Select Committee on Welsh Affairs Fourth Report

4  Evaluation Process by the Ministry of Defence


33. The bids from Metrix, MC3 and Holdfast are to be subject to evaluation by the MoD's Evaluation Project Board. Brigadier Nield, the Team Leader of the Board told us that it had been tasked with drawing together a business case on its preferred options for the two packages. That business case would be subject to internal MoD approval before it went to Ministers for a decision. Any decision by the MoD would then be sent for approval by the HM Treasury.[47] Tom Watson MP, the MoD Minister with responsibility for the Defence Training Review, told us that while he could not put a finger on the exact date he would receive the report from Brigadier Nield's Team, he anticipated that it would arrive in October.[48] However, the Minister confirmed that any announcement on the award of both contracts would be made first to the House of Commons.[49]

Criteria for the Bid

34. The criteria by which the bids are evaluated was described by Brigadier Nield as a highly complex matter which covered seven different functional areas "from command-and-control to training, and training dominates everything with this, through to establishment support and the defence estate".[50] Those seven functional areas had been divided up into 50 separate individual requirements, each of which would be evaluated using a scoring process. At the end of the process, those scores were aggregated up to give each bid a technical score.[51] Brigadier Nield explained that there were also "a variety of other areas which are pass or fail criteria, like the commercial position, like their financial and pricing position, because this has to be deliverable in banking terms".[52]

35. The size and complexity of that task was given further credence with the knowledge that the documentation accompanying the Metrix bid had reached 100 feet in length.[53]

Separate Bids

36. Several of our witnesses highlighted potential benefits of Metrix bidding for the two contracts and locating them on a single site. Chris Bryant MP believed that combining the two bids would allow for a "step-change difference" in training. Furthermore, he saw a great opportunity for "financial advantages" of awarding the two bids to Metrix.[54] Jane Hutt AM also highlighted the benefits that could be accrued from Metrix bidding for both packages.[55] In particular, she noted the benefit of the Red Dragon superhanger as offering great potential to bring those two packages together.[56] Jenny Randerson AM argued that there could be "significant economies of scale that come through delivering both contracts". [57]

37. Chris Bryant MP also saw an advantage for the MoD in that the only existing building that would be used would be the "brand-new unrepeatable [Red Dragon] hangar", while the bid at Cosford would be "looking at refurbishing dilapidated old buildings".[58]

38. Tom Watson MP, told us that the size and scale of the project was so complex that the MoD concluded that the process was best handled by tendering separate bids for the two programmes. Once that had been done, "strict European rules mean that they will be assessed separately".[59] Brigadier Nield confirmed that position. He explained to us that "having chosen that path, and invited tenders on that basis, the MoD would evaluate the bids entirely independently and separately".[60] While this is in accordance with EU law it is unfortunate that the Metrix bids were not able to be considered in tandem as potential economies of scale could come into play. Bridagier Nield confirmed that such an approach was not possible. Responding to that suggestion Bridagier Nield said that the MoD had "set the terms in which the bid will be applied and to change that would not just be not fair but against all the rules of engagement".[61]

39. We understand the fact that having decided on two packages, that European Union law prevents the MoD from assessing both Metrix bids together. We share the view of our witnesses that the two bids have the potential to deliver economies of scale and we are disappointed that potential savings in those areas cannot be explored.

Audit of the Evaluation Process

40. Brigadier Nield asserted that transparency would be at the heart of the process.[62] He explained that "throughout that process we have had an independent scrutineer who has been at my right-hand shoulder throughout the whole of this process to ensure that the debate we have had, […] has been properly and effectively implemented".[63]

41. In fact, we were told that the process would be subject to two audit regimes. The MoD had recruited Professor Stephen Molyneux, director of the UK's e-learning establishment as one strand of that audit process.[64] To facilitate Professor Molyneux's audit function, he has had access to key meetings related to the design, delivery, management and support of future defence training. He has also been party to the arguments associated with the allocation of specific points against requirements of the programme. Brigadier Nield explained that although he was a non-voting member, Professor Molyneux had been invited to comment as an expert witness on the delivery of distance learning.[65] Furthermore, Professor Molyneux had attended meetings at which formal decisions were made and had produced several reports on each of the packages.[66]

42. The second audit function would be carried out by the MoD's Private Finance Unit. Brigadier Nield described the Unit as being "entirely independent of the integrated project team" and had a responsibility to ensure that private finance programmes undertaken by the MoD were managed effectively.[67]

43. We were told that in addition to the two audits of the evaluations, should the MoD be asked, it would place the evaluations of the bids in the public domain.[68] We believe that the MoD should not wait to be asked to disclose the evaluations of the bids. We recommend that once the contract has been announced, the MoD should make public all its data and records on the evaluation process, not only to individual requests but in electronic form on their website. Furthermore, we expect that the reports of Professor Molyneux on the evaluation process to be included in that information.

Guarding against bias?

44. David Melding AM, stated that one of the major fears of his All Party Group was that "there will be extraneous cultural considerations, where some of the people in senior positions in the military will say, 'Wales is unfashionable; it will be difficult to recruit and difficult to get people to locate here'".[69] Furthermore, there were concerns that "institutional inertia" and "vested interests" amongst senior members of the military could act in a prejudicial way against the St Athan bid.[70] Brigadier Nield dismissed those accusations. He had confidence in the rigour of the evaluation process and also told us that in his conversations and briefings with the senior military community he had "sensed none of what you suggest".[71]

45. A further concern was the suggestion that at least one individual in the Ministry of Defence was actively opposed to a "Welsh" solution to the MoD's training needs. Confronting that claim, Tom Watson MP declared that he had not heard of any such comment but stated that he would be "surprised if a senior military person did say it".[72] Brigadier Nield stated clearly that he "could not be associated with any form of comment of that nature",[73] before reiterating the rigour of the process as a defence against such a view becoming policy. Nick Evans from the MoD, agreed that the process for awarding the contract would not allow for such a position to be taken. He reinforced the MoD's position which was to find "value for money solutions".[74]

46. Tom Watson MP succeeded Don Touhig MP as the MoD Minister with responsibility for the award of the contract. When Don Touhig MP was the Defence Minister he was pressed on the fact that he had to make an impartial decision while at the same time being a Member of Parliament for an area of south Wales that could benefit from locating the training centre at St Athan. At that time, Don Touhig responded by saying that

"As a Welshman and the minister responsible for the tender process, I have to be seen to be above regional considerations.".[75]

47. By coincidence Tom Watson MP, a Member of Parliament for the West Midlands faces a similar dilemma. When asked about any similar conflict of interest, the Minister said that

"When I realised I had inherited this project, I thought this is the can't-win project for a young politician. What I did hear about Mr Touhig when he was responsible for this was one argument to say that this was disastrous for south Wales because he was going to have to give the bid to somewhere else so he did not look as though he was giving a favour. I also heard that it was great news for south Wales because he was going to give it to south Wales because he was a south Wales MP. I am sure the same allegations will be made in some of the more scurrilous parts of this building. All I can say to you is that I shall assess the recommendation and my decision will be based on what the best defence outcomes are".[76]

48. We welcome the clear statement from the current UK Minister, Tom Watson MP, that his position as a west Midlands Member of Parliament will not affect his decision on the award of the contract and that his decision will be based on what is best for the armed services.

47   Q 65 Back

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58   Q 45 Back

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64   Q 91 Back

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75   South Wales Echo, 28 April 2006. Back

76   Q 82 Back

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Prepared 25 July 2006