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Conflicts of Interest Threaten UK Procurement Outsourcing Plan

Discussion in 'The Americas' started by layman, Jul 24, 2013.

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  1. layman

    layman Aurignacian STAR MEMBER

    May 1, 2012
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    Ministry of Defence Shake-Up In Chaos Over Conflicts of Interest (excerpt)

    (Source: Independent on Sunday; published July 21, 2013)

    The Government’s heavily criticised plan to “privatise†the £14bn defence agency that buys the armed forces’ tanks and missiles is in crisis, as all of the companies bidding to run the organisation have acute conflicts of interest.

    The firms – which range from huge US engineering empires to the electronic-tag-scandal group Serco – are worried they will be compromised by their existing contracts with the MoD if they win the right to run Defence Equipment & Support (DE&S). The conflicts could even prompt legal challenges, while it is understood that Ministry of Defence officials fear that this globally unique overhaul is unworkable.

    The chaos is heaping pressure on the coalition to scrap its radical experiment to reform how Britain organises its defences. It is understood that even the Pentagon has, privately, been shocked that the Defence Secretary, Philip Hammond, is so keen on promoting the idea of allowing commercial organisations to run such a sensitive area of national security.

    Handing DE&S over to the private sector is one of Mr Hammond’s flagship reforms as he looks to rein in spending. Critics say this is privatisation by stealth, but the plan is designed so that there is the commercial acumen to ensure the taxpayer does not overpay for anything, from submarines to satellite systems.

    At least nine companies have formed three consortiums to bid for the right to run the Bristol-based DE&S in what is known as the “government-owned, contractor-operated†model – or GoCo. They are fronted by US engineers Bechtel, CH2M Hill and, believed to be working together, URS Corporation and KBR.

    An industry source said: “The whole plan could end up being axed. There is only a very small clique who believe that a GoCo can deliver value for the taxpayer. It is questionable, given the conflicts across the supply chain, that any private-sector partner could deliver value for the MoD.†(end of excerpt)

    Click here for the full story, on The Independent website.
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