Question to the Ministry of Defence:

To ask the Secretary of State for Defence, whether his Department has ever awarded a contract to an insolvent company.

The Ministry of Defence assesses the legal and financial status of a company before a contract is awarded and monitors the financial health and performance of the company throughout the contract, taking action as appropriate.

It would not be normal for a contract to be placed with an insolvent company. However, if there was an overriding need to purchase goods from an insolvent company (for example, it was vital to the operational capability of the armed forces) then a detailed process would be followed, involving legal and financial experts, to evaluate the benefits against the risks before deciding whether to place a contract.

The number of contracts awarded to insolvent companies is not held centrally and this data can be obtained only at disproportionate cost.