Treasury OKs MoD's contractor-run procurement plan: report

Thu Apr 25, 2013 1:51am BST

Britain's Defence Secretary Philip Hammond arrives to attend a Cabinet meeting at Number 10 Downing Street in London March 12, 2013. REUTERS/Andrew Winning

Britain's Defence Secretary Philip Hammond arrives to attend a Cabinet meeting at Number 10 Downing Street in London March 12, 2013.

Credit: Reuters/Andrew Winning

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(Reuters) - The Ministry of Defence's plan to explore letting a company manage military-equipment procurement has been approved by the UK Treasury, Bloomberg reported, citing a person familiar with the matter.

HM Treasury was unavailable to comment on the matter.

Bloomberg said Defence Secretary Philip Hammond would on Thursday outline the final stage of plans to make the Defence Equipment and Support agency into a government-owned and contractor-operated body, known as a "go-co". (link.reuters.com/xah67t)

As in many other European countries, Britain's defence ministry has been faced with procurement-cost overruns in response to budget pressures, and has been casting about for possible savings.

Bloomberg said potential bidders to fill the role include U.S. contractors Jacobs Engineering Group Inc, Bechtel Group Inc, Fluor Corp, CH2M Hill Inc and KBR Inc, while British company Serco Group Plc may also be interested.

(Reporting by Richa Naidu in Bangalore; Editing by Eric Walsh)

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