The federal government is pushing ahead with frigate procurement from TKMS – Damen Naval is demanding billions

The Budget Committee should clear the way for the next order to TKMS this Wednesday. But one competitor doesn't want to admit defeat yet.

After the failed order to build F-126 frigates, the federal government wants to order four more Meko A-200 frigates from TKMS as an alternative. The Bundestag's budget and defense committees are due to decide on a corresponding financing proposal on Wednesday.

Despite the threat of a legal dispute with the Dutch shipyard group Damen Naval, whose contract to build six F-126s was withdrawn, the federal government is pushing ahead with the procurement of replacements. At the beginning of July, the Budget Committee had already approved the funds for the procurement of a first batch of four Meko A-200s. The German Navy is now to receive a total of eight of the ships.

The Ministry of Defense withdrew the F-126 order from Damen Naval in November 2025 because there had been significant delays. Instead, Rheinmetall subsidiary NVL would have liked to continue the project as the new general contractor and was also in discussions with the Koblenz procurement office BAAINBw about this.

On June 24th of this year, Federal Defense Minister Boris Pistorius surprisingly announced the end of the F-126. He justified the construction stop with the high costs of more than 18 billion euros that would be incurred if the project continued. The original budget was ten billion euros. So far, more than 2.3 billion euros have been invested in the project; a first frigate was under construction at the Peene shipyard in Wolgast and now has to be scrapped.

The company Damen Naval, which is represented by the former CSU politician and lawyer Peter Gauweiler, announced at the beginning of October that it is demanding 4.7 billion euros in damages from the federal government. The sum is contractually agreed payment and indemnity claims due to the breach of contract. The “Süddeutsche Zeitung”, among others, first reported on this.

The law firm Redeker-Sellner-Dahs, also commissioned by Damen, also accuses the federal government of possibly violating EU procurement law because the order from TKMS was made without a prior Europe-wide tender.

There are exceptions to this obligation for the defense sector. However, these must be interpreted narrowly and the federal government must in any case weigh up its interests with the interests of a potential applicant for a contract, according to a letter from the law firm to the Koblenz procurement office BAAINBw, which is available to the Handelsblatt.

Upon request, the Ministry of Defense stated that it “observes the relevant procurement and budgetary requirements for all procurement projects”. “We do not comment on details of the specific justification under procurement law with a view to possible legal proceedings,” said a spokeswoman. They consider Damen Naval’s demands to be “unfounded” and reject them.

Defense Minister Pistorius, for his part, had already announced in June that his house was legally examining claims for damages against Damen Naval. There could be a risk of a long legal battle. There will probably be a first clarifying conversation between the women's lawyers and the BAAINBw on October 21st or 22nd.

Despite the legal imponderables, the Ministry of Defense is pushing ahead with the procurement of the Meko A-200. Germany has promised NATO key anti-submarine defense capabilities for the target year 2029, which were originally intended to be fulfilled by the F-126, a ministry spokesman said on Monday.

Since Damen Naval could not have delivered the first F-126 until 2032 at the earliest instead of 2028 as agreed, the ministry not only had the right but also the obligation to terminate the contract. Because it's about security and being able to protect transatlantic supply routes against Russian submarines in the event of a conflict, the spokesman continued.

The Navy's plan was to have all six F-126 frigates available by 2033. TKMS has committed to handing over the first Meko A-200 to the Navy in 2029. Delivery of the second batch of four ships, for which budget officials are expected to release the money on Wednesday, is scheduled for December 2032 to March 2035.

The first lot costs 6.3 billion euros, the second lot is one billion euros cheaper at 5.3 billion euros. TKMS boss Oliver Burkhard explained in the Handelsblatt interview that competing shipyard groups might also be involved in the construction of the second lot.

The chairman of the defense committee, Thomas Röwekamp (CDU), told the Handelsblatt that from a defense policy perspective it was “right and consistent” to end the F-126 project and rely on the Meko A-200 instead. The defense politician emphasized that mutual claims for damages would now have to be clarified in court if necessary. “So far, I have full confidence in the Defense Ministry’s assessment that our legal position is robust.”