HC Deb 12 March 2001 vol 364 cc412-3W
Mr. Drew

To ask the Secretary of State for Defence what steps are taken to ensure that small consultancy companies are given a fair chance to compete for contracts. [152773]

Dr. Moonie

[holding answer 8 March 2001]: The use of competition to select contractors and sub-contractors in order to secure best value for money is the cornerstone of Ministry of Defence's acquisition policy. Suppliers, whether they are small and medium enterprises or large corporate groups, are encouraged to compete for requirements in excess of certain value thresholds (£93,000 for the Official Journal of the European Community, and £250,000 for the MOD Contracts Bulletin for consultancy requirements), which are widely advertised. For low value requirements, formal competition may not be considered cost-effective (in respect of bidding and resource costs), and in such cases a supplier may be selected on the basis of expertise or past performance for example. The principle of fairness throughout the acquisition process is not only MOD policy, but is enshrined in UK and European law.

Mr. Drew

To ask the Secretary of State for Defence if he will make a statement on his Department's policy on the imposition of a turnover threshold in relation to competition for consultancy assignments. [152774]

Dr. Moonie

[holding answer 8 March 2001]: The Ministry of Defence needs to be assured that potential bidders can fulfil its requirements, and therefore seeks only to invite tenderers with whom it is prepared to place a contract. This not only helps to reduce the cost of bidding to industry, but it provides reassurance that value-for-money defence capability is being delivered. Financial status is just one of the factors taken into account when considering potential bidders eligibility. Turnover size may be employed as part of the calculation to determine whether a supplier has adequate resources to undertake a particular contract, whether for consultancy or other goods or services. This process accords with the central unit on procurement's guidance on good professional practice.