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LONDON: Britain will kick off controversial talks to put its 159 billion pound ($238 billion) military equipment buying programme in the hands of a private company as soon as Friday, as it battles to clamp down on cost overruns and delays, industry sources said.
About 20 firms have expressed an interest in a contract to run the Defence Equipment and Support (DE&S) unit, which accounted for almost half of the Ministry of Defence's (MoD) 34.4 billion pound budget last year. The government will now choose firms for formal discussions.
Should it go ahead, Britain will be the first country to outsource its negotiations with weapons supplies such as BAE Systems and Finmeccanica, according to defence consultancy IHS Jane's. Britain expects to spend 159 billion pounds on military equipment between 2012 and 2022.
Firms in the running for the contract include defence and engineering companies Bechtel, CH2M Hill and Balfour Beatty , as well as business consultants PricewaterhouseCoopers and Deloitte, three sources told Reuters. US-listed Fluor, URS, KBR, and SAIC are also vying for the deal, two of the sources said.
Some of the British companies in the running include WS Atkins, Capita, PA Consulting, QinetiQ and Serco, the three sources added. The firms will now decide whether to form alliances, with some of the US groups expected to team up with British ones.
In June, Defence Secretary Philip Hammond laid out the so-called government-owned, contractor-operated (GOCO) plan. "It's a huge step for MoD outsourcing and has the potential to significantly change the procurement market for defence materiel in the UK," one source close to the bid process said.
The MoD declined to comment on the process. |
