09 May 2002 | Robin Parker
The Ministry of Defence (MoD) is failing to make full use of competitive procurement for the repair of armed forces' land vehicles, the National Audit Office (NAO) has warned.
Only 17 per cent of repair lines in projects studied by the NAO in its report, Major Repair and Overhaul of Land Equipment, were awarded through formal competition.
The MoD's Army Base Repair Organisation (ABRO), which handles most of its major repair and overhaul workload, won just 2 per cent of its work through competition.
Where lines were dually sourced between industry and ABRO, the MoD allocated work on the basis of repairers' estimates for a single item rather than hold full competitions.
The MoD established ABRO as a trading fund last month, and aims to complete 30 per cent of the organisation's workload within three years as a commercial body.
But the NAO says that as competition increases, much of ABRO's work could be won by private industry and it will be forced to put up the price of its remaining work.
A Defence Logistics Organisation spokesman said ABRO's move to trading fund status would gradually improve its freedom to compete for land equipment support business.
"It will enable the MoD to have a clearer customer-supplier relationship and it will set its prices as it sees fit," he said.