QinetiQ and MOD sign 5-year, £951m pricing agreement for Test, Evaluation and Training Support services

03 Mar 2008

QinetiQ and the MOD have signed a firm price agreement confirming price, volume and availability for the Long Term Partnering Agreement (LTPA) for Test and Evaluation (T&E) and Training Support services for the next five years through to March 2013. The MOD will pay £951m across the second five year term (having paid £964m for the first five year period).

"We needed to maintain sovereign capabilities but also reduce overall costs and this ongoing partnering arrangement with QinetiQ allows us to achieve this," stated MOD Weapons Commercial Director, Rob Bellis. "Over the first five years we've not only retained access to the necessary facilities to ensure front line capability is maintained but we’ve done so at a much reduced cost. The LTPA has also enabled QinetiQ to invest in the facilities thereby providing MOD with an improved service for the agreed firm price."

The LTPA contract was first signed in February 2003 and is still one of the largest of its kind in the UK. Valued at £5.6bn over 25-years to 2028, the LTPA includes five yearly reviews and a 25 year extension option. In the first five-year period QinetiQ delivered annual cost savings of £22m. Savings of some £700m across the life of the contract are on target to be achieved.

Under this contract QinetiQ manages 18 core MOD owned sites and is responsible for the provision of Non Tasking Services. These include delivering a T&E and Training Support capability, maintaining associated equipment, land and buildings, plus delivering an investment programme to ensure that the capability is maintained and developed to meet MOD evolving needs.

During the first five years of the contract, QinetiQ has been responsible for transforming the performance of the services provided. This has included increasing throughput in areas of high demand to deliver capability to the evolving requirements of the front line while continuously improving the efficiency and effectiveness of the capabilities. Improved performance within the capabilities has enabled QinetiQ to return a total of £15m in gain-share and other levies back to MOD.

Key Performance Indicators (KPIs) for the first period measured safety and QinetiQ's ability to deliver to quality and to time and in all cases the demanding targets agreed have either been met or exceeded. The minimum customer satisfaction target was set at 80% with an average of 98.74% being achieved.

"The agreement of the firm price for the next period is recognition of QinetiQ’s ability to both deliver value for money to the MOD and maintain many of the critical facilities it needs," added Mary Carver, MD of QinetiQ's iX Managed Services sector. "QinetiQ's continuous improvement programme has also delivered a safer working environment for staff and customers plus reduced its environmental impact upon the local community. By investing time and effort in performance management, staff are also more competent and have better understanding of the customer requirements."

QinetiQ People Who Know How
QinetiQ and MOD sign 5-year, £951m pricing agreement for Test, Evaluation and Training Support services