Government gives green light to outsource defence procurement

18 July 2012

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18 July 2012 | Adam Leach

Defence secretary Phillip Hammond has instructed the Ministry of Defence to focus its efforts on “developing and testing” a government-owned, contractor-operated (GOCO) entity to carry out procurement.

Last year, chief of defence materiel Bernard Gray published a report outlining options for making Defence, Equipment and Support (DE&S) – the military’s procurement organisation. The two ideas that emerged as the leading choices were the GOCO model and creating a partnership between an executive, non-departmental public body (ENDPB) and a strategic partner.

In a written ministerial statement published today, Hammond confirmed the government’s preference. He said: “The work done to date, suggests that the strategic case for the GOCO option is stronger than ENDPB option.” He explained that further value-for-money work is underway, but had asked that the ministry “focus its effort on developing and testing the GOCO option further”.

The MoD will carry out the tests over the next few months, while also developing a commercial strategy for the option. The findings of the tests will inform it whether to push ahead fully with the GOCO and launch a competition for the contract of running it.

The opposition Labour party responded to the announcement by voicing concern that outsourcing some of the work to the private sector would diminish accountability and transparency.

Alison Seabeck MP, shadow defence minister, said: “We worry that these proposals could weaken accountability and ministers have important questions to answer. We must have evidence to support any decision made and must know who is responsible for delivery of contracts to time and cost.”

Responding to a question on the matter in defence questions, Nick Harvey, minister for the armed forces, said: “The MoD will be the customer of the organisation and is responsible to parliament for everything it does. If there is a failure, the buck will stop with the MoD.”

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