Bernard Gray

This article is part of the Revolving Door project of Spinwatch.

Bernard Gray is a former British Ministry of Defence (MoD) procurement chief and ex-special adviser (SpAd) to two Labour Party defence ministers.

Revolving Door

Since stepping down as chief of defence material in 2015, Gray has become a paid consultant to the MoD , McKinsey & Company and Immediate Media through his own consultancy company, Pole Star Strategy.

Background

Gray began his career with five years in investment banking for Bankers Trust and Chase Manhattan in London and New York, before working for almost ten years as a journalist on the Financial Times Group.

From 1997 to 1999, Gray was special adviser to former Secretaries of State for Defence George Robertson and Geoff Hoon, where Gray directed the 1998 Strategic Defence Review.

From 1999 to 2001, Gray was Strategy Director of the UK publishing and events division of United Business Media, CMP Information. He was heavily involved in the proposed Carlton-UBM merger. From January 2003 to July 2006, he was a non-executive director of Cable and Wireless. He was also Chairman of the Remuneration Committee from January 2003 to 31 March 2006. He has also served as non-executive director for the UK broadcaster Five.

In October 2005, Gray was appointed as Chief Executive of TSL Education Limited (publishers of the Times Educational Supplement) when it was acquired by Exponent.

In December 2010 he was appointed to the role of chief of defence materiel in the MoD (a senior post in the British armed forces created in April 2007) leading the Defence Equipment and Support Organisation. He replaced General Sir Kevin O'Donoghue.

2009, Gray's defence procurement report

In 2008, the former Defence Secretary John Hutton commissioned Gray to undertake an independent review of defence acquisition published in October 2009. Although publication was initially moved from July 2009 until after the general election - prompting The Spectator to suggest that it had been "suppressed" - the confidential report was leaked to The Sunday Telegraph in August 2009. The Times highlights some of the more "damning" extracts from the report:

• The department is running a "substantially overheated equipment programme, with too many types of equipment being ordered for too large a range of tasks at too high a specification".
• the MoD is "harming our ability ... to conduct difficult current operations".
• "The problems, and the sums of money involved, have almost lost their power to shock, so endemic is the issue."
• "It seems as though military equipment acquisition is vying in a technological race with the delivery of civilian software systems for the title of ’world’s most delayed technical solution’. Even British trains cannot compete."
• "How can it be that it takes 20 years to buy a ship, or aircraft, or tank? Why does it always seem to cost at least twice what was thought? Even worse, at the end of the wait, why does it never quite seem to do what it was supposed to?"
• "Agile enemies such as the Taleban are unlikely to wait for our sclerotic acquisition systems to catch up".

Revolving door

Breaching ACOBA's rules

In December 2015, Gray set up a consultancy company called Pole Star Strategy. The company states that it is:

'providing senior management advice to private sector organisations and foreign friendly governments in matters such as corporate direction and strategy, negotiating skills, corporate transformation, financial reconstruction and capital change, business recovery and turnaround skills.'

Pole Star was awarded a contract by the MoD to carry out a review into the state of the procurement landscape. ACOBA was not approached for advice about this and subsequently 'was unwilling to give retrospective approval for the establishment of Pole Star Strategy or [Gray's] subsequent appointment with MoD'.

Commissions with McKinsey & Company and Immediate Media

In late 2016 Gray asked for ACOBA's approval regarding his commissions - two with McKinsey & Company and one with Immediate Media - through his company Pole Star Strategy. . The Committee said:

'When considering your commission with McKinsey & Company, the Committee took into account the following:

• 'The commission is based overseas and will involve working with the US Army [...]. The UK Government is supportive of this work.
• You have no intention of working in the UK defence sector.
• Your role as CDM was primarily related to developing and setting the strategic direction of DE&S. You were involved in some selection decisions, and in enforcing and renegotiating some contracts. Your involvement was always within due process and procedures set by the MoD Commercial Director through whom all actual contracting actions were taken.
• You would have had access to MoD plans and budgets relating to DE&S. Such plans and budgets have been substantially changed by your successor so your insider knowledge is now very limited.
• You were involved with McKinsey & Company and their selection for MoD contracts. This included a contract to review the Equipment Support Plan and identify the scope for achieving savings. You directed this work and took action on McKinsey’s recommendations.
• McKinsey’s four direct competitors (CH2M Hill, PwC, KPMG and Ernst & Young) have all confirmed that they have no objection to your proposed appointment.
• The Committee noted that you had no contractual dealings with Immediate Media during your last two years of service, did not advise on any related contracts, and had no involvement in any decisions or policies that could have affected the company or its competitors.

The Committee sees no reason why you should not take up these commissions, subject to the following conditions:

• a waiting period of nine months from your last day of Crown service.
• for two years from your last day in service you should not work for McKinsey & Company in the UK Defence market.
• for two years from your last day of service you should not provide advice to McKinsey & Company or its clients on the terms of a bid or contract relating directly to the work of the Ministry of Defence;
• you should not draw on any privileged information available to you from your time in Crown service; and
• for two years from your last day in service, you should not become personally involved in lobbying the UK Government on behalf of the organisations to which this advice refers or their subsidiaries or clients.'

Contact, Resources, Notes

Resources

• Review of Acquisition for the Secretary of State for Defence: An independent report by Bernard Gray, October 2009