§ Mr. David ClarkTo ask the Secretary of State for Defence how many contracts have been placed by his Department under the no acceptable price, no contract initiative; what was their total value in each of the years since the initiative was introduced; and what criteria are used to evaluate the success of the procurement initiatives.
§ Mr. FreemanThe no acceptable price, no contract initiative was introduced on 1 July 1992. Two hundred and forty-two contracts have been let under the initiative to 31 July 1994. In the 13-month period from 1 July 1992 to 31 July 1993 a total of 46 contracts were placed, valued at £886 million. During the year 1 August 1993 to 31 July60W 1994 a further 196 contracts were let, with a total value of £2,996 million.
The initiative improves the timeliness of our non-competitive risk pricing. The initiative is a success in the context of the significant increase in the value of work priced before contract placement and industry has not demurred at this approach. Nevertheless, it has still to be proven whether estimating accuracy is maintained. This will be determined by the cost audit of those contracts selected for post-costing examination.