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Volume 455: debated on Monday 8 January 2007

To ask the Secretary of State for Defence if he will establish a monitoring mechanism to reduce the risk of outsourcing of defence business to dominant private sector companies. (101630)

[holding answer 27 November 2006]: The Defence Industrial Strategy (DIS) recognises that long-term value for money is the bedrock of the Ministry of Defence’s procurement policy, while delivering the equipment and capability the armed forces needs.

Open and fair competition both at prime and subcontract level remains one of the key mechanisms by which we achieve this. MOD rules require procurements to be advertised in either the Official Journal of the European Union, the MOD Contracts Bulletin or the European Defence Agency’s Electronic Bulletin Board. All tenders are evaluated on the same basis and against the same award criteria.

The DIS also recognises that competition is not always appropriate in achieving long term value for money but must be used intelligently alongside other options, having considered the nature of the marketplace. This assists in militating against the possibility of dominant private sector companies winning most or all outsourced defence business unless won in open and fair competition. A Key role of the new Defence Commercial Director is to ensure that particular companies do not achieve a dominant position that is not in the UK’s interest.