Surely if the VAT cost to the MOD is the only reason for not awarding to a different contractor, Gordon Brown should simply take the VAT and add it to the MOD budget.

H, High Wycombe, UK

Richard Branson is probably the only Brit with the proven management skills to bring this in on time and under budget. The rest of UK senior management and politicians have been proven over and again to be utterly useless, yes, totally useless.

Bob, Carlsbad, California, USA

If you take the Nimrod Contract and apply 4%pa, which is roughly RPI, over the 6 year delay then the answer is approx £3.5bn so the gripe should be not the price increase but the delay. 6 years is a ridiculas delay and it would be more news worthy to know why the delay has occurred - I suspect changing specification by the MOD but the answer seems to be a secret

Stead, London, England

Peter from Stoke,

One of the main reasons the Nimrod and Astute projects overran on cost is that the customer (MoD) changed the technical requirements and caused massive design change work. Therefore BAE charged accordingly.

.... As well as BAE being a lot sharper than the Government!

Neil, Portsmouth, G.B

Surely it is time to throw away our current MOD equipment procurement system in it's entirety. We have purchased second rate ships and other equipment for as long as I can remember (I served 38 years in the RN) at vastly over inflated prices. During my service, I visited many ships of other nations and was often amazed at how well built and well armed they were compared to the more expensive RN equivalent. All around the world, we were 'outgunned' by 3rd world navies who had purchased weapons 'off the shelf' from the USA or wherever. We cannot conceive, design, contract for and build cost effectively using indiginous MOD / British companies and obtain value for money. It is now time to bite the bullet and simply purchase from other nations who can do it so much better than us.

Master & Commander, Sarlat , France

Doesn't the MOD enough funding problems that they must resort to such contractual contortions to avoid taxes?

Jiimy, Chicago, Il

Paying tax is obviously a smokescreen. The MoD pays the treasury, and the treasury puts the money back to MoD. So what? Sounds like the budget is already over the top.

Mike, Sydney,

What every happened too tenders.
Once awarded, you stuck to the order, if over run you paid penalties, not the tax payer, was I sleeping when the rules where changed....!

Peter, Stoke, UK

How can the MoD, part of the Crown, "avoid" paying tax to the Crown?

It would be in effect avoiding paying tax to itself - a net zero transaction.

It would seem that the MoD and the Treasury have totally lost the plot, yet again.

At BAE its Chateau Petrus for elevenses until Whitsuntide 2012.

nigel foster, ryde, uk

Yet again, chuffing BAE getting all our money, boats will be ten years late and double the cost....do i need to say any more

Aaron, Bath,