HC Deb 20 November 1973 vol 864 cc1109-11
9. Mr. Milne

asked the Minister of State for Defence if he will give details of the method by which orders are placed by his Department for supplies of arms and equipment and other Service equipments.

Mr. Ian Gilmour

Except for certain supplies from Royal ordnance factories, defence equipment is ordered under contract from suppliers on the defence contractors' list. Competitive tenders are invited whenever practicable and the most advantageous offer is accepted, taking all factors, including price, into account. When competition is impracticable, the Ministry of Defence satisfies itself that fair and reasonable prices are paid.

Mr. Milne

Is the right hon. Gentleman aware that the method of placing orders adopted by his Ministry is very often detrimental to firms in the development districts and that the Department should be looking for possibilities of creating jobs as well as at the placing of orders? Is it not time that the old-boy network operating in this connection was broken? Is the right hon. Gentleman aware, further, that when he talks about competitive tenders he is dealing with only a very limited sector of the orders placed by his Department? Will the right hon. Gentleman look at the possibility of widening the range?

Mr. Gilmour

I agree that competitive tenders are not the majority of contracts, but I do not accept the rest of the hon. Gentleman's comments. As he knows, under the special preference scheme, if a bid by a development area firm is not low enough to win the contract, up to 25 per cent. of the requirement may be offered to firms in the development areas at a price which does not involve us in any additional expenditure. If the hon. Gentleman has a specific grievance in mind and cares to write to me about it, I will look into it.

Mr. Milne

I thank the right hon. Gentleman.

Mr. Scott-Hopkins

Is my right hon. Friend aware that it is continuity and quality of supplies which is vitally important rather than the geographical positions of firms?

Mr. Gilmour

That is so, but at the same time we try to play our part in helping the regions.

Mr. Cronin

In view of our present very grave balance of payments situation, is there not a good case for giving preference to firms with good export records?

Mr. Gilmour

In the nature of things, this very often happens. Firms with good export records normally are highly competitive.