21 Nov 13. The Defence Committee published the following Special Report on Thursday 21 November: The Defence Implications of Possible Scottish Independence: Government Response to the Committee’s Sixth Report of Session 2013–14 as its Ninth Special Report of Session 2013–14, HC 839. The Special Report can be viewed here under Responses to Reports from 11 am: http://www.parliament.uk/business/committees/committees-a-z/commons-select/defence-committee/publications/
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House of Lords Thursday 21 Nov 2013

Defence: Procurement

Asked by Lord Lee of Trafford: To ask Her Majesty’s Government, in the light of the withdrawal of a private-sector bidder from plans to manage defence procurement through a government-owned, contractor-operated organisation, whether they have any plans to close off that option.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con): My Lords, a review is under way to assess two options—a government-owned, contractor-operated entity and a transformed DE&S+, remaining in the public sector. We remain convinced that we absolutely must change our process to deliver the best value for money for the taxpayer and enable the right equipment and support to be delivered on time for our Armed Forces. The status quo is simply not acceptable.

Lord Lee of Trafford (LD): My Lords, is the reality not that the GOCO competition concept is now totally dead in the water? It is quite impossible to run a competition with just one bidder. The very fact that this one bidder, the Bechtel consortium, has a bid in of 1,200 pages surely draws attention to the manifest absurdity and complexity of the bid process. This concept has been driven through by Bernard Gray with very little support in MoD and the services; should not he now, in the circumstances, given that it has collapsed, consider his own position and consider resigning? But is not the real culprit the Treasury, whose bone-headed attitude over the years has restricted the MoD in employing the quality of people from the private sector, bringing in private sector disciplines, to handle and manage our £14 billion procurement budget properly? So is not DE&S+ the answer, as supported by many noble Lords, including the noble Lords, Lord Levene and Lord West, who sadly cannot be here today?

Lord Astor of Hever: My Lords, on my noble friend’s first point, the very fact that one commercial bid team has submitted a bid shows that it believes that there is a potential deal and it can deliver against requirement. We have always known that running a defence acquisition would be challenging, which is one reason for testing through the assessment phase whether it can be done. As for my noble friend’s second point, he is right to recognise the specific needs of defence acquisition and support personnel to match the professionally motivated defence industry. That is why we are very clear that, whatever option we choose, we will need to work with colleagues across relevant departments to put in place the necessary freedoms of operation to provide our Armed Forces with the right kit at the right time and deliver the best value for money for the taxpayer.

Lord Touhig (Lab): The only outside bidder left in this process is a consortium led by Bechtel, a company with a litany of mismanagement of public service contracts, from Iraq to Romania to the United States. In Boston, for instance, it was responsible for the Big Dig, a tunnel construction project that went $1 billion over budget—and two-thirds of the problem was down to its mistakes. Given its mismanagement of the Big Dig, if Bechtel gains control of our defence procurement, will not Britain’s defences end up in a big hole?

Lord Astor of Hever: My Lords, the answer is no. The materiel acquisition partner’s team comprises Bechtel, as the noble Lord says, Pricewaterh