Ministry of Defence (Procurement)

Debate between Stephen Gilbert and Gordon Henderson

Wednesday 19th October 2011 Westminster Hall

[Gordon Henderson]

I thank my hon. Friend for his intervention. He is right, and I will come to that when referring to a contractor in my constituency whose situation reflects, in a slightly different way, the difficulties facing suppliers. I hope that he will bear with me.

I have no faith in the MOD securing a good deal for taxpayers, and I will highlight as an example a couple of contracts, the negotiation of which can best be described as nonsensical. I recently visited the 2nd Royal Tank Regiment at its Tidworth camp in Hampshire. I toured the armoured vehicle repair shop and noticed that one of the lifting ramps was cordoned off. When I asked why, I was told that the ramp had been out of order for a couple of weeks, and that although the on-site mechanics could repair it, as would be expected from REME personnel, they were not allowed to because the contract for the equipment required outside contractors to be called in, and the regiment was having trouble getting those contractors in. The bureaucracy involved in applying for the contractors to do the work was not only taking up a lot of time, but was a lot of work. That is idiotic.

While at Tidworth, I saw another example of idiocy. The problem, which is only a small one, is in the sergeants’ mess, but I have no reason to think that this is not replicated in all messes throughout the armed forces. The range of beers on offer is limited to brands determined by the private company that runs those messes, and if that is not bad enough for beer drinkers, the corporals are even worse off, because the contract does not recognise that corporals have a mess. It recognises only officers’ messes and sergeants’ messes. The corporals must pay almost double the price for beer as sergeants. In the grand scheme of things this is a small issue, but such small niggling issues chip away at the morale of our service personnel, yet they are so easy to resolve with the right contracts and the right negotiation.

I turn now to a specific procurement problem that affected a company in my constituency. The company wanted to bid for MOD work, but the tender document was drafted in such a way that compliance was impossible for any company except the existing supplier. The products that my constituents wanted met all the relevant quality and safety standards, and all the tender conditions except one. The tender document required proof of field trials carried out in Desert Storm warfare conditions. That condition could, of course, be met only by the company that supplied the equipment during that conflict. My constituent was not best pleased and, understandably, believes that the tender document was written not by the MOD, but by the supplier of the original equipment. I am slightly more charitable, and inclined to believe that the MOD staff who drafted the tender document simply did not consider the ramifications of what they were writing, and what the consequences would be.

I want to finish with a confession. I know something about MOD negotiators, because I worked for 15 years as a senior contracts officer for GEC Marconi Avionics. I spent my time running rings round MOD staff while negotiating various defence contracts. That is the problem and the solution all in one. The MOD needs people with a sound commercial background, the desire to get as good a deal for the taxpayer as they would if they were still working for a private company, and a financial incentive if they succeed.

[Stephen Gilbert (St Austell and Newquay) (LD)]

I congratulate my hon. Friend on securing this debate. He has put his finger on the crux of the matter with his ability to run rings around procurement staff at the MOD. Is part of the problem the fact that procurement staff in the Ministry rotate, and would a more professional, stable procurement service go some way to solving the problems that he has outlined so eloquently?

[Gordon Henderson]

I welcome that intervention. My hon. Friend is right because that is half the problem. However, my experience of running rings around staff during negotiations does not apply only to MOD staff; I have also negotiated with staff from the Department of Defence in America and with Canadian defence staff and they are all the same. They are civil servants who have no interest or background in commercial matters. They are negotiating with taxpayers’ money, which does not come out of their pockets or affect their profits. They have no incentive.