DE&S GoCo competition on its last legs as bidder withdraws

One of the two remaining consortia bidding to run the Ministry of Defence agency Defence Equipment & Support has pulled out of the competition, leaving chief of defence materiel Bernard Gray’s plans for a ‘Government-Owned, Contractor-Operated’ organisation in disarray.

By Matt.Ross

29 Nov 2013

A recent review commissioned by defence secretary Philip Hammond concluded that if the number of bidders fell to one, the whole scheme should be reconsidered. Following the consortium’s withdrawal, Hammond commented that “the reduction in competitive tension will make it more challenging for the [MoD] to conclude an acceptable deal with the remaining bidder.”

The withdrawing consortium, Portfield, said the scheme “was not as commercially viable for the consortium as we would have required”. But commentators have highlighted its inclusion of outsourcing specialists Serco, currently facing allegations that it overcharged the Ministry of Justice.

Serco chief executive Alastair Lyons last week apologised to MPs on the Public Accounts Committee for the way the firm handled its electronic tagging work. “It was never right that we should bill where we were not doing work in respect of that billing,” he said. “It was ethically wrong.”

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