Military reform: No go, GOCO AS U-TURNS go, it was not particularly painful; defence procurement is hardly a doorstep issue. Still, in terms of the scale of ambition thwarted it was a big one. On December 10th Britain's defence secretary, Philip Hammond, announced that one of the most radical outsourcing plans hatched by any government would not be going ahead. Mr Hammond has been (successfully) trying to restore fiscal probity to the Ministry of Defence, long a pariah in Whitehall for its casual approach to the military equipment budget. He wants to root out the so-called "conspiracy of optimism," in which officials, the armed forces and defence suppliers pretend that kit will be delivered much more cheaply than it in fact can be. After a cost-cutting defence review, Mr Hammond inherited a staggering £74 billion ($122 billion) of unfunded commitments from the last Labour government. At present a 16,500-strong Bristol-based outfit called Defence Equipment & Support (DE&S), staffed mostly by former soldiers and civil servants, handles procurement. Mr Hammond argued that a radically different approach was needed. Responsibility for buying and maintaining Britain's military equipment should be handed to a GOCO, the acronym given to a new government-owned, contractor-operated organisation. In effect, Britain would have privatised defence procurement. In July three American-led consortia had been lined up to bid for the contract. But by last month two had dropped out, fearing it would be impossible to make a decent return. That left just one bidder: a consortium that included Bechtel, PricewaterhouseCoopers and PA Consulting. Sources suggest that, despite having submitted a 1,200-page bid, this consortium too was thinking about pulling out. Without a credible commercial competition, Mr Hammond will revert to allowing a beefed-up DE&S to offer the salaries needed to attract people from the private sector with the kind of commercial, engineering and financial skills needed to handle big projects and negotiate complex contracts. This is unlikely to deliver the kind of "cultural change" that Mr Hammond had insisted was essential. Yet Francis Tusa, the editor of Defence Analysis, a newsletter, and a supporter of GOCO, reckons that for all Mr Hammond's apparent enthusiasm for it, he may not be entirely dismayed by what has happened. Bidders fell by the wayside because of the limited length of contract being offered (as little as three years according to a source) combined with the requirement for substantial upfront investment and the need for every pound of profit to come from savings over the previous system. Surely Mr Hammond could have sweetened the deal if he had really wanted it? The proposed new system was the brainchild of Bernard Gray, a former journalist, political adviser and banker who was hired by the prime minister, David Cameron, to become head of defence materiel in late 2010, before Mr Hammond became defence secretary. Mr Hammond, said by some who have worked with him to be "a bit of a control freak," concurs with much of the bullish Mr Gray's argument for the GOCO. But he was probably not thrilled by having to march in lock-step with him on such a contentious and politically risky policy. Mr Gray has been made chief executive of the rebooted DE&S. Others will be frankly relieved at the GOCO's demise. Its detractors both in Parliament and industry questioned how far a privately-operated entity could be trusted to serve national strategic goals. Even the Pentagon, no slouch when it comes to outsourcing, was worried that the Ministry of Defence might lose capabilities critical for the support of future missions. In 2011 America's Office of Federal Procurement Policy issued a "Policy Letter" warning departments about surrendering to contractors "inherently governmental functions." The Pentagon was singled out for needing caution when it came to reliance on contractors. Mr Hammond says that the GOCO plan is only on hold and could be brought back by a future Conservative government. By the time it is, the politically ambitious defence secretary will surely have moved to another billet.