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BAE signs £486 million logistics contract

By: David Howells
19 August 2011

BAE has signed up logistics firm Xchanging in a deal worth a reported £486 million.

The contract, which runs until July 2018, will see Xchanging provide BAE with indirect sourcing and supply chain management in their IT, transport, contract labour, industrial supplies and services sectors. It will also provide procurement management, including reporting, supplier and contract management, logisticsmanager.com reports.

A caveat in the contract claims that once it has run out, there is the option to continue for a further three years provided both parties agree to.

It is expected that with such a large contract and the undertaking Xchanging have on the cards, it will be just a matter of time before the company begins advertising for logistics recruitment to complete the new work.

Speaking of the deal to uk.ibtimes.com, vice president of strategic sourcing at BAE Systems Dennis Bent explained: "We constantly seek opportunities to reduce cost, improve efficiency and increase speed to the market.

"Outsourcing indirect procurement to Xchanging enables us to access top procurement talent supported by a proven approach to sourcing that will provide value to our business."

Adding, Xchanging CEO Ken Lever commented: "We are delighted to extend our relationship with an existing customer.

"This contract not only enables us to deliver value to BAE Systems it also acts as a springboard for Xchanging in the fastest growing procurement outsourcing market globally."

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