried to keep the price down was by basing their new models on successful previous ship designs, rather than starting from scratch.
The winning design, Babcock's "Team 31", is therefore based on the Iver Hutfeldt frigates developed for the Danish navy with added flexibility - most equipment can be upgraded or reconfigured to increase operational practicality.
Hopes that this "bargain basement ship" will prove its worth and there will be orders from foreign navies would also drive down its costs. This side objective is why the frigate is sometimes referred to as the Type 31e - "e" for "exportability".
The Type 26 frigate order was made public in the summer of 2014, just months before the Scottish independence referendum was to be held, securing many jobs at BAE Systems yards in Glasgow, the contract's winner.
BUT the 2015 Strategic Defence and Security Review has seen the expected project size scaled back - from 13 to 8 ships - and proposed building "at least five" new general purpose frigates, at a much lower cost - which would come to be the Type 31 frigates. Without any real guarantees that the work would again come to Scotland, pro-independence campaigners argued this was a broken promise.
An independent review by Sir John Parker pushed the government in to encourage competition in naval procurement, with an emphasis on supporting shipyards across the UK, according to the new National Shipbuilding Strategy.
To keep in line with this strategy, the government opted for Babcock - with its Rosyth site taking the lead in construction but having work spread across several UK sites. This should also reduce the British government's reliance on BAE Systems, which has long held a monopoly in our national naval shipbuilding.