MoD warned on spending
The Ministry of Defence has been told to review its policies on non-competitive procurement following an investigation by parliament's financial watchdog.
Existing guidance at the MoD was found to be too widely dispersed and out-of-date, according to the report released today by the National Audit Office.
Over the last five years one quarter of the annual £9bn defence equipment and services budget had been spent without a competitive tender, the NAO said.
But the NAO was not satisfied that all guidance on how such procurement should be negotiated was either accessible or up-to-date.
The MoD uses a government profit formula agreed with the CBI in 1968 and the concept of ‘no acceptable price, no contract’ introduced in 1992 to ensure value for money.