The Ministry of Defence has announced today that it intends to sign a 13-year logistics programme contract with Leidos following successful negotiations.
Confirmed last month to be the preferred bidder for the contract, Leidos will run and improve efficiencies in warehousing procurement and stock control of food, clothing, general and medical supplies as well as storage and distribution.
The contract is part of a transformation of the MOD’s Logistics Commodities and Services, known as LCS(T), and aims to provide these services in line with industry best practice while ensuring best value for money for the UK taxpayer.
The new arrangements will provide significant operational effectiveness by delivering improved responsiveness and agility to supplying our Armed Forces.
Minister for Defence Equipment, Support and Technology, Philip Dunne MP, said:
I am pleased we are able to confirm this transaction with Leidos which will bring the military’s logistics, commodities and support services up to the standard of industry best practice, deliver more efficient and effective processes across the supply chain and enhance the quality of support provided to our Armed Forces.
This will generate significant savings of around £0.5 billion over the life of the contract, representing good value for money for the taxpayer and, in due course, will deliver state of the art fulfillment to our inventory management processes and systems. The transaction will involve the TUPE transfer of some 1,250 staff.
MOD Chief of Materiel (Land), Lieutenant General Sir Chris Deverell, said:
This contract meets the changing military requirements of our Armed Forces whilst also maintaining levels of quality and service.
By working with Leidos, we will introduce modernise our commodity procurement, warehousing, and distribution and secure a supply chain that will be responsive to the needs of the military, whilst at the same time saving money for Defence.
Team Leidos consists of Leidos, a US company, supported by its key subcontractors Kuehne+Nagel and TVS Supply Chain Solutions. Together they are a skilled and experienced team of private sector defence and logistic specialist partners with the global expertise to deliver the transformation required. The programme represents a significant financial investment in new facilities, including £90 million in the construction of a defence fulfilment centre next to the existing LCS site at Donnington in Shropshire, and £40 million in new IT systems to provide the modern and efficient logistics services that the UK Armed Forces need.
The contract award is planned for April 2015.