RAF (Market-testing) (Hansard, 2 December 1992)

§ Mr. Barry Jones
To ask the Secretary of State for Defence how the higher formation costs of RAF Support Command will be taken into account in respect of in-house bids in the market-testing competition for RAF establishments.

§ Mr. Aitken
The market-testing procedures provide for in-house costs to be compared with the prices offered by tenderers on a realistic and consistent footing. Only the resource costs that could be expected to change in the event of contractorisation are included in the in-house bid. The higher formation costs of RAF Support Command would be taken into account only to the extent that they would be affected were a given service or facility to be contractorised.

§ Mr. Barry Jones
To ask the Secretary of State for Defence what proposals he has to ring-fence the higher costs of service men to ensure that in-house bids have a fair chance in the market-testing competition announced for RAF establishments; and if he will make a statement.

§ Mr. Aitken
As part of the market test, the in-house operation is encouraged to offer efficiency improvements, such as replacing more expensive military personnel with civilians, in order to become more competitive. Bids will be assessed on that basis. In-house bidders will also be encouraged to engage outside consultants to help with the preparation of their bids.

§ Mr. Barry Jones
To ask the Secretary of State for Defence what proposals he has to ensure that there is a level playing field for in-house bids in the market-testing competition announced for RAF establishments.

§ Mr. Aitken
I have arranged to place a copy of the procedures for market-testing in the Library of the House. They require the in-house bid to be prepared against the same requirements, time scale and, so far as is practicable, contract conditions as the commercial tenders. The evaluation of tenders is carried out by officials in a neutral and objective position, and we are currently considering the means by which we can introduce independent observers into the process, as guarantees of fairness.