sangiovese.
10th Jul 2002, 19:16
An Interesting approach by BAE I guess. So much for the successes of smart procurement and PFI.
By Alexander Nicoll, Defence Correspondent
Financial Times; Jul 10, 2002
The Ministry of Defence has rejected BAE Systems'call to be awarded big defence contracts without competition - and embarrassed the company by revealing that it is running more than a year late in building the Royal Navy's new submarines.
"On the issue of competition, the government believes that BAE Systems is wrong," Lord Bach, defence procurement minister, told the Financial Times yesterday.
The minister was responding to remarks by Mike Turner, BAE chief executive, in an FT interview last week. Mr Turner argued that
Britain would lose important capabilities if overseas companies were awarded contracts to integrate the biggest weapons systems, such as the navy's planned aircraft carriers.
Lord Bach welcomed a "robust debate" with the MoD's biggest supplier, but said: "We think that there are huge advantages in making competition the rule rather than the exception. There should be competitions for most substantial procurements."
The protection sought "would be perceived as anti-competitive", he said. "It would invite retaliation - the kind of retaliation that might stop BAE Systems operating as they do in the US."
For the MoD to abandon competition for big contracts "would be bad news for BAE's biggest customer - the MoD - and even worse news for the taxpayer. Open competition is the best solution in most cases. Why? Cost, innovation, time, the discipline that competition brings, value for money."
The minister's clear rejection of BAE's position came on top of the MoD's disclosure that the company is running more than a year late in producing HMS Astute, the first of a new class of nuclear-powered attack submarines.
Lewis Moonie, junior defence minister, said in a parliamentary answer that Astute had been due to enter service in June 2005, but "is not now expected to enter service before late 2006, although this date has yet to be agreed with the contractor". BAE blamed "engineering complexities".
The programme is the latest in a series of BAE projects that will be delivered late, including the Eurofighter combat aircraft.
Officials said ministers were angry at the latest delay, particularly as it came to light while BAE was adopting such an aggressive approach to procurement.
MoD procurement came under attack on another front yesterday, with the Commons defence committee voicing concern about the ministry's growing reliance on private finance initiative techniques.
The MPs singled out a £14bn refuelling tanker aircraft contract for which companies are competing, and said it seemed remarkable that this was "an area not regarded to be sufficiently close to the front line to make a PFI service inappropriate".
By Alexander Nicoll, Defence Correspondent
Financial Times; Jul 10, 2002
The Ministry of Defence has rejected BAE Systems'call to be awarded big defence contracts without competition - and embarrassed the company by revealing that it is running more than a year late in building the Royal Navy's new submarines.
"On the issue of competition, the government believes that BAE Systems is wrong," Lord Bach, defence procurement minister, told the Financial Times yesterday.
The minister was responding to remarks by Mike Turner, BAE chief executive, in an FT interview last week. Mr Turner argued that
Britain would lose important capabilities if overseas companies were awarded contracts to integrate the biggest weapons systems, such as the navy's planned aircraft carriers.
Lord Bach welcomed a "robust debate" with the MoD's biggest supplier, but said: "We think that there are huge advantages in making competition the rule rather than the exception. There should be competitions for most substantial procurements."
The protection sought "would be perceived as anti-competitive", he said. "It would invite retaliation - the kind of retaliation that might stop BAE Systems operating as they do in the US."
For the MoD to abandon competition for big contracts "would be bad news for BAE's biggest customer - the MoD - and even worse news for the taxpayer. Open competition is the best solution in most cases. Why? Cost, innovation, time, the discipline that competition brings, value for money."
The minister's clear rejection of BAE's position came on top of the MoD's disclosure that the company is running more than a year late in producing HMS Astute, the first of a new class of nuclear-powered attack submarines.
Lewis Moonie, junior defence minister, said in a parliamentary answer that Astute had been due to enter service in June 2005, but "is not now expected to enter service before late 2006, although this date has yet to be agreed with the contractor". BAE blamed "engineering complexities".
The programme is the latest in a series of BAE projects that will be delivered late, including the Eurofighter combat aircraft.
Officials said ministers were angry at the latest delay, particularly as it came to light while BAE was adopting such an aggressive approach to procurement.
MoD procurement came under attack on another front yesterday, with the Commons defence committee voicing concern about the ministry's growing reliance on private finance initiative techniques.
The MPs singled out a £14bn refuelling tanker aircraft contract for which companies are competing, and said it seemed remarkable that this was "an area not regarded to be sufficiently close to the front line to make a PFI service inappropriate".