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Defence Reform Bill: what you need to know

Summary: As part of the UK Government’s attempt to reduce defence spend and cut the size of the MOD without losing operational capability, new legislation has been introduced in the House of Commons.

The UK Defence Reform Bill aims to improve procurement and support of defence equipment and to strengthen the reserve forces.

If passed, the legislation will reform both single-source procurement practices and the structure of the Defence Equipment & Support (DE&S) procurement body and should provide some positive news for defence contractors and private firms across the UK.

Defence Equipment & Support

Part one of the Bill focuses on the reform of the DE&S organisation, which is responsible for the procurement and support of defence equipment and the supply of logistics to the Armed Forces.

This part of the Bill relates to arrangements which the Secretary of State may make for a commercial organisation to provide defence procurement services under contract with a Government Owned and Contractor Operated (GOCO) company in future, should ministers decide the model offers the best value for money.

DE&S has previously been criticised for allowing expensive projects to run out of control, partly because of too much meddling from outside forces and stakeholders within the MOD. Allowing private companies to gain command of procurement services is likely to be extremely good news for firms across the UK.

Single Source Procurement

The second part of the Bill creates a new statutory framework governing Single Source Procurement and a small Non Departmental Public Body (NDPB) – the Single Source Regulations Office – to oversee the framework, replacing an existing NDPB set up in 1968.

Defence Secretary Philip Hammond recently announced the SSRO to oversee contracts that need to be awarded without competition due to the sensitive nature of the requirements

By introducing the independent body, it is thought that hundreds of potential defence suppliers will be able to enter the procurement process and compete for contracts previously unavailable due to their sensitive military nature.

Reserve Forces

The legislation also seeks to reform the current remit of the Reserve Forces in the third part of the Bill.

It seeks to extend the current powers to call out reservists; allow the Secretary of State to make payments to reservists employers’ to incentivise them to employ reservists; and provide greater employment protection for reservists by allowing a right of access, without a qualifying employment period, to the Employment Tribunal for unfair dismissal from their civilian employment if the dismissal relates to their reserve service.

The Bill will also change the name of the British Territorial Army to the Army Reserve.

Minister for Defence Equipment, Support and Technology Phillip Dunne said of the aims of the Defence Reform Bill:

“The Defence Reform Bill makes important changes to defence acquisition and the Reserve Forces. These will enable us to drive forward the transformation of defence and ensure our armed forces continue to get the capabilities they need as efficiently as possible.”

The Government Bill was presented to Parliament on 3 July 2013. It is expected to have its second reading debate on 16 July 2013.

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