Defence: Procurement

Lord Lee of Trafford Excerpts

Thursday 21st November 2013 Lords Chamber

Asked by

[Lord Lee of Trafford]

To ask Her Majesty’s Government, in the light of the withdrawal of a private-sector bidder from plans to manage defence procurement through a government-owned, contractor-operated organisation, whether they have any plans to close off that option.

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)]

My Lords, a review is under way to assess two options—a government-owned, contractor-operated entity and a transformed DE&S+, remaining in the public sector. We remain convinced that we absolutely must change our process to deliver the best value for money for the taxpayer and enable the right equipment and support to be delivered on time for our Armed Forces. The status quo is simply not acceptable.

[Lord Lee of Trafford (LD)]

My Lords, is the reality not that the GOCO competition concept is now totally dead in the water? It is quite impossible to run a competition with just one bidder. The very fact that this one bidder, the Bechtel consortium, has a bid in of 1,200 pages surely draws attention to the manifest absurdity and complexity of the bid process.

This concept has been driven through by Bernard Gray with very little support in MoD and the services; should not he now, in the circumstances, given that it has collapsed, consider his own position and consider resigning? But is not the real culprit the Treasury, whose bone-headed attitude over the years has restricted the MoD in employing the quality of people from the private sector, bringing in private sector disciplines, to handle and manage our £14 billion procurement budget properly? So is not DE&S+ the answer, as supported by many noble Lords, including the noble Lords, Lord Levene and Lord West, who sadly cannot be here today?

[Lord Astor of Hever]

My Lords, on my noble friend’s first point, the very fact that one commercial bid team has submitted a bid shows that it believes that there is a potential deal and it can deliver against requirement. We have always known that running a defence acquisition would be challenging, which is one reason for testing through the assessment phase whether it can be done. As for my noble friend’s second point, he is right to recognise the specific needs of defence acquisition and support personnel to match the professionally motivated defence industry. That is why we are very clear that, whatever option we choose, we will need to work with colleagues across relevant departments to put in place the necessary freedoms of operation to provide our Armed Forces with the right kit at the right time and deliver the best value for money for the taxpayer.