UK Begins Defence Acquisition Reform

The final assessment phase in a programme that could lead to the overhaul of MOD's equipment and support management commences on 25th April.

A core element of the Transforming Defence programme is reforming the acquisition system, delivering lasting improvement in the management of the MOD’s 10-year, £160 billion equipment and support programme.

The assessment phase, announced by Defence Secretary Philip Hammond in a statement to Parliament on 25 April, is expected to last a year. It will allow the Ministry of Defence to develop and analyse the information required to make an informed decision between 2 options: a private-sector-led government-owned, contractor-operated (GOCO) model, and a restructured, fully-funded version of DE&S that stays within the public sector, known as ‘DE&S+’.

The proposed reform of DE&S is one of the biggest and most significant business changes undertaken by any government. Throughout the next 12 months, MOD will continue to work with the Treasury and the Cabinet Office on the ‘DE&S+’ option to explore the extent of change that could be delivered whilst keeping the organisation fully within the boundaries of the public sector.

In parallel, a commercial process will be launched that will enable the department to start discussions with potential industry partners about how a GOCO organisation would work in practice.

In a Written Ministerial Statement to Parliament, Philip Hammond said, “This programme is about giving them access to the necessary skills, processes and resources to enable them to do their jobs better, ensuring that the Armed Forces are provided with battle-winning equipment on time and to budget.

“At the end of this 12-month assessment phase we will have a comprehensive set of qualitative and quantitative data for both possible operating models which will enable us critically to evaluate the 2 options and make a final decision about the future of DE&S.”

The final decision on the future operating model for DE&S is scheduled to be taken in summer 2014.