Despite facing strong objections from competitor Thyssenkrupp Marine Systems (TKMS), Naval Group has successfully retained the contract to build four Barracuda-class submarines for the Netherlands Ministry of Defence.
The District Court of The Hague ruled in favour of the State’s decision, rejecting TKMS’s call to reevaluate the procurement process.
In a legal battle that could have disrupted the major defence contract, the District Court of The Hague ruled on 24 July, 2024, that the Ministry of Defence’s decision to award the construction of four submarines to Naval Group would stand.
The ruling came despite objections from rival bidder Thyssenkrupp Marine Systems (TKMS), which had sought to overturn the decision.
The Ministry of Defence had originally organised a competitive procurement procedure, allowing three candidates to submit offers for the submarine construction project. After assessment, the Ministry awarded the contract to Naval Group.
Following this, TKMS initiated summary proceedings, arguing that its own bid had been unjustly invalidated and that the offers from Naval Group and Saab Kockums AB, the other competitor, should not have been deemed valid.
TKMS’s legal challenge aimed to either compel the Ministry to repeat part of the procurement process with amendments, or to conduct further investigations before making a new award decision. However, the interim relief judge found that the State had valid reasons for declaring TKMS’s registration invalid and dismissed the claims that Naval Group’s offer had procedural flaws.
The court’s decision was made after a closed-door hearing on 26 June, 2024, due to the sensitive nature of the information involved.
The third leading supplier of submarines in Europe will be the Naval Group, which is set to hold a 21.9% share of the European market over 2023–33, according to GlobalData’s “The Global Submarine Market 2023-2033” report.
This ruling is a victory for the Naval Group, solidifying its role as a player in Europe’s naval defence industry.
However, Thyssenkrupp Marine Systems (TKMS) still has a role to play in European naval defence. In 2021, TKMS was awarded a €5.5bn ($6bn) contract to build six Type 212 Common Design (CD) submarines, two for Germany and four for Norway. Deliveries to Norway are expected to start in 2029, with Germany expected in 2032 and 2034.
The project, crucial for the modernisation of the Ministry of Defence’s naval capabilities, can now proceed without further legal hindrances, ensuring that the timeline for the delivery of the submarines remains on track.
