| LONDON, April 10
LONDON, April 10 Britain, which failed last year
to put its defence equipment buying programme into private
hands, plans to try again by breaking the multi-billion pound
operation into smaller contracts, the government said on
The Ministry of Defence (MoD) told Reuters it would seek
bidders to run its land, fleet, air and joint command arms,
alongside separate contracts for human resources and finance.
The move would complicate the buying process. But it could
also strengthen the hand of defence suppliers such as BAE
Systems that, under the previous plan, would have had
to deal with one buyer with the power to enforce a deal across
Industry sources said the government would send out notices
as soon as next week to companies interested in taking part in
its latest attempt to revamp its Defence Equipment & Support
arm, which has been criticised for cost overruns and delays.
Britain abandoned the plan to engage a private contractor to
run all of DE&S after one of the only remaining two bidders
In December, the government said it would set up the unit as
a "bespoke central government trading entity" headed by a chief
executive appointed by the government and would tender out three
support contracts for project delivery, human resources, and
In response to questions from Reuters, the MoD said it now
planned to divide the project delivery further.
"To meet the specialist requirements across DE&S, we are
seeking proposals from the market to support Fleet, Land, Air
and Joint activities," it said.
It declined to comment on when the letters would be sent out
but said companies would not be able to run more than two units.
"It's a lot more fragmented than the original plan, a lot
weaker," one industry source said.
Firms such as Fluor, KBR, Bechtel, CH2M
Hill, Balfour Beatty, Atkins which had all
previously expressed interest in the contract to run the DE&S
unit, were likely to look at the new proposal, industry sources
DE&S has a 14 billion pound ($23.49 billion) annual budget
to buy and support all equipment and services used by the navy,
air force and army. Britain expects to spend 164 billion pounds
on military equipment between 2013 and 2023.
Major defence equipment projects that the MoD is planning to
finance include 35.8 billion pounds on seven BAE Systems-built
Astute-class submarines and a replacement for Britain's Trident
submarine nuclear deterrent, as well as 18.5 billion pounds on
fighter jets and drones including Lockheed Martin's F-35 stealth
($1 = 0.5961 British Pounds)
(Reporting by Brenda Goh)