Here is an interesting parliamentary question and answer from the last few days
Madeleine Moon (Bridgend, Labour)
To ask the Secretary of State for Defence pursuant to the answer of 19 January 2012, Official Report, column 940W, on Harrier aircraft,
(1) what monetary value was given to the associated support equipment included in the sale of the Harrier aircraft;
(2) what the original cost was of the associated support equipment included in the sale of the Harrier aircraft to the US; and if he will make a statement;
(3) which company or companies invoiced his Department for (a) £0.7 million and (b) £0.4 million for consultancy services associated with the sale of Harrier aircraft to the US; what the consultancy services provided were; and how many hours of work, by how many consultants, these payments were for.
Peter Luff (Parliamentary Under Secretary of State (Defence Equipment, Support and Technology), Defence; Mid Worcestershire, Conservative)
The sale value of 72 Harrier airframes spares and associated support equipment to the US Government was negotiated and agreed as a consolidated package.
The majority of support equipment used to support the former Harrier fleet has been acquired since 1996 but information on the original purchase cost is no longer held. At the time of the sale to the US Government the value of support equipment recorded on the Ministry of Defence Supply Central Computer System (SCCS) was approximately £15 million. However, not all equipment used to support the Harrier is registered on the SCCS.
External assistance to both the termination of the Harrier contracts (£0.7 million) and the disposal of the aircraft (£0.4 million) was obtained through an existing contract with AlixPartners. The support provided covered the provision of specialist negotiation assistance in the closure of the Harrier airframe and engine contracts, and negotiation advice and assistance in the preparation for, and conduct of, sale negotiations with the US. This was provided by a core of three consultants, with occasional additional support from two senior partners and represented a total of 206 man-days.
Three consultants from Alix Partners, supported on occasion by a couple of others, charged the MoD £1.1 million for 206 chargeable days.
That works out at an average of £5,339 and 81 pence per day, unless of course there was a shed load of travel and subsistence claims in there as well.
Without knowing what they actually did it is difficult to argue whether 206 man days of work is actually a realistic number for drafting a contract agreement to cover selling a handful of second hand jets plus bits and pieces to an ally but it would be interesting to see what the US Department of Defence paid for their contract due diligence work.
However, sidestepping the shock horror at the amount or days, this is exactly what happens when you get rid of ‘pen pushers’ or highly qualified commercial contract lawyers depending on your perspective. The costs don’t go away, the work needed doesn’t go away, it just gets outsourced or contractorised and with little expertise in house the degree of checking on the checkers is of course limited.
Most large organisations employ their own legal and contract expertise but the MoD it seems, does not have the resources to arrange the disposal of assets to a key partner.
The Government and MoD should be rightly pilloried for this, £1.1 million in professional services might seem like a drop in the ocean, but it is real money.
They should however, not be condemned for having to use outside resource but for the fact that they have pandered to the ill informed and shrill voices in the media and parliament and not made a sufficiently robust case for the value and value for money of the MoD Civil Servant.