Defence Secretary Liam Fox has terminated the contract with preferred bidder the Metrix Consortium which includes Laing O’Rourke, technology services firm QinetiQ and facilities management specialist Sodexo.
Metrix was appointed preferred bidder for the Defence Training Rationalisation project in January 2007.
The scheme intended to combine the technical and engineering training for the Royal Navy, Army and Royal Air Force on a single site at St Athan in South Wales.
The government is now claiming the consortium could not come up with value-for-money proposals.
Fox said: “The Metrix Consortium was appointed as preferred bidder in January 2007 subject to it developing an affordable and value for money contract proposal.
“Given the significance of this project and the opportunity to provide a world-class training facility, the Ministry of Defence has worked tirelessly to deliver this project.
“However, it is now clear that Metrix cannot deliver an affordable, commercially-robust proposal within the prescribed period and it has therefore been necessary to terminate the DTR procurement and Metrix’s appointment as preferred bidder.
“Technical training, collocated on as few sites as possible, remains in our view the best solution for our Armed Forces. Equally, St Athan was previously chosen as the best location on which to collocate that training for good reasons, and we still hope to base our future defence training solution there.
“We will however now carry out some work before finalising the best way ahead; including to confirm both our training and estates requirement, and the best way to structure the solution that will meet them.
“To ensure momentum is not lost, work on the alternative options will begin as soon as possible and we hope to be able to announce our future plans in the spring.”
Charles Barrington, Chairman, Metrix UK said: “Metrix, its partners and the MOD have all worked extremely hard and in close partnership to deliver a solution which offers value for money combined with the very best technical approach to training and a rationalised estate.
“Despite the best efforts of all concerned, the combined effect of an extremely tough economic environment and numerous commercial and technical challenges meant that the project could not be delivered within the framework and timescale originally intended.
“I would like to personally thank all of our supporters for their hard work, support and dedication to the DTR project.”