The Ministry of Defence (MoD) has mastered the art of contract management and "leads the way" in its dealings with outside contractors, a National Audit Office (NAO) report has concluded.
In an analysis glowing with praise, the report described how the MoD, despite being able to take some lessons from leading companies like Toyota, Virgin and BAA, could teach the private sector many aspects of project management.
Although congratulating the MoD the NAO's chairman, Sir John Bourn, warned that the government department needed to concentrate on ensuring greater reliability in the future.
"The MoD is at the forefront in some areas of contract best practice and, when viewed against the constraints under which they work, that is a real achievement," he said.
"However, they must now meet the challenge of ensuring that all of their contract negotiation is consistently at this high level."
In particular the NAO report singled out the MoD's "legal, financial, commercial and negotiation skills," but pointed out that it suffered from a high turnover of staff which damaged project continuity.
"The challenge for the department and its industry partners is to learn from their own good experiences and the success of others and to incorporate those approaches more consistently, appropriate to the specific circumstances of projects so as to motivate both parties to perform effectively," the report concluded.