The Army’s most important equipment procurement plan, expected to be worth at least £16 billion, is to be overseen by the Franco-American combination of Thales and Boeing, the Ministry of Defence (MoD) revealed yesterday.

The Future Rapid Effect System (FRES) will supply the MoD with a new fleet of more than 3,000 highly mobile, medium-weight armoured vehicles. The project will include maintenance deals spanning up to 40 years that could increase the value of the deal to £60 billion.

The MoD’s decision to name the Thales-Boeing team as the preferred bidder for the key role of System of Systems Integrator (SOSI) is a blow to British rivals BAE, QinetiQ and Ultra Electronics. All three were in the running for the overarching role as members of different consortiums.

The SOSI is responsible for managing the purchase of vehicles and ensuring that they operate and communicate with other military equipment, ranging from satellite systems to fighter jets and warships.

In what is called the “integrated battlespace”, the Thales-Boeing team’s tasks will include overseeing the development of complex technology systems, such as those designed to safeguard against “friendly fire” incidents. Both companies will coordinate their operations from UK bases.

BAE had made its bid as part of a consortium that includes Finmeccanica, of Italy, and General Dynamics, of the US. Ultra Electronics had teamed up with Lockheed Martin.

BAE, which supplied most of Britain’s fleet of armoured vehicles, had already been knocked out of the running to supply the design for the FRES utility variant, the basic troop carrier that is expected to be made in the highest numbers under the scheme.

In June the MoD announced that it had shortlisted General Dynamics’ Piranha V, Nexter’s VBCI (Véhicule Blindé de Combat) and the Artec consortium’s Boxer vehicles to take part in a series of utility vehicle mobility trials, previously known as the “trials of truth”.

Those trials finished last month and the winner will be announced in November.

Lord Drayson, the Defence Minister, said: “The FRES project is the British Army’s highest equipment priority.” He said that the appointment of Thales and Boeing, almost two months ahead of schedule, “demonstrates the excellent progress now being made on FRES”.

The fleet of armoured fighting vehicles will have high levels of protection and will be air-transportable, allowing troops to deploy rapidly across the globe at short notice. They will be charged with carrying British troops to trouble-spots around the world.

Plans call for four vehicle types in 21 variants, for tasks ranging from reconnaissance to road clearing. The first vehicles are expected to be deployed in 2012.

General Sir Richard Dannatt, Chief of the General Staff, said: “This is an important decision, soon to be followed by even more significant FRES announcements, including the selection of the Utility Vehicle Designer.”

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax