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By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

09 Dec 13. While I admit to having serious reservations I have never talked down the notion of having a Government Owned, Contractor Operated (GOCO) structure involved as a solution for the future of defence procurement in the UK and a successor to the existing and much maligned Defence Equipment and Support (DE&S) operation based at Abbey Wood. However, although at the time of writing the Secretary of State for Defence, Philip Hammond has made no formal announcement, it is expected that he will either today or tomorrow confirm that the MOD’s preferred GOCO solution option for the future of defence procurement is to be removed from the table until at least after the next General Election.

Informed sources have over the past week been telling us that bold plans from the main GOCO protagonist have failed primarily because there was too little interest shown on the part of the private sector. That may well be true and if so then not without very good reason. After all, coming off the back of hard lessons the private sector has been forced to learn failure of the GOCO idea for defence procurement will hardly have surprised that many outside of the MOD. Complicated and challenging as it was the bottom line is that whatever the merits of a GOCO solution might have been they were too far ahead of their time and too full of potential risk for both sides. GOCO, it seems, came with too many strings and far too full of risk. But for all that and while GOCO will be ruled out in favour of a DE&S+ solution for now I see this merely as the end of the beginning for GOCO rather than beginning of the end. At some future point defence procurement along with many other aspects of defence, health, education and maybe other government services too will in the years ahead end up being part privatised.

Back to the GOCO in question. At first there had been three potential bidders, then there were two and then, just three weeks ago, it came down to there being just one consortium that chose to remain. That was to be no criticism on the remaining bidder in this strange and somewhat protracted competition to run Britain’s future defence procurement operation. But having only one bidder would quickly prove to be an insurmountable problem to overcome. For the Secretary of State for Defence, Philip Hammond to have remained with a single bidder solution would not only open himself up to further direct criticism but critically it would leave a huge shadow cast over the future of defence procurement operation.

Keen observers of the DE&S change process change will not have been surprised by the various leaks over the past few days suggesting that for the time being the end was in sight for a GOCO solution. But having trawled through the single 1,200 page submission from the remaining bidder, Material Acquisition Partners, a consortium led by Bechtel, with PA Consulting and PriceWaterhouseCoopers, one may now conclude that the MOD does now have a ‘template’ which they can if desired use to resurrect a GOCO solution.

For the immediate future the procurement plan will be based on DE&S+ a process which is in effect a rigorous and well thought out plan to modernise and to change the whole process of planning and execution of defence procurement but one that will remain wholly owned within the public sector. To work properly DE&S+ will be costly and require the new organisation to imports skills that it currently does not have. Those additional skills will need to be ‘stolen’ from the private sector which means that to succeed and work sufficiently well means DE&S+ will need to pay competitive salaries. The golden rule that ‘if you want quality you have to pay for it’ springs to mind as does something that I was taught a great many years ago “quality is never built as a result of an accident; it will always be as a result of intelligent effort”.

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