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QinetiQ agrees interim pricing deal with MoD
QinetiQ said it agreed an interim pricing deal with the Ministry of Defence for its biggest contract while the two sides negotiate how much the company will charge to manage 15 sites.
The defence technology contractor said the interim arrangement under existing terms of the £300m-a-year contract would last a year from 1 April. The 25-year contract lasts until 2028 and has price reviews every five years.
QinetiQ and the MoD will use the time to negotiate terms for QinetiQ to operate and manage 15 sites and facilities not included in an amendment agreed in December 2016. QinetiQ said it was confident about successfully concluding talks within the 12-month timeframe.
The company said: "Given the number of the facilities involved in the discussions, QinetiQ and the MoD have developed an interim pricing arrangement for twelve months beginning 1 April 2018, covering QinetiQ's continued delivery of test, evaluation and training support services."
The company's shares rose 1.8% to 204p at 08:06 GMT.
QinetiQ, which was spun out of the government's former Defence Evaluation and Research Agency in 2001, also said it was the sole bidder negotiating with the MoD for an engineering contract that on which it will work with Atkins and BMT. In a trading update in February the company said it was bidding for a number of new opportunities with the UK government, whose defence budget is under pressure.
The FTSE 250 company announced the arrangement as it reported trading in the final quarter of its financial year in line with expectations. It will publish results for the year to the end of March on 24 May.