Single Source Contract (Amendment) Regulations 2018 — House of Lords, 2018-07-09
Topic: Defense
Frederick Richard Penn Curzon (Conservative, Centre-right): I will vouchsafe to the noble Lord that my note is ambiguous on that point and I think, therefore, that I should write to him. We have identified 8% to 10% of single-source spend, which makes it more or less clear that we are talking about single-source spend as a whole rather than that proportion of the spend that comes within the framework. But I will confirm that The noble Lord asked me about the exclusion relating to international co-operative programmes which would require the consent of the suppliers involved. He made a very good point about obtaining consent, which was a matter on which we deliberated long and hard. We came to the conclusion that to remove supplier consent altogether would mean that we would have to seek agreement with partner nations, which in practice might sometimes be difficult to achieve. We believe that this proposal represents a pragmatic approach. In fact, we are reassured to note that such agreement on several large contracts has already been achieved with the supplier. Since the framework came into force in December 2014, 11 contracts have been made into qualifying defence contacts on amendment—that is, with the consent of the supplier in question—with a total value of more than £10 billion. The background to that is that many suppliers recognise that the Government are fully committed to implementing the framework and accept that it is in their long-term interests to co-operate with it The noble Lord asked me about how the intelligence exclusion would work in practice. Under current legislation, single-source contracts relating to "intelligence procurement" would be excluded from the framework. The problem with that is that experience has shown that there is confusion over exactly how this definition is applied. That is why we have proposed the amendment. Under this change, single-source contracts would be excluded where complying with the single-source legislation would involve having to release information to the SSRO that it is not authorised to see. That significantly raises the bar required for exclusion It might be easiest if I gave a hypothetical example. It may be that we sign a single-source contract allowing us access to a specific port overseas in support of a sensitive operation. If this becomes a qualifying defence contract, the reporting requirements under the framework would mean disclosing to the SSRO who the contractor in question was. That would very quickly reveal the location and the likely purpose behind the contract. It is that aspect that we wish to keep classified because of the risk of a negative impact on national security The noble Lord asked me when we will respond to the review of single-source legislation. I can tell him that when my right honourable friend the Secretary of State completed his review of single-source legislation last December, several proposals were identified which could improve the operation of the framework, but he asked officials to carry out further work on how these might be implemented, so as to avoid any unintended consequences. Part of that included an extensive process of cross-Whitehall engagement to ensure a fully joined-up position, as well as additional engagement with key stakeholders to take forward the proposals. That work is nearing completion, and we expect to publish our full response shortly Finally, on the noble Lord’s last question about the NATO summit and when we expect to announce headline figures from the modernising defence programme, unfortunately, I cannot promise anything this week—contrary to the hopes that I and others have expressed at similar previous occasions. We are endeavouring to make the delay in the announcement as short as possible, and I shall be sure to give the noble Lord as much warning as possible before that event.