MoD work up for grabs
Page 12
If you've noticed an error in this article please click here to report it so we can fix it.
by Lee Kimber • Millions of pounds worth of warehousing and distribution business will be contracted out by the Army, Navy and Air Force over the next few years as the Ministry of Defence implements cuts.
All three forces have begun wide-ranging reviews of their massive warehousing and distribution operations designed to match their logistics capacity to the smaller-sized fighting units introduced during the past five years' of defence cuts.
The army is leading the way with the £150m-plus sale of the Army-Based Repair Organisation (ABRO), which services its thousands of LGVs through eight national workshops. It has drawn up a secret shortlist of six companies to bid for a detailed contract to be released next month. An award is expected next April.
But the biggest contract will be the army Logistics' Corps distribution network for the UK, Germany, Italy and Bosnia, which is expected to go out to tender by August.
"They're going to put all their depot-based operations to a market test and compete for quality," a source close to the army says. "Even they can't quantify it but it is significant; really significant."
A spokesman for a company with close links to all three defence forces confirms that the RAF and Navy have begun similar reviews of their own distribution operations.
This week the MoD confirmed that it is investigating how many of its distribution operations in all three services could be privatised.
It cannot quantify the size of the warehousing business that will be up for grabs—but it includes equipment from lightbulbs to tanks required for the working lives of 318,528 service personnel and 125,426 civilian staff. Only a fraction of that business is currently contracted out—clearing the way for a bonanza for hauliers.