§ Mr. Jim CunninghamTo ask the Secretary of State for Defence how many defence contracts made between 1997 and 2001 are expected to over-run in(a) cost and (b) time. [17242]
§ Dr. MoonieThe information requested is not held centrally and could be provided only at disproportionate cost.
§ Mr. Jim CunninghamTo ask the Secretary of State for Defence if he will make a statement on the use of cost-plus contracts. [17243]
§ Dr. MoonieCost-plus contracts are the contracting method of last resort. They now account for less than 1 per cent. of the Ministry of Defence's business (both by value and number). Within a stated limit of liability the contractor is paid all costs reasonably and properly incurred, together with a sum for profit, calculated by applying either a percentage profit or a fixed fee to the costs so incurred. The rate of profit applied to cost-plus work is calculated by reference to the Government Profit Formula which includes a "Non Risk" rate, which is set below that used for prices agreed before work commences; thus the MOD recognises the reduced risk to the contractor.
§ Mr. Jim CunninghamTo ask the Secretary of State for Defence if he will make a statement on(a) partnering, (b) smart acquisition, (c) post-costing and (d) should-cost-data in UK defence procurement. [17244]
§ Dr. MoonieI will write to my hon. Friend and a copy of my letter will be placed in the Library of the House.
§ Mr. Jim CunninghamTo ask the Secretary of State for Defence what percentage of defence procurement deals were put to competition in the last three years; and if he will make a statement. [17245]
§ Dr. MoonieObtaining the greatest advantage from competitive leverage at prime and sub-contract level remains our primary tool in defence procurement. Over the last three financial years, the percentage of Ministry of Defence contracts (including amendments), by value, placed by competition was as follows:
Financial year Percentage 1998–99 68 1999–2000 71 2000–01 65
§ Mr. Jim CunninghamTo ask the Secretary of State for Defence what are the responsibilities of the integrated project teams in procurement; and if he will make a statement. [17246]
§ Dr. MoonieThe Integrated Project Team (1PT) was born out of Smart Procurement's objective to deliver projects within the performance, time and cost parameters approved at the time that major investment decisions are taken. The IPT is responsible for managing the project from concept to disposal.
This means that the TT is responsible for translating the equipment capability customer's requirements into an output-based statement of what a system or equipment must do to meet these requirements. The IPT devises and 765W costs equipment solutions, and produces the material required to support the customer's main gate approval, and manages the development, manufacture, in-service support and eventual disposal of the equipment.
§ Mr. Jim CunninghamTo ask the Secretary of State for Defence what percentage of contracts(a) had an agreed fixed price at the start and (b) arrived to cost and on schedule in the last 12 months. [17247]
§ Dr. MoonieThe latest available data relate to the 12 month period from October 2000 to September 2001. During this period, over 99 per cent. of contracts by number had agreed prices at the outset.
Information on the percentage of contracts that arrived to cost and on schedule is not held centrally and could be provided only at disproportionate cost.