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Wednesday, July 18, 2012

UK considers outsourcing defense procurement

What's the difference between PPP and GoCo? Or ENDPB/SP for that matter?

None, really. They all try to insulate government employees from accountability and politicians from hard decisions about intractable bureaucracy, interest groups, and policy. They all reflect either an inability or unwillingness to properly manage, top to bottom.

And the more acronyms thrown at a subject, the more obvious the struggle to hide something, such as, the inability to frame the issue clearly.

Yes, Sir Hammond Humphrey?

MoD set to opt for GoCo model for Defence Equipment & Support
The Ministry of Defence (MoD) is expected to choose a "government owned, contractor operated" (GoCo) organisation as its preferred type of model for the military procurement organisation Defence Equipment & Support (DE&S) to drive better value from the defence budget.

It follows a statement by defence secretary Philip Hammond in the House of Commons on the various merits of the GoCo and Executive non-departmental public body with a strategic partner from the private sector (ENDPB/SP) models.

"This is essential to tackle the legacy problems in defence acquisition that led to cost and schedule overruns, and which have resisted previous reform. The people at DE&S work hard to provide battle-winning equipment, support and logistics, but the current system does not work for them, does not always support them, and is not delivering value for money for the taxpayer.

Over the last year, said Hammond, Bernard Gray, the chief of defence materiel, has analysed the root causes of the current situation and identified three interlinked issues. These are a historically overheated equipment programme, where far more projects were planned than could be paid for; a weak interface between DE&S and the wider MoD with poor discipline and change control between those setting requirements for equipment and those delivering the programmes; and insufficient levels of business capability at DE&S for the scale and complexity of the portfolio it is asked to deliver.

The result, he said, has been significant additional costs in the defence budget of hundreds of millions of pounds each year, with money spent managing the consequences of delay rather than delivering maximum capability for the armed forces.

"The MoD is now engaged in a process of transformation to deliver the behaviour-changing incentives and structures that will maintain the budget in balance in the future. The restructuring of DE&S is key to this process," said Hammond.

"Earlier this year, I therefore asked my officials to focus their efforts on considering the comparative benefits which could be derived from changing DE&S into either an ENDPB/SP, or a GoCo entity."

Privately run MoD procurement 'could harm accountability'
Shadow defence minister Alison Seabeck said ministerial accountability and public transparency were vital on defence decisions involving "billions of taxpayer pounds", decisions which were also "central to the strength of frontline forces".

She warned proposals could "weaken accountability and ministers have important questions to answer". "We must have evidence to support any decision made and must know who is responsible for delivery of contracts to time and cost," she said.

"The problems we have seen in relation to G4S cannot be repeated when dealing with our armed forces."

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