MPs take aim at outsourced defence procurement

5 February 2013

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5 February 2013 | Andy Allen

An MPs’ report has cast doubt on the ability of a proposed new outsourced defence procurement model to meet the needs of the UK’s armed forces.

The House of Commons Defence Committee’s report into defence acquisition questioned whether government-owned, contractor-operated (GoCo) entities could effectively carry out military procurement.

Last year, defence secretary Phillip Hammond instructed the Ministry of Defence (MoD) to develop the GoCo proposal.

But committee chairman and Conservative MP James Arbuthnot said: “It is clear that a GoCo is not universally accepted as the best way forward.” He added there were “particular concerns about how the MoD’s overall responsibility for acquisition could be maintained within a GoCo.”

Arbuthnot continued: “In particular, we believe problems might arise if a non-UK company were given responsibility for UK defence acquisition.”

“We further believe it is vital that consultations are satisfactorily concluded with allies, to ensure that there is no adverse impact on co-operation, before any proposals are implemented.”

MPs also questioned whether the UK’s commitment to open procurement was reciprocated by allies and supplier countries.

“While we commend the government’s commitment to encouraging defence exports, it is clear that the playing field is not level.

“If it transpires that others are not prepared to give UK industry the opportunities the UK gives to theirs, it might become necessary for the government to reduce its open procurement.”

The report said while the UK sourced from an open market, European countries were more “reluctant to embrace the virtues of competition”. The US, meanwhile, also takes care to ensure major contracts are sourced from within the US and major programmes are led by American prime contractors.

An additional danger in purchasing defence equipment from overseas was that global suppliers might withhold supply or support in a crisis or fail to provide full information about equipment to allow UK forces to get the best out of it.

The report also stressed the need to ensure that reduced spending on defence science and technology does not offer “a serious threat to the technical skills base”, expressing the fear that such an outcome “may come to threaten the UK’s ability to defend itself”.

“To support indigenous military industrial capability, we believe that the UK government should therefore commit to a target of two per cent of MoD budget being spent on UK-based R&D,” it added.

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