Vickers' last shot at tank bid

VICKERS is making a last-ditch effort to stay in the running for a contract to manufacture Europe's next generation of wheeled armoured vehicles by proposing that the rival consortiums should each develop a prototype before a decision is made.

Vickers accused the UK's defence procurement agency of abrogating its responsibility by handing over decision-making to Germany where, it says, domestic political concerns are dictating a hasty decision ahead of German elections.

There has been speculation that BWB, the German defence procurement agency, is about to award the multi-billion-pound contract to a rival group which includes GKN and the German companies Krauss Maffei, Rheinmetall AG, MaK and Wegmann.

"For the UK to be rushed, purely to fit in with Germany's industrial ambitions and parliamentary timetables, just strikes us as crazy," said Brian Trueman, general manager of business development at Vickers Defence Systems. He said the vehicle is not due to come into service in the UK until 2006.

The contract, for as many as 6,000 vehicles for the German, British and French armies, is regarded as key to defining the future of Europe's wheeled armoured vehicle industry.

After airing his concerns with the procurement executive at the Ministry of Defence, Vickers Defence Systems chief executive Colin Clark received a reply saying that "any matters relating to the competition should be raised with the BWB".

The contract is a litmus test for European co-operation as the defence sector faces competition from fewer, larger players from the US. Europe's market is worth about pounds 1.5bn a year and is pretty crowded, with more than 20 companies able to produce armoured vehicles.

Vickers, which is bidding with Alvis, Germany's Henschel Wehrtechnik and Kuka Wehrtechnik, and France's Panhard, is proposing that both groups are given small contracts to develop a prototype rather than risk making a decision based on a "paper proposal".

It has yet to receive a definitive reply from the BWB. However, it sees the delayed decision - it had been expected earlier this month - as a positive sign.

Vickers, which owns Rolls-Royce Motor Cars, got into a tangle on the contract earlier this year after reports said Germany was favouring an eight-wheeled vehicle designed by the GKN group. Vickers complained that it had been asked to design a six-wheeler. GKN said bidders were asked to design the most suitable vehicle, and were not restricted on number of wheels.

The German procurement agency has declined to examine a late bid by Vickers for an eight-wheeled vehicle, which Vickers claims would be DM50m (pounds 17m) cheaper than the GKN proposal for the initial contract for 600 vehicles. BWB said Vickers had missed the deadline.