MoD to invite smaller firms to bid

3 March 2005
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03 March 2005 | David Arminas

The Ministry of Defence may open up some of its tenders to smaller companies in an attempt to reduce the financial burdens and delays that current arrangements impose on contractors.

The ministry is considering inviting smaller firms to bid for its private finance initiative (PFI) contracts and has established a unit to monitor and review this form of procurement. It currently has 17 PFI projects worth £8 billion.

Nick Prior, director of the unit, told SM that a decision has not been made on the timing, but explained the thinking.

"There has been a tendency for the PFI contracts to be too big and complex," he said.

They also risked putting contractors out of business.

"We will look at having future PFI contacts as more financially manageable segments."

The Society of British Aerospace Companies, the national trade association of the UK aerospace industry, welcomed the MoD's decision.

"Most companies will be happy with the news," said a spokesman. "Especially smaller firms with less financial resources that would see their opportunities increase for MoD work."


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