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Contingency Liability

Volume 639: debated on Monday 23 April 2018

I have today laid before Parliament a departmental Minute describing a Contingent Liability (CL) in the region of £150 million associated with the Initial Airport Services Contract (IASC) at RAF Brize Norton. This initiative is part of programme GATEWAY, which was established to develop an enhanced operating model for the station.

The IASC will ensure the continuity of existing contracted technical support services following the expiry of the current Multi Activity Contract (MAC) on 30 September 2018. It will also offer benefits through the contractorisation of additional services, including elements of ground engineering, logistics and support administration. By expanding the existing MAC service provision, it will release military liability to meet the strategic defence and security review 2015 growth plan and release civil service posts in support of the planned civil service headcount reduction. It will also provide a value for money service contract through rationalisation and economies of scale.

The maximum CL is in the region of £150 million, which ensured healthy competition from prospective tenderers. There is also a further CL of £2,880,000 associated with the indemnity given to contractors for terminal redundancy liability associated with ex-authority staff.

The Treasury has approved the proposal in principle. If, during the period of 14 parliamentary sitting days beginning on the date on which this minute was laid before the House, a Member signifies an objection by giving notice of a parliamentary question or a motion relating to the Minute, or by otherwise raising the matter in the House, final approval will be withheld pending an examination of the objection.