Defence Training Review (DTR)

QinetiQ Group plc
31 January 2008


QinetiQ Group plc

31 January 2008

Ministry of Defence written statement on Defence Training Review (DTR)
Rationalisation Programme

QinetiQ Group plc ('QinetiQ'), the international defence and security technology
company, draws attention to the following written statement on the Defence 
Training Review (DTR) Rationalisation programme, issued by the Ministry of 
Defence (MOD) today, the full text of which is included below.

Responding to today's announcement by the Minister of State for the Armed Forces
regarding the DTR programme, Graham Love, Chief Executive Officer at QinetiQ
said: 'We welcome the commitment shown to Package 1 in today's statement.  It is
an important milestone towards the delivery of the largest part of the DTR
Programme.  The Programme and the Metrix solution provide the chance to make a
step change in training delivery supported by a bespoke environment for
tri-service training for the 21st century.  We continue to expect to reach
financial close on Package 1 in 2009 and will continue to support any work with
the customer to develop options for Package 2.'

QinetiQ is a joint lead company in Metrix UK, a consortium that was appointed
preferred bidder on Package 1 and provisional preferred bidder on Package 2
under the Government's DTR programme in January 2007.  For further information
see: www.MetrixUK.com.

The Minister of State for the Armed Forces (Rt Hon Bob Ainsworth):
'This statement updates the House on the Defence Training Review (DTR)
Rationalisation Programme and BORONA Programme following announcements made last
year on DTR on 25 October 2007  (Official Report, column 15WS) and BORONA on 12
September 2007 (Official Report, column 122WS).  The BORONA Programme will
establish HQ ARRC, 1 Signal Brigade and 102 Logistics Brigade in enduring bases
in the UK.

Work continues on DTR Package 1, which aims to deliver training for Engineering
and Communications and Information Systems at a new site at St Athan in South
Wales. It is still anticipated that the Department will be in a position to
consider the main investment decision in the spring of this year.  As part of
this work to secure contract signature as soon as possible for Package 1, a
programme of risk reduction work to the value of £9.5M has been proposed with
the Metrix Consortium. A Departmental Minute outlining this activity was laid in
the House on 29 January. The proposed activities will be focused on the property
and the estate, in particular securing planning consent, and development of the
training solution. The cost of this work is included in Metrix's overall bid and
is at no additional cost to the Department.

After reviewing further options for Package 2, which aims to provide training
for Logistics and Personnel Administration, Police and Guarding, Security,
Languages, Intelligence and Photography, it has become apparent that the Metrix
Consortium is not able to offer an affordable and acceptable Package 2  solution
and, as a consequence, the competition has been brought to a close. The decision
has therefore been taken to remove Provisional Preferred Bidder status from
Metrix. This does not have any impact on the Department's commitment to the DTR
Programme, and particularly in pursuing a Package 1 Metrix solution with vigour,
but it does allow the Department to focus its efforts on alternative approaches
for Package 2, which are not legally constrained by the original terms of the
procurement. These alternatives may continue to be open to Metrix and other
potential industry partners. Options will continue to aim to rationalise and
improve the estate, maintain the Department's commitment to its supervisory care
responsibilities under the Blake agenda, and match the scale of investment in
training modernisation to what is affordable. A further DTR update on both
Packages will be provided later this year after the appropriate investment
decisions are made.

In addition, I wish to advise the House on Defence Estate solutions related to
both the DTR and BORONA Programmes.  Following the announcement to release
Princess Royal Barracks, Deepcut, for disposal on 8 January 2008 (Official
Report, column 7WS), and further work on the Defence estate, an agreement has
been reached that, in principle, the Defence College of Logistics and Personnel
Administration (DCLPA) and the Director Royal Logistics Corps (DRLC) will
relocate to Worthy Down and Southwick Park.  This move, which will consolidate
elements of DCLPA and logistics training already on these sites, will allow the
closure of the Deepcut site, currently anticipated to be not before 2013.

A decision has also been taken that, under the BORONA Programme, both 1 Signal
Brigade and 102 Logistics Brigade returning from Germany will move to Cosford.
This will maintain a significant long term Defence presence on this site and
continue to provide the associated benefits that this brings to the local
community and to the West Midlands following the relocation of the DTR Package 1
units currently based there. Furthermore, Metrix propose to establish a Learning
Centre and Design facility at the Cosford site which may also generate other
business and employment opportunities for the local area.

The BORONA Programme Team (BPT) will now develop proposals to deliver
construction and service requirements at Cosford. In addition, the BPT will also
draw up detailed plans and undertake wide consultation with all interested
parties, including local authorities, health, education and welfare providers as
well as the trades unions.  A key piece of this consultation work will involve
communication and discussion with the German authorities and with our locally
engaged workforce in Germany and their representatives.  This detailed planning
and consultation will review all possible options and will result in
recommendations, including the actual timings of the moves, being made for a
final investment decision in Spring 2009.

The implications of these moves on our people will continue to be handled
sensitively and in full consultation with Trade Unions and staff.  However, both
of these estate solutions are still subject to the appropriate final investment
decision being made, after which further updates will be announced.'

Contacts:

QinetiQ investor relations:  Adrian Colman [phone] / [phone]
[e-mail]

QinetiQ press office:  David Bishop [phone] / [phone]
[e-mail]



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