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Defence IQ

UK Government Rejects Proposal to Part-Privatise Procurement Agency

Contributor:  Defence IQ Press
Posted:  10/28/2009  3:47:00 PM EDT  | 

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The UK government has rejected a recommendation by an independent review that UK Defence Equipment & Support (DE&S)–the procurement arm of the Ministry of Defence (MoD)–should be semi-privatised. The proposal was made in a review of the UK’s defence procurement conducted by former civil servant Bernard Gray. It was commissioned by the MoD in December 2008 and released on the 15th October.

The report found that the MoD’s procurement programmes typically suffer delays of five years, costing the MoD around GBP35 billion (US$56 billion). A key conclusion of the Gray report was that DE&S should “at the very minimum” become a Trading Fund, where DE&S would operate in a commercial manner, with the government retaining ownership of staff and assets.

It added, however, that in a bid to achieve the report’s performance objectives, DE&S may need to be transformed into a ‘Go-Co’: a government-owned, contractor-operated facility “run by the private sector either for profit or not-for-profit.” However, the UK’s defence secretary, Bob Ainsworth said in a written House of Commons statement on the 15th October: “I do not intend to take up his suggestion to establish DE&S as a government-owned, contractor-operated entity, to put it more at arm’s length from the rest of the MoD.”

Defence IQ Press Contributor:   Defence IQ Press

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