Government plans for a semi-private procurement function for the MoD are “totally dead in the water”, a peer has claimed during a debate in the House of Lords.
It comes after defence secretary Philip Hammond revealed that one of the two consortia of bidders - Portfield, comprising CH2MHill, Serco and Atkins - for the government-owned, contractor-operated (GOCO) procurement model had withdrawn from the competition.
His written statement said the government will now look at the 1,200-page proposal from the other bidder Matériel Acquisition Partners (led by Bechtel with PA and PwC).
Lord John Lee of Trafford, a Liberal Democrat former junior defence procurement minister, told the House: “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.”
Lee also questioned whether the MoD’s chief of defence material Bernard Gray should step down “given that [GOCO] has collapsed”.
He added: “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+ (defence, equipment and support plus) the answer, as supported by many noble Lords?”
However Lord John Astor of Hever, the parliamentary under secretary of state for defence, replied: “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.”
Astor added that the government is “very clear that, whatever option we choose, we will need to work with colleagues across relevant departments”.
The change in military procurement was mooted in November 2011. In April the government announced that the MoD will carry out a year-long assessment of GOCO and DE&S+, an alternative model to GOCO produced by the MoD, to decide which provides greater value for money.