I was just seeking clarification of the situation, and whether any such rule (which presumably isn't legally enforceable?) exists.
The problem with having a senior stakeholder, who makes key decisions on military programmes based partially on personal benefit, is that objectivity is lost. This will often result in poor value and reduced capability being delivered. It is therefore important, for the taxpayer, that the MoD takes its obligations seriously and enforces restrictive covenants where it is proper to do so.
Where there is an active procurement in progress, it is potentially unlawful for the Authority or bidder to allow circumstances that skew competition unfairly. So when it transpires that one bidder has just recruited a member of the Authority's evaluation team, the other bidders have grounds to challenge the process. This causes delay, expense and loss of reputation.
Agency Theory, or the age old question of for whose benefit is the organisation run for? (shareholder, customer or senior manager) has always been a problem in the military - as it is in other industries. However, my personal opinion is that we should not be too draconian - retaining knowledge and capability within the UK defence sphere is also very important. Going all communist about it might not serve us well.