German Naval Yards to Sue Government over Multi-billion Dollar Frigate Contract to Damen

German Naval Yards has decided to sue the government over its decision to award a $6.7 (€6 billion) dollar frigate contract to Damen.

Naval Yards had teamed with ThyssenKrupp Marine Systems (TKMS) to bid for the contract that includes building four MKS 180 Multi-Purpose Combat ships. Also vying for the deal was Damen, that joined hands with Lürssen Group or Blohm+Voss, and Thales.

"German Naval Yards has submitted relevant documents to the Ministry of Defense to stop the contract award to Damen," sources were quoted as saying by Germany's Handelsblatt newspaper on Monday.

Damen announced on January 14 that the German government selected the firm as the main contractor to supply the boats to the German Navy, adding that the final decision still "awaits parliamentary approval."

Following this, German Naval Yards reportedly accused the government for selecting Damen, claiming that €5.3 billion of the contract money will flow to the Dutch company, which accounts for nearly 88% of the €6 billion frigate deal. In addition, the company also accused the government of not providing any compensation for the double-digit million amount it spent on preparatory work pertaining to the project.

Contradicting Naval Yards' claims, Damen said in the earlier statement, that it plans to "spend around 80% of the total net investment as added value in Germany."

"The ships will be built at Blohm + Voss shipyard in Hamburg and at other shipyard locations of the North German Lürssen Group. Damen intends to build in this way in order to spend around 80% of the total net investment as added value in Germany. The same applies to the electronic application systems that are supplied by Thales Nederland to its own design. Around 70% of the services will be provided by the German subsidiary of Thales and by other German subcontractors," Damen said.