Kevin O'Toole/LONDON

THE UK Government is coming under renewed pressure to produce a coherent defence-procurement strategy which puts greater weight on the future health of the country's industrial base rather than focusing on "narrow" issues of value-for-money.

The pressure comes in a cross-party Parliamentary report issued on 5 December following nearly a year of joint hearings by the Defence Committee and the Trade and Industry Committee.

Despite conceding some relaxation in strict free-market attitudes within the Ministry of Defence (MoD), the report says that industry remains "fiercely critical" of the way procurement competitions are run in the UK. It adds that the MoD's procurement strategies are seen as "verging on the hostile" to the country's industrial base.

The report recognises that the MoD has made greater efforts to work together with the Department of Trade and Industry. This is in part the result of a previous Parliamentary report into the state of civil-aerospace funding in 1993, which revealed an embarrassing lack of co-ordination between the two departments and led directly to the latest set of joint committee hearings into defence.

While the MoD has been taking greater account of the state of the industrial base and seeking a less-adversarial relationship with suppliers, the report says that the changes have been reflected in an "ad hoc way" for major procurement decisions, and rarely for smaller competitions.

The report recommends that the MoD is given a formal responsibility to take account of the future of the UK's defence industrial base, and says that it should lay out much clearer guidelines on the factors influencing its procurement decisions.

Reform of the procurement procedure itself is highlighted as a pressing need. Horror stories are cited about protracted competitions, with up to 40 companies invited to tender, including subsidised foreign suppliers, with bidding costs typically running at 3% of the final contract price.

The committees recommend that the MoD has fewer competitions and an average of around six tenders, with the accent on partnership with suppliers.

There is some evidence that the Government is beginning to take note of the industry pressure. The MoD pledges that, by the end of the 1996, it will draw up a list of "key technologies and industrial capabilities" which it believes should be retained within the UK.

The UK Government is also urged to take a "more prominent role" in pushing for defence consolidation within Europe. The report says that while US co-operation should not be prevented, European collaboration is "...seen as crucial to the survival of the defence industries of the UK".

The report says, that it is "essential" that the UK joins any future European armaments agency, springing from proposals already laid down by France and Germany.

It is questionable how far the UK Government is prepared to go in adopting the recommendations. Since the hearings were held, the post of defence secretary has been taken on by Michael Portillo, a stalwart of free-market philosophies and doubter over Europe.

Source: Flight International