British lawmakers have urged the Ministry of Defence (MoD) to review its practice of outsourcing services amid allegations that some contractors have dropped standards to boost profits.
In its latest report, the Defence Committee of the House of Commons said outsourcing appeared to be the MoD’s default position, with little consideration given to providing services in-house.
The committee said in the report: “Whilst the MoD can, and should, outsource activities which are not part of its core function, it should also give more consideration than it does at present to the potential to provide these services in-house, if doing so represents better value for money.”
The report criticised the performance of Capita, the largest business process outsourcing and professional services company in the UK.
The outsourcing giant failed to meet recruitment targets for the British Army, and its performance as the chosen partner for the Defence Infrastructure Organisation was a “disaster,” the report said.
“Yet, despite previous performance, Capita were granted the Defence Fire and Rescue contract” and tasked to protect British defence estates and property from fire risks, the committee said.
The report said that Capita is already starting to drop its standards. The firm is said to have been engaged in “risk assessments” to establish if manning levels needed to be altered.
The committee warned that the firm may intend to cut manning levels “under the guise of risk management,” which poses a risk to fire safety on the sites in question.
The MPs added that it was “an absurd state of affairs” that the ministry was not allowed to look at a contractor’s previous performance when assessing a bid, a state of affairs that needs to be “rectified immediately.”
Committee member Mark Francois said: “The performance of certain sub-contractors is well-known both within industry and the defence community.
“Given the MoD’s determination to press ahead with outsourcing ancillary services, it is an absurd state of affairs that it is not possible to take into account a bidder’s past performance.
“Ministers should use the Procurement Bill announced in the Queen’s speech to change the rules for awarding new contracts.”
Capita rejected the criticism and said “the evidence shows our record of delivery on this contract is strong.”
A spokesperson said: “Our joint recommendations over resourcing levels at any MoD site have to be endorsed by the MoD, and ultimately approved by the individual site’s military leadership team. Any such decision would follow on from a thorough review of fire risks.”
An MoD spokesperson said: “We use a range of in-house and contractor staff to deliver defence outputs at maximum value for the taxpayer, but without compromising on services or safety.”
