§ Mr. MansTo ask the Secretary of State for Defence what level of cost savings were projected by his Department to arise from the implementation of its policy of transferring risk to the private sector in prime contracting; what savings have been made to date; and what savings are projected over the next five years.
§ Mr. FreemanThe Ministry of Defence has introduced a wide range of initiatives to improve value-for-money in defence procurement. These act concurrently on project costs and isolating the effect of a single factor, past or future, is a very complex process. It is, therefore, not possible to quantify the cost savings attributable to the policy in recent years of transferring or sharing risk, whereby taut and incentivised contracts are used to place responsibility with the contractor for activities which they are usually best fitted to discharge. We know that the costs of failing to do this adequately in the past could run into many millions of pounds on a single large project.