London — Lockheed Martin UK is to team with Israel's Elbit Systems in its bid to secure a deal to update the British Army's aging fleet of Challenger main battle tanks.
The two companies revealed their collaboration pact just 24 hours ahead of the closing date for the submission of industry proposals to undertake the assessment phase on a program which could see up to 227 tanks updated at a cost of £624 million ($816 million).
The requirement has attracted the attention of some of the leading companies in the western armored-vehicles sector.
A consortium led by BAE Systems and General Dynamics, the newly announced Lockheed Martin–Elbit Systems UK team, Rheinmetall, Swiss defense company Ruag, and a CMI Defence-Ricardo UK partnership have all announced over the last couple of months they will bid.
Krauss Maffei Wegmann, who submitted an earlier pre-qualification questionnaire to the Ministry of Defence (MoD), did not respond to calls from Defense News.
Richard Muir, Lockheed Martin UK's business-development director for armored vehicles, said Elbit would play a key role in enabling the team to develop a solution free of any support from the original equipment manufacturer (OEM) — in this case, rival bidder BAE.
"Elbit brings a huge amount of value in terms of experience, not just as a supplier on our Warrior and Ajax [armored vehicle programs] but the upgrade of over 3,000 main battle tanks. The key thing about that is most of those upgrades have been carried out without any support from the OEM, that's key to the program," Muir said.
BAE is the design authority on the Warrior infantry fighting vehicle update program but lost the contest in a bitter fight with Lockheed Martin.
Teaming with Elbit is part of a strategy for Lockheed Martin to sidestep issues like intellectual property rights.
"I'm assuming we won't get any help from the OEM, but I don't believe there will be any intellectual property issues. Elbit has fantastic experience in reverse engineering different main battle tanks," Muir told reporters during a briefing in London.
"It's a situation we have faced before and successfully dealt with, so we are not particularly phased by that, and, anyway, some of the original IP is a long time ago," said Martin Fausset, Elbit System UK's recently appointed CEO.
Lockheed Martin already claims to be Britain's leading armored fighting-vehicle company through its contracts to supply the turret for General Dynamics UK's Ajax scout vehicle program for the British Army and its upgrade of the Warrior infantry fighting vehicle with a new turret and other systems.
Elbit UK is part of the supply chain for the two army programs and is expanding an operation here that already numbers 500 people across sites in the south and northwest of England.
It recently secured a significant contract as part of a consortium with KBR to provide and support fixed-wing aircraft for military pilot training.
The MoD is expected to select two bidders to undertake a competitive two-year assessment phase ahead of awarding a development and manufacturing contract by around mid-2019.
"The MoD issued an invitation to negotiate on April 5, 2016, inviting bidders to submit proposals to undertake an assessment phase to develop cost-effective solutions to address obsolescence and update the Challenger 2 main battle tank," an MoD spokeswoman said. "The tender response date is 11 Aug.; with the assessment phase contracts scheduled to be placed later this year. Future dates will be dependent on the solution and approval at the main investment decision point currently scheduled for 2019."
Until recently, the British had been expecting to down select the winning assessment-phase contractors this month and have the two £19 million deals signed in October. But the MoD acceded to a request from one of the bidders to extend the competition deadline by a month.
The name of that contractor and their reason for the extension request are unknown at this stage.
The British Army is primarily looking to address turret-obsolescence issues in a tank which entered service in 1998 and recently had its out-of-service date extended 10 years, to 2035, as a result of the 2015 strategic defence and security review deliberations.
Some actual updates also are being considered, and the assessment-phase work will include looking at affordable upgrades that go beyond just keeping the tanks battle worthy. For example, one of the studies will cover lethality. Lockheed Martin executives said the area could extend beyond traditional weaponry, potentially also covering radio-frequency jamming pods and target-designation equipment to enable joint fires.
One upgrade could be the provision of a defensive-aids system, or active-protection system, for the BAE-built Challenger 2.
An Aug. 1 letter from the chief of the general staff, Gen. Nick Carter, appointing Maj. Gen. Mark Gaunt as the senior responsible owner of the Challenger update — officially known as the Armour (MBT) 2025 program — said one of the milestones would be an April 2018 decision on whether to field a soft-kill, defensive-aids system.
In early July, the Defence Science and Technology Laboratory placed a £7.6 million deal with Qinetiq to evaluate active-protection equipment for armored vehicles, including integrating an Airbus Defence system known as MUSS on the Challenger 2.
The letter to Gaunt said the aim of the program is "through a series of projects, to examine value-for-money options to deliver main battle tank capability from 2025 to 2035."
Also included in the letter is a requirement for Gaunt to start looking at a replacement for the Challenger 2.
"Concurrently, the program will develop choices for what might provide the capability beyond 2035," Carter's letter said.
The imminent submissions of Challenger 2 bids coincided with the leaking of a British Army report, dated July 10, which noted Russian abilities to out-match capabilities in firepower, electronic warfare, cyber and other weapons.
The report in The Times didn't specifically mention main battle tanks but the appearance last year at a Moscow military parade of the new generation T-14 Armata platform may represent a significant step forward for Russian capabilities.
Germany and France have said they are looking at a long-term program to build a new main battle tank, but so far there is no indication of British interest.
Andrew Chuter is the United Kingdom correspondent for Defense News.
