Three contractors have been tipped to win framework deals with defence supplier BAe Systems.
Laing, Ballast and Mowlem, which currently undertake about £200m in work for BAe, will be given partnering deals in return for making savings of 20%.

The deal, expected to be rubber-stamped by the client in the autumn, will cover design and maintenance work ranging from £250,000 to £20m.

It is understood that the three contractors have five years to make the 20% savings.

The move is part of a cost-cutting drive by BAe in the wake of its acquisition of Marconi's defence business in 1999, which reduced its profit.

Other areas targeted by the firm have included product buying, catering and security.