On 23 February 2015, in a ministerial written statement, I informed the House that Leidos had been selected as the preferred bidder for a transformation programme within Logistic Commodities and Services (LCS), part of Defence Equipment and Support.
Contractual negotiations have now been completed, and I am pleased to announce that the Ministry of Defence will shortly be signing a 13-year contract with Leidos to run the procurement and inventory management of commodity items and the storage and distribution elements of LCS. The transformation programme is expected to deliver financial savings of around £0.5 billion over the life of the contract and involve the TUPE transfer of some 1,250 staff. It will bring defence logistics up to the standard of industry best practice, deliver more efficient and effective processes across the supply chain and enhance the quality of support provided to our armed forces.
LCS staff are based at a number of MOD sites across the United Kingdom, but the bulk of the current LCS storage activity in the UK is located at LCS Bicester in Oxfordshire and LCS Donnington in Shropshire. The majority of procurement and inventory management of commodity items is currently undertaken at Abbey Wood, Bristol. It is of course early days and I cannot be definitive on the impact on jobs; it is a matter for Leidos, ultimately, to determine the number of staff necessary to undertake the work. What I can say is we do not foresee any site closures as a direct result of LCS(T).
Team Leidos is a skilled and experienced team of private sector defence and logistic specialist partners with the global expertise to deliver the transformation required. The programme represents a significant financial investment in new facilities—including the investment of around £90 million in the construction of a new defence fulfilment centre next to the existing LCS site at Donnington in Shropshire—and a further £40 million investment in new IT systems to provide the modern and efficient services that the UK armed forces need.