§ Mr. Ashdownasked the Secretary of State for Defence if he will name and describe the procedures of financial 261W appraisal and checking of commercial reliability applied to a company wishing to supply goods or services under contract to his Department, specifying when each procedure is applied; and if he will make a statement.
§ Mr. Archie HamiltonCompanies wishing to supply goods or services to the Ministry of Defence and to be registered on the defence contractors list are required to complete application forms (standardised across all Government departments) providing details of their financial standing, technical capabilities and quality systems. Bank and trade references are taken up and the audited accounts provided are appraised by the Ministry's professional accountants.
§ Mr. Ashdownasked the Secretary of State for Defence if he will publish a list showing, for each of the last three years (a) the number of his Department's contracts made for the supply of goods or services, (b) the total number of companies receiving such contracts and (c) the number of companies receiving contracts totalling £5 million or more in value.
§ Mr. Archie HamiltonThe information is as follows:
- (a) The number or MOD headquarters contracts and financial amendments placed for the supply of goods and services for financial years 1983–84 and 1984–85 are as shown in table 2.10 of the statement on the Defence Estimates 1986. For financial year 1985–86 the number is 116,552.
- (b) The total numbers of companies receiving individual contracts worth more than £5,000 in value were approximately 4,120 in 1983–84, 4,215 in 1984–85 and 4,410 in 1985–86. Information is not readily available for lower value contracts.
- (c) The numbers of companies receiving contracts totalling £5 million or more in value were some, 115 in 1983–84; 75 in 1984–85 and 140 in 1985–86.
The figures given in (a) exclude local purchase orders, which totalled 495,413 in 1983–84, 505,880 in 1984–85 and 435,395 in 1985–86. The number of companies receiving such orders is not available.
§ Mr. Ashdownasked the Secretary of State for Defence if he will describe what statistical information is available about the work load and results of the procedures of financial appraisal and checking of commercial viability applied to companies in relation to the supply of goods or services to his Department; and if he will make a statement.
§ Mr. Archie HamiltonIn 1985–86 the Ministry's professional accountants undertook some 700 financial appraisals of accounts (including where necessary those of parent and holding companies) of companies wishing to become suppliers of goods or services to the Ministry of Defence. As a result of these appraisals the Ministry declined applications from some 40 companies. In the
262W
Year Ordered Location Total in operation 1979 1xCray1A AWRE Aldermaston 1xCray1A 1980 — — 1xCray1A 1981 — — 1xCray1A 1982 — — 1xCray1A 1983 1xCray1S FAE Farnborough 1xCray1A, 1xCray1S 1983 1xCray1S RARDE Fort Halstead 2xCray1S, 1xCray1A 1984 1xCrayXMP AWRE Aldermaston 2xCray1S, 1xCray1A, 1xCrayXMP 1985 — — 2xCray1S, 1xCray1A, 1xCrayXMP 19861 — — 2xCray1S, 1xCray1A, 1xCrayXMP 1 To date. same year the Ministry's accountants appraised some 240 accounts of contractors who are regularly employed by the Ministry on larger value non-competitive contracts.
§ Mr. Ashdownasked the Secretary of' State for Defence if he will describe what information is available about contracts for the supply of goods or services that have been broken in recent years, including contracts that have been broken by a company becoming insolvent; and if he will make a statement.
§ Mr. Archie HamiltonThe information could not be provided without disproportionate time and effort.
§ Mr. Ashdownasked the Secretary of State for Defence (1) if he will name and describe the procedures of financial appraisal and checking of commercial viability applied to a company engaged to supply goods or services to his Department when the ownership or control of the company changes; and if he will make a statement;
(2) if he will identify the procedures of financial appraisal and checking of commercial viability applied to a company wishing to supply goods or services under contract to his Department which include some examination of ownership or control of the company; and if he will make a statement.
§ Mr. Archie HamiltonWhen the Ministry is made aware of a change in the ownership of a defence contractor, copies of audited accounts provided by the new owner are appraised by the Ministry's professional accountants in the same manner as for a new applicant for registration.
When a change of ownership takes place during the currency of a contract, any legal action necessary is taken to transfer formally the relevant contract after, the financial and technical competence of the new company has been established. Changes in the control of a company, but not its ownership, do not require re-registration procedures since any existing contractual obligations would be unaffected.
Companies seeking registration arc required to provide details of all associated companies, directors and major shareholders. Amendments to this information are sought if there is a change in the ownership of a company already registered on the defence contractor's list.