Oral Answers to Questions

Debate between Philip Dunne and Jim Cunningham

Monday 2nd September 2013 Commons Chamber

[Mr Jim Cunningham (Coventry South) (Lab)]

7. What progress his Department has made in the assessment phase for reform of Defence Equipment and Support.

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

The Department continues to make good progress in the assessment phase for the reform of Defence Equipment and Support. As the hon. Gentleman is aware, we are testing a GoCo—Government owned, contractor operated—model in the market. Separately, we are working up the best public sector option we can, which we are referring to as DE&S-plus. The commercial competition for a GoCo provider is well under way and I am pleased to confirm that two consortia are participating in this work. The invitation to negotiate was issued to each on 24 July and officials have commenced negotiations to develop the GoCo option in more detail.

[Mr Cunningham]

Under the current plans, the MOD would be liable for claims against the contractor should a GoCo model be chosen, meaning that the taxpayer takes a large amount of risk. Would the MOD consider making the contractor liable for all claims instead?

[Mr Dunne]

The MOD is in the early stages of negotiations on the contract for a GoCo and, as I have said, is at the same time working up a DE&S-plus option. We will not make a decision until we have received bids from the consortia, which we expect to conclude in the spring of next year, and we will compare that against the DE&S-plus option. Only at that point will it be appropriate to consider the question that the hon. Gentleman asks.