ALVIS Vickers Limited has been awarded a prime contract for the Future Command and Liaison Vehicle (FCLV) project by the Ministry of Defence.

The contract, worth £140m, will see the company supply 401 Alvis Vickers MLV vehicles, and includes an option for up to 400 additional vehicles.

The total value of the project is likely to be increased significantly by the support arrangements, the details of which have yet to be finalised.

The contract follows the selection of Alvis Vickers as preferred bidder for the project, announced on July 17.

The company said last night that it had yet to decide where production would take place, but the manufacturing phase will not start until 2006.

Alvis Vickers employs 500 in Telford and a similar number in Newcastle, and has a centre of excellence for electronic and systems technology in Leeds employing approximately 100.

The company announced a second deal yesterday. It has signed a separate sub-contract with Iveco SpA to supply vehicle sub-assemblies.

The deal cements the agreement between Alvis Vickers and Iveco to provide vehicles jointly for the FCLV programme. Earlier this year, Alvis Vickers and Iveco signed an exclusive co-operative marketing agreement for the MLV project.

Trevor Harrison, managing director of Alvis Vickers, said: "The FCLV programme provides a baseline of work for Alvis Vickers through to at least 2009.

"The British Army extensively tested the MLV last year against very stiff competition and UK MoD's endorsement of MLV will provide an excellent launch for the product into the export market place."