MOD may outsource maintenance jobs
The Ministry of Defence is considering expanding the amount of support work that it contracts to private companies.
Maintenance jobs normally carried out by internal support staff could be almost entirely given to outside contractors according to the recommendations of an MOD review. A copy of the Defence Support Review (DSR) for 2009 has been received by the Financial Times, who report that the document recommends that increasing arrangements for maintenance, supply and service with industry could save up to 2.8 billion pounds over the next ten years. According to the DSR £474m could be saved in the first four years of the plan, in return for a modest £5m outlay in the first year.
Some of the proposals contained in the DSR include more substantial contracts with suppliers, and advocacy for increased co-operation with international companies for joint-projects. This could see private companies given the responsibility for maintenance jobs across the armed services.
The DSR encourages all of the armed services to outsource their maintenance jobs in a similar way to the current system used for vehicles in both the RAF and the Army Air Corps. For example, the attack helicopters in the Army Air Corps operating in Afghanistan are currently maintained by the company AgustaWestland under a contract valued at £439 million.
Under the new proposals, this type of deal could be expanded. Large companies could be given greater responsibilities like maintaining engines across a wide range of different aircraft in several theatres of operation. This could lead to an increase in engineering recruitment from firms such as Rolls Royce or BAE, as currently private companies handle a small percentage of the work needed by the armed services. Although airplanes and helicopters are serviced under contracts meant to guarantee a set number of operational hours each year, land vehicles and navy vessels are generally maintained by internal military support crew.
The DSR was commissioned to look for "short and long-term savings recommendations" and to identify "areas for further, more detailed work" with the private sector. In the report it notes that "past efficiencies have...been derived from a range of increasingly innovative arrangements with industry".
However its findings are opposed to the Haddon-Cave report released last month. This investigation into the Nimrod plane disaster of 2006 criticised the outsourcing of maintenance jobs to private companies as a cost-saving exercise, saying that such targets undermined the MOD's ability to act as an "intelligent customer". It was heavily critical of the two leading contractors for the MOD, BAE systems and Qinetic, and said that their safety reviews contained "lamentable" failures of the Nimrod's capabilities in the Afghan theatre of war.