§ The Parliamentary Under-Secretary of State for Defence (Dr. Lewis Moonie)I am pleased to announce that, after 12 months negotiations and restructuring work, the MOD has successfully concluded a long term partnering agreement (LTPA) with QinetiQ for the78WS delivery of the MOD's Test and Evaluation requirements. MOD customers examined a number of options for the delivery of future test and evaluation services and concluded that a long term partnering agreement with QinetiQ was the approach most likely to maximise value for money and ensure the continuing success of these key capabilities.
The new contract, which will take effect from 1 April 2003, will replace the current short-term Facilities Management Contract, which was put in place at QinetiQ vesting and which is due to expire on 31 March.
The LTPA contract, which is worth up to £5.6 billion to QinetiQ over its 25 year life, will progressively introduce efficiency measures and innovation in order to reduce overall Test and Evaluation costs. The contract, which will be the subject of periodic review at agreed intervals, is expected to deliver savings to MOD of around £700 million (at current prices) over its lifetime.
The LTPA establishes a framework within which the MoD's relationship with its contractor can grow. QinetiQ will be given opportunities to develop further innovation and make proposals to achieve better value for money and, based on performance, there will be opportunities for business growth.