Uproar as MoD brings in American giants to manage military procurement

Exclusive

Associate Business editor

Unions and industry insiders are up in arms because two US engineering companies have been asked to oversee the way in which the Ministry of Defence runs the £14bn arm that buys military kit.

The Independent can reveal that San Francisco-based Bechtel and Denver’s CH2M Hill have bagged the programme management contracts for the Bristol-based Defence Equipment and Support (DE&S). This agency buys and looks after everything from forklift trucks to Astute class submarines, but is being overhauled by the Government so as to get better value for the taxpayer.

The companies were told earlier this week that they had won the contracts to transform the way in which these crucial items are bought, in what are known as managed service provider (MSP) roles.

Bechtel will look after the navy and RAF, while CH2M Hill will work with DE&S on army and joint-command projects. Detailed negotiations start next week and these talks will be important as the roles are widely considered to be vaguely defined.

CH2M Hill, which worked on the 2012 Olympics, and Bechtel, which has overseen the construction of a 21-kilometre tunnel for London’s Crossrail, have few suitable British employees to fill these contracts. Industry insiders estimate that they will need 150 to 200 staff.

Sources said around half of these experts will be flown in from the US. This would cost around £5m more than just using British staff, with the remuneration including food and accommodation expenses.  An industry insider said: “Two US firms running this is not the ideal option – that’s what worries me the most. They don’t have the indigenous capability.”

The source added that the MoD had failed to pay enough attention to an area of such sensitive national security being awarded to overseas companies. However, MoD sources that “a fair and open competition” has been run.

A spokesman for the Public and Commercial Services Union said: “We are very concerned indeed that there isn’t the skills base in the UK to make this happen. We’ve asked again and again for a guaranteed skills transfer to the existing workforce.”

Separately, the reforms also involve the private sector taking over DE&S’s human resources department. It is understood that all of the Big  Four accountancy firms bid for this role and that PwC has landed the contract.

The MoD is highly sensitive about the reforms of DE&S. Last year, ministers tried to semi-privatise the agency in what was known as a “Go-Co” – government-owned, contractor operated – model.

This plan collapsed over lack of competition after CH2M Hill decided against bidding for the contract at the last moment, leaving Bechtel as the only bidder.

It was thought that CH2M Hill would struggle to win any further significant work in the more limited reforms that are known as “DE&S-Plus”. One industry source said he was “staggered” that it had won the two contracts.

An MoD spokesperson said: “Negotiations to bring in managed service providers are still under way in order to secure the best value for the taxpayer. It would be inappropriate to comment further at this point. We plan to award contracts next month.”

News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
News
i100

Other places that have held independence referendums
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
PROMOTED VIDEO
News
news

Arts and Entertainment
Blossoming love: Colin Firth as Stanley and Emma Stone as Sophie, in 'Magic in the Moonlight'
film

Actors star in Woody Allen's 'Magic in the Moonlight'

News
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
News
peopleThe Times of India said actress should treat it as a 'compliment'
Arts and Entertainment
Jack Huston is the new Ben-Hur
film

It scooped up an unprecedented 11 Academy Awards when it was first remade in 1959

News
news

Watch this commuter wage a one-man war against the Circle Line
News
ebooksAn unforgettable anthology of contemporary reportage
Property
Home body: Badger stays safe indoors
lifeShould we feel guilty about keeping cats inside?
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes the hobby look 'dysfunctional', they say
Arts and Entertainment
Maxine Peake plays Hamlet at Manchester's Royal Exchange
theatreReview: Maxine Peake brings emotional ferocity to Shakespeare's starring part
Extras
10 best table lamps
indybest
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Recruitment Consultant - Soho - IT, Pharma, Public Sector

£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week