Select Committee on Defence Minutes of Evidence

Examination of Witness (Questions 500 - 505)



  500. Both organisations have been putting together partnering agreements with firms with whom they might otherwise be expected to compete. We saw that at ABRO with some partnering they are doing with Oshkosh, with Alvis-Vickers and so on. What limits are you putting on the number of partnering agreements that those agencies can arrange? How are you monitoring the effect of such arrangements on the scope for competition for the MoD's repair work, which I guess you would need to seek to encourage?
  (Air Chief Marshal Sir Malcolm Pledger) My immediate answer is I know of no limits necessarily because the trading fund by virtue of its delegations has to try to create other commercial opportunities as well as fulfil work from the Ministry of Defence. I know of no specific limitations on the number of partnerships and, indeed, I am sure that in the owner's advisory regime the partnership development is very definitely part of the transition that they are going through in this trading fund development. So far as the scope for competition is concerned, we are going to have to create opportunities to show just how competitive these organisations are going to be against some of our current core suppliers. My perspective on that would be simply to create the opportunities for those competitions and learn from them.

  501. Within a best value not necessarily lowest price scenario and the search capability that ABRO have which is unique?
  (Air Chief Marshal Sir Malcolm Pledger) I come back to operational risk and resilience.

  502. One last specific question on the Cottesmore project which you will be familiar with.
  (Air Chief Marshal Sir Malcolm Pledger) No.

  Jim Knight: You are not familiar with it? Would it be easier if you provide us with a note.

  Chairman: Does anybody behind know about the Cottesmore project?

Jim Knight

  503. My understanding is in the context of what you have been talking about today of end-to-end—
  (Air Chief Marshal Sir Malcolm Pledger) You are talking about Harrier?

  504. You are putting the Harriers at Cottesmore and Whitton together with all the RAF functions with industrial production in the same location. I am interested in how that fits with your overall vision of DARA and partnership with industry and whether you are driving that one forward with all the up-front costing problems that might present.
  (Air Chief Marshal Sir Malcolm Pledger) Very briefly, Chairman, I would have to refer, would I not, to the success of what has gone on in warship modernisation where by bringing this end-to-end regime and successful solution with a partner we have achieved significant efficiencies and responsiveness in that support chain. In the same way we must then explore the collapse of what I would call front and rear and therefore concentrate on end-to-end and the benefits that can accrue from that. There will be obvious benefits in capital spares if you only have to have them at one location rather than several. There must be huge economies in that process. Indeed, I suggest there has to be a better integration solution if you have only got that one particular position. So we are debating that with our customer who also has certain reservations about what I call the resilience of manpower arrangements currently in his organisation, but I would simply say we have managed to resolve those as far as the naval base currently is concerned.

  505. And the up-front cost of new roads, etcetera, is something that is not a problem, it is more those other issues?
  (Air Chief Marshal Sir Malcolm Pledger) I did not say that it is a problem, I said we are examining this and those issues will come out as part of the investment appraisal and value for money.

  Jim Knight: If you can give us a written note on where we are on costings and implications for the future of DARA, that would be very helpful.

  Chairman: Thank you very much, Air Marshal, that was very helpful. You will realise that I can manage very successfully a 40% reduction without any consequent loss of efficiency so if you want some advice maybe you should ask! We thank you so much and your "suits", as Kevan said, for coming along. Thank you so much.

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