Better Defence Acquisition

Peter Bone Excerpts

Monday 10th June 2013 Commons Chamber

[Mr Hammond]

We have an active policy of encouraging the engagement of SMEs in the defence supply chain and it includes many thousands of SMEs. The single-source pricing regulations will apply throughout the supply chain, but will have a price threshold. We expect almost all SMEs not to be directly affected because their level of transactions with the MOD will fall below the price threshold. The threshold is yet to be determined, but it is likely to be about £5 million.

[Mr Peter Bone (Wellingborough) (Con)]

I thank the excellent Secretary of State for coming to the House and making this statement. One problem that I have seen with defence procurement is not the way in which equipment has been procured, but the decision by the Ministry of Defence at the beginning of the process to have something more than the standard package. There was the nonsense with the Chinook aircraft, which were bought but never flew because the Department wanted to add to them. Will there be more emphasis on buying standard packages?

[Mr Hammond]

That depends on what we are buying. Clearly, there are things that we can buy off the shelf or from competitive international providers. We recently ordered the new fleet of MARS—military afloat reach and sustainability—refuelling tankers from a South Korean shipyard. That decision did not go down well with everybody, but it was sensible procurement. At the same time, we have to maintain important capabilities that are essential to our national sovereignty here in the UK. In those cases, we have to support the indigenous industry. One purpose of the changes is to make transparent the costs that are driven into a project by the specification of bespoke requirements and to force the customers to recognise those costs.