LONDON — The key vehicle in a £3.5 billion (US $5.3 billion) program to re-equip the British Army with a new generation of armored Scout vehicles passed its critical design review (CDR), the Defence Ministry said on Tuesday.

The design and integration of the Scout reconnaissance vehicle met its critical design review date of Jan. 30, a ministry spokesman confirmed.

General Dynamics UK was awarded a £3.5 billion deal in September to deliver 589 Scout specialist vehicles (Scout SVs) to the Army starting in 2017.

At the heart of that requirement is the new reconnaissance vehicle, but the family will also include command and control, engineering reconnaissance, protected mobility reconnaissance support (PMRS) as well as repair and recovery variants, all using a common base platform.

The production deal, announced to coincide with the start of the British-hosted NATO Summit, was signed even though the complex turreted reconnaissance version of the vehicle had not at that stage passed its CDR.

Some industry executives here said at the time it was a risky way to do business.

Bernard Gray, the chief of defense materiel at the MoD's Defence Equipment & Support (DE&S) procurement arm, disagreed.

He told Defense News in an interview that the government had a significant contract to protect taxpayers in the event things went wrong and DE&S had been able to strike a "very, very favorable" deal by signing the contract sooner rather than later.

With the British defense budget threatened by further cuts the other side of the May 7 general election, sealing the deal early also has the effect of locking down the program for the Army.

The next key milestone, what the British MoD calls the next "anchor milestone," is the system critical design review, due for completion by the middle of this year.

That review is the point at which the design of the initial vehicle types is reviewed and then chilled ahead of vehicle trials.

The process covers PMRS, Scout reconnaissance, equipment support repair and equipment support recovery variants.

The spokesman said an anchor milestone can be a point at which a decision is made whether or not to continue the contract.

The reconnaissance version of Scout will replace a fleet of old CVR(T) vehicles now used by the British Army.

The tracked reconnaissance vehicle with its digital architecture and a range of new generation sensors also comes fitted with the new CTAI-developed 40mm cannon, which uniquely uses case-telescoped ammunition developed by the BAE/Nexter gun joint venture.

The turret for the reconnaissance version of Scout is being developed and integrated by Lockheed Martin UK.

Lockheed Martin is also the prime contractor on the British Army's other major armored vehicles program involving the £1 billion update of Warrior infantry fighting vehicles. That deal also involves the development and integration of a new turret using the CTAI cannon.

The reconnaissance version of the Scout SV family, which passed its CDR a few days ago, is the key element of a program that will eventually deliver six variants to equip three British Army brigades by the time full operating capability is planned to be reached in 2025.

Scout has a planned initial operating capability of July 2020 and the first converted brigade will be deployable by the end of that year, the MoD spokesman said.

Kevin Connell, vice president at General Dynamics UK-Land Systems, said meeting the CDR is a major step forward in delivering the program.

"Completion of the Scout reconnaissance variant CDR is a significant step in delivering a family of Scout SV platforms, which represent the future of armored fighting vehicles for the British Army," Connell said.

"The reconnaissance variant is the flagship of the Scout SV program and will provide a step-change in ground-based ISTAR capability to the British Army," he said.

General Dynamics has been working since mid-2010 on a £500 million demonstration phase contract to upgrade the ASCOD vehicle developed by its European land systems operation into the Scout SV family.

The protected mobility reconnaissance support vehicle passed its CDR last year and will be the first variant delivered to the British Army

Norway's Kongsberg announced last week it had signed a £61 million deal with General Dynamics to deliver its Protector remote weapon system starting late next year.

Protector will be available for fitting to all Scout SV platform variants, Kongsberg said.