Follow Up Questions from the Hearings with the MOD Permanent Under Secretary and the Chief of Defence Material
Thank you once again for asking me to give evidence to the House of Commons Defence Committee. As always, I enjoyed the opportunity to update you on our work, and in particular the work we are doing to reform the Defence Acquisition system. During the evidence session, I undertook to provide you with some additional information on a number of areas.
Defence Acquisition Reform.
I undertook to provide the Committee with some additional information on the boundary, structure and purposes of the GOCO [Government-Owned, Contractor-Operated]. I hope that the attached "essay" explains more clearly how we believe such an entity would work. This essay has also been shared with the Public Bill Committee, who recently considered the Defence Reform Bill.
In our discussion, I agreed to investigate whether or not it would be possible to release a number of documents relevant to the Commercial competition. After careful consideration, we have concluded that, for commercial reasons, it is not possible for the Committee to see this documentation at this stage. Some of the information you asked for has not yet been written, and the other information you request is commercially sensitive, and so could not be released at this stage.
We do not expect to see the bid documentation from the GOCO bidder until next March, and from the Defence Equipment & Support+ (DE&S+) until in January. Once the GOCO bid has been evaluated, a Main Gate Business Case will compare the two options – the GOCO bid and DE&S+. At this stage a full Investment Appraisal will be carried out, as part of the decision making process. Until that Appraisal has been completed, given the commercial sensitivities involved, it is very unlikely that we will be able to make any of this documentation available.
You asked for some more detail about the MOD’s capability to oversee a GOCO contract, and to retain an intelligent customer capability. We recognise and share the views of the Committee about the importance of a strong oversight capability. In the first instance, management and oversight of the GOCO contract would be provided by the same team responsible for its initial negotiation, ensuring we benefit from continuity of knowledge and expertise.
We are in the process of identifying the full range of customer capabilities that will be required within the Commands and MOD Head Office to operate with the GOCO. This includes the knowledge, skills and experience needed to manage the contract. Elements of the Cost Assurance and Analysis Service and the Department’s Commercial Assurance function are firmly within the scope of this work.
It is too early at this stage to be able to conclude how these capabilities could be provided, including the extent to which we might need to offer enhanced terms and conditions for civil servants. This work is part of the Assessment Phase to inform next year’s Business Case.
You were also interested in the decision to appoint an Additional Accounting Officer for the GOCO, and whether there was such an arrangement in place at AWE. AWE ML and AWE plc which make up the GOCO are classified as a Public Corporation so are not within the Central Government sector for financial and administrative purposes. (end of excerpt)
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