A report published by the Public Accounts Committee has urged the UK Ministry of Defence (MoD) to take necessary measures to promote competitive procurement practices.
According to the report, nearly half of the equipment procured by the MoD is not subject to competition.
The report noted that there are certain situations when procurement cannot be done competitively and the defence department is required to use a single supplier.
However, the research suggested that the MoD should be able to take measures to reduce levels of non-competitive procurement in line with government policy.
The Single Source Contract Regulations were initially introduced in 2014 and are said to have led to some improvements in transparency regarding contract costs.
The report also highlighted that there are several current contracts that the UK MoD has not brought within the scope of the regulations.
In addition, levels of ‘cannibalisation’, or taking parts from one vessel in order to keep others operational, are noted to have increased by 49% within the Royal Navy over the last five years.
The UK MoD has faced issues regarding bringing the Type 45 destroyers and Astute-class submarines into service with the Royal Navy, despite making significant investments to support the vessels.
Furthermore, the report suggests that the defence department does not have the necessary data, controls and processes to routinely monitor cannibalisation and its associated costs across the Royal Navy.
Public Accounts Committee chair Meg Hillier said: “This wide-ranging report highlights a need for the MoD to toughen up oversight and scrutiny of the way it conducts aspects of its business.
“In particular it is concerning that the Ministry still lacks a clear strategy to drive competition in its procurement of equipment, something that will be vital if it is to make planned savings of £1.7bn.
“Some suppliers are refusing to fall into line with contracting regulations that have been in place since 2014.
“This is unacceptable, and government must ensure the Single Source Regulations Office has the teeth to do its job properly.”