16APR

UK awards Tekever up to £400m for AR5

3 min read

14:27UTC

Britain's Watchkeeper successor went to Tekever without a contest after the tender drew no compliant bids, at more than double the ministry's estimate.

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Key takeaway

Britain's Watchkeeper replacement went to Tekever without competition, at more than double the tender estimate.

The UK Ministry of Defence awarded Tekever a contract worth up to £400 million on 16 September for the AR5 surveillance drone, which replaces the British Army's Watchkeeper⁠¹. Tekever is a Portuguese drone maker with a factory in Swindon. Six aircraft come first, rising to as many as 24 by 2029. When the ministry tendered the work as Project Corvus in May, it estimated £130m to £156m excluding VAT.

FlightGlobal reported in July that the competition drew no compliant bids, and that the ministry moved to a sole-source award to Tekever worth £336m excluding value added tax (VAT)⁠². On those figures the sole-source price is more than double the top of the ministry's tender estimate. Lowdown's reading, which the ministry has not confirmed, is that £336m plus 20 per cent VAT gives roughly the ceiling now published. Neither document shows whether the award's scope and options match those tendered in May.

A tender with no compliant bid leaves the ministry negotiating with a single firm. Corvus is one of the programmes folded into Britain's £5bn drone and autonomy plan, which assumes a supplier base deep enough to compete on price, and it closed without a contest.

A separate £16m buy under Project Rapstone brings in 1,025 small drones from three suppliers. The largest share, 670 X10 drones, comes from Skydio, an American maker, through Marlborough Communications; Evolve Dynamics and Brigantes Consulting supply the rest. China sanctioned Skydio on 11 October 2024, cutting it off from Chinese battery cells⁠³, so most of Rapstone's drones come from a maker whose supply chain Beijing has already squeezed.

Deep Analysis

In plain English

The British Army has flown a surveillance drone called Watchkeeper since 2014. It is being replaced by the AR5, made by Tekever, a Portuguese company with factories in Britain. The Ministry of Defence first tried to run a contest between firms. No company put in a bid that met the rules, so the ministry negotiated with Tekever directly. The final contract can be worth up to £400 million, much more than the ministry first expected to pay. In a separate deal, the army is buying about a thousand small drones for its soldiers to carry.

Deep Analysis

Root Causes

Britain has few makers of army surveillance drones. Tekever had already built a position: £270 million of earlier separate ministry contracts and a 254,000 sq ft factory in Swindon . A rival entering late had to match an incumbent with a plant already in Britain.

A tender priced at £130m to £156m also left little room for firms to bid compliant offers for a long-endurance drone fleet over five years. When every bid fails, the rules let the buyer negotiate with one supplier, and the ministry did.

What could happen next?

Risk
A sole-source price well above the estimate invites scrutiny of other programmes in the £5bn drone plan.
Consequence
Tekever's Swindon plant becomes the British Army's main source of long-endurance surveillance drones for the rest of the decade.

Source Landscape

This story draws on neutral-leaning sources from United States

United States

Primary parallel: In the same weeks Belgium and the Netherlands bought drones and interceptors without prior competition under EU urgency rules. Britain reached the same single-supplier result by another path: an open tender that failed, followed by a negotiation with one firm.

Counter-parallel: Project NYX, the ministry's loyal-wingman effort for Apache helicopters, kept four bidders in play, Anduril, BAE Systems, Tekever and Thales UK, through a £10 million assessment phase (ID:3740). That design keeps several firms competing until the production decision, which Corvus failed to do.

The contract runs for five years, per FlightGlobal. Its value depends on how many of the options the ministry exercises between the first six aircraft and the full fleet.

On Rapstone, Lowdown's calculation from the ministry's figures gives an average of about £15,600 a drone across three types. The mix includes 245 sub-250g Foxe-NATO drones from Evolve Dynamics and 110 SONORA training drones from Brigantes Consulting and Harmattan AI. The average mixes training kit and combat-grade quadcopters, so it is not a unit price for any one model.

Consensus view: The Ministry of Defence presents the award as an industrial win. It says the deal supports more than 1,000 jobs by 2030 across Tekever's UK sites, from Swindon and Bristol to Lydd, Edinburgh and West Wales Airport. On that reading the price buys a domestic drone base as well as aircraft.

Counter-view: FlightGlobal's reporting shows the mechanism that set the price: with no compliant bid, the ministry lost its only lever on cost. Lowdown's comparison puts the ceiling at roughly 2.2 to 2.6 times the tender estimate, a rise no competitor was present to restrain.

Key tension: Whether a jobs pledge from a single supplier is worth the price discipline that a contest would have imposed.

First Reported In

Update #18 · Four EU states skip tenders on drone defence

UK Ministry of Defence· 1 Oct 2026

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Causes and effects

Caused by

UK tenders £130M Watchkeeper swap

The Project Corvus tender drew no compliant bids and led to the sole-source AR5 award to Tekever.

Occurred 1 May 2026

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£5bn UK drone plan follows Healey exit

The AR5 and RAPSTONE buys spend from Britain's £5bn drone and autonomy plan.

Occurred 28 Jun 2026

Read story →

This Event

UK awards Tekever up to £400m for AR5

The British Army's next surveillance drone was bought through a single-supplier negotiation priced well above the ministry's own estimate.

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Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.