Fleet News

Two contenders line up for £400m MoD deal

COMPETITION for the Ministry of Defence's colossal £400 million, 10,000-strong white fleet contract has become a two-horse race. The MoD has whittled down the shortlist of five consortia that originally tendered for the business to just Lex Service and Fleetserv, a joint venture between Interleasing, PHH Vehicle Management and Ryder.

These two already supply fleet services to the MoD, with Ryder/ PHH Europe responsible for the British Forces' 2,500-strong German fleet, and Lex Vehicle Leasing running the Royal Air Force's 2,800-strong white fleet in the UK. Theoretically, the two consortia could share the new deal because the MoD invited tenders for four specific regions - Scottish, Central, Southern and London - but sources suggest this is unlikely to produce the savings desired by the Ministry.

The National Audit Office has also revealed that the MoD is 'arranging an independent external review of its investment appraisals comparing the privately financed deals with a public sector comparator.' This has prompted speculation that the MoD is considering keeping its fleet in-house, particularly after an NAO report revealed that the RAF's contract with Lex had not produced the savings originally forecast, despite praising Lex's service levels and efficiency.The latest tender is on a negotiated basis, with the MoD seeking payment mechanisms that will incentivise the winning supplier 'to minimise the number of vehicles needed'.

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