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‘There are lies, damn lies and job creation estimates. When it comes to
military procurement contracts, there is also the fog of war.’ Independent, 14 October 2004 (extract)

There are lies, damn lies and job creation estimates. When it comes to military procurement contracts, there is also the fog of war. While it would be unfair to say that truth was the first casualty of the £1bn battle to supply the Army with 5,000 new cargo trucks, it appears that someone, somewhere has been economical with the actualité.

The Birmingham-based van maker LDV is furious with the Defence Procurement minister Lord Bach for awarding the contract to none other than a German company. In its anger, LDV has managed to stop short of mentioning the war, but only just. According to LDV, the consortium it was involved in, although US-led, would have offered the best outcome by a long way for UK jobs and UK industry. It has even persuaded two union leaders to believe it, too.

Not so, thunders Lord Bach, who just in case you suspected a connection, is totally unrelated to the 18th-century German composer of the same name. To Lord Bach’s mind, the LDV bid came in a poor second on all counts – job creation, cost and capability – to the reliable Germans at MAN ERF. MoD sources add that this was partly because the British component of the LDV bid was secretly watered down in order to make it more competitive. According to the MoD, the LDV bid would not, as claimed, have created 600 new British jobs.

Sources at Whitehall said the rival bid from a consortium featuring the
Birmingham-based van producer LDV, Lex Defence and the Yorkshire-based Multidrive was secretly amended last December to reduce the amount of UK industrial participation involved.

LDV reacted angrily when the MoD awarded the order for 5,000 trucks – the biggest UK military vehicle contract for 25 years – to MAN ERF, a German manufacturer. Half the contract will be carried out in Austria. LDV said the MoD had missed the chance to recreate a strategic manufacturing capability in the UK and secure more than 600 new jobs.

However, officials at the MoD countered that, as a result of the way the LDV bid was secretly amended, it would have created only 300 jobs and not the 600 which the consortium claimed. Although the LDV consortium was led by the US military truck supplier Stewart & Stevenson, its bid was backed by the leaders of the Transport and General Workers’ Union and Amicus expressly on the basis that it would have created the most jobs and was best for British industry.

For good measure, the MoD also takes a pot shot at the other unsuccessful bidder, the US truck maker, Oshkosh, for claiming that its truck would have offered the best performance and value for money, as well as 600 jobs in the Welsh valleys. Au contraire, says Lord Bach, the bid was not even compliant.

The outcome of military procurement contests are more often than not decided on who manages to cloak themselves most heavily in the Union flag. Pork barrel politics also frequently play a big part. Battles are won as much in the arena of public relations as hard fact. The truck order is one of those rare occasions where hard nosed commercial decision making seems, for a change, to have ruled the day.

Lord Bach’s irritation with the losing bidders is understandable, when the MoD thinks it has worked so hard to produce a solution which balances the interests of job creation and operational requirements. But in venting his anger at the half truths propagated by LDV, Lord Bach cannot afford to alienate unsuccessful bidders too far. He needs these people as much as they need him. Competitive tendering for MoD contracts is widely regarded, outside the defence industry at least, as a charade. To work, it has to be seen as fair, transparent, and worthwhile.

In a letter to The Independent today, the Defence Procurement Minister Lord Bach of Lutterworth makes a strong defence of the decision to award the c

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