Smart Procurement (Hansard, 11 February 2000)

§ Mr. Keetch
To ask the Secretary of State for Defence what is the target for cost reduction on the year-by-year defence equipment procurement budget to be achieved as a result of the Smart Procurement Initiative; and if he will make a statement. [109699]

§ Dr. Moonie
We are on track to deliver the £2 billion of reductions in spending on defence equipment procurement that we aimed to achieve on the merit of the Smart Procurement Initiative. These savings are not set out as a target for year by year reduction, as expenditure profiles may vary on individual projects, but are assessed as the sum of reductions made in successive planning rounds, for the 10 years from 1998–99 to 2007–08.

§ Mr. Keetch
To ask the Secretary of State for Defence what estimate he has made of the time needed for the Smart Procurement initiative to be understood, and implemented within his Department; and if he will make a statement. [109692]

§ Dr. Moonie
The implementation phase of the Smart Procurement Initiative concludes on 1 April 2000, when the main structural changes will be complete. A recent survey across much of the Department and defence industry has shown that the case for Smart Procurement has been made, and that it is understood and accepted. There can be no reversion to the old ways of doing business. We will continue to reinforce the message to sustain the momentum of the initiative as the tangible benefits come to fruition.
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§ Mr. Keetch
To ask the Secretary of State for Defence what arrangements are in place to ensure that the proprietary information and expertise of competitors in defence procurement projects are protected under the Smart Procurement initiative; and if he will make a statement. [109691]

§ Dr. Moonie
In order that the maximum value can be obtained from Smart Procurement, we are looking to industry to be full participants in open discussion with the Department. The maintenance of confidentiality in respect of commercially sensitive and proprietary information has always been fundamental to the defence procurement relationship. The introduction of Smart Procurement has not changed this principle, and we continue to restrict the disclosure of such information, except where a contractor has specifically approved release.
Practical working arrangements are necessary to allow contractors to conduct dialogue within the acquisition teams in a framework which encourages the generation of ideas without disclosing commercially sensitive or proprietary information to competitors. The measures taken to protect such information vary according to circumstances, but can include formal Confidentiality Agreements or limiting the number of individuals having access to sensitive information, drawing from existing codes of practice as appropriate.

§ Mr. Keetch
To ask the Secretary of State for Defence how co-operation with industry after contract signature under Smart Procurement differs from post-signature supplier co-operation under the previous procurement system; and if he will make a statement. [109693]

§ Dr. Moonie
Prior to the Smart Procurement Initiative our relationships with suppliers did not always maximise opportunities for joint approaches to problem solving, and arms-length interaction could hamper fully effective communications. One of the key elements of Smart Procurement is an improved relationship with industry, under which we seek to derive maximum benefit from better working practices and shared objectives. We are promoting a culture of greater openness and trust: a "no surprise" culture where co-operation, consultation and the sharing of data will facilitate success. Following contract signature therefore, and in the context of this more open approach, the MOD and industry will remain jointly focused on the delivery of the defence equipment capability to agreed performance parameters, within cost and on time.
There is no conflict between robust contracting and mutually beneficial team working.