QinetiQ

World ranking: 37
Total Military Sales: $1.0bn
Military sales as % of total sales: 80%
Employees: over 9,500¹
Military products include: battlespace information management,"future concepts"²

QinetiQ, Cody Technology Park, Ively Road, Farnborough, Hampshire GU14 0LX
Tel: + 44 (0) 1252 392000

Carlyle Group (UK), Lansdowne House, 57 Berkeley Square, London W1 6ER
Tel: + 44 (0) 20 7894 1200

Background

QinetiQ was formed in July 2001 from the greater part of the Defence Evaluation and Research Agency (DERA). In December 2002, a US based private equity firm, the Carlyle Group, acquired a 33.8% stake in QinetiQ in a part-privatisation plan. It paid only £42m, despite the fact that the QinetiQ had been valued at £500m.³ It has been claimed that legal and advisory fees cost UK tax-payers double the Carlyle payment. ⁴

What it does
QinetiQ is involved in research and development. The company states that 'in the future [it] will be ideally placed to conduct research and develop solutions for armed forces around the
globe.' ⁵ QinetiQ says it has expertise in: battle-space information; communications; electronic warfare; guidance and control; materials; platforms; propulsion and powerplants; sensors and weapons. Despite the company's civilian applications, the UK MoD remains QinetiQ's largest customer.

Some examples of its work include: developing a phased-array missile seeker, designed to steer a missile's energy electronically; ⁶ completing a New-Generation Operations Support and Software architecture demonstration for the UK MoD; ⁷ 'pioneering' a new flight control system which has been accepted for the Lockheed Martin Joint Strike Fighter. ⁸ QinetiQ is also heavily involved with Ballistic Missile Defence and is one of the UK companies launching the new, 'virtual', UK Missile Defence Centre.

The Carlyle Group

The Carlyle Group, established in 1987, is one of the world's largest venture capital groups. It is the 11th largest US military contractor although the military sector makes up only 7% of its investments. ⁹ The group has nearly 300 investment professionals operating out of offices in 12 countries to uncover 'superior opportunities' in North America, Europe and Asia.¹⁰

Former US Defense Secretary Frank Carlucci chairs the Carlyle Group. Other notable people involved with Carlyle are: former UK Prime Minister John Major as Carlyle Europe Chairperson; former US President George Bush Senior as Carlyle Senior Advisor; and former US Secretary of State James Baker as Carlyle Senior Counsellor. ¹¹ It is clearly an organisation based on contacts and influence.

Part of QinetiQ's role is to provide independent advice to the MoD about military procurement. As such, there should be concern that its independence could be compromised by Carlyle's extensive military interests. ¹²

References

Unless otherwise indicated, world ranking (by military sales), military sales and military sales percentage are sourced from Defense News (21.7.03) and refer to 2002

1 education.guardian.co.uk/Print/0,3858,4561991,00.html, accessed 15.08.03
2 www.qinetiq.com/markets/defence.html, accessed 15.08.03
3 The Independent, 'MoD research arm valued at £500m in cut-price Carlyle sale', 6.12.02
4 Private Eye, 'Commons Assault', 21.2.03
5 www.qinetiq.com/technologies/military.html, accessed 27.08.03
6 Flight International, 'UK's QinetiQ moves on with seeker sensor tests', 20- 26.5.03
7 Jane's Defence International, 'QinetiQ architecture double bonus', July 2003
8 www.qinetiq.com/casestudies/2002/flying_high.html, accessed 27.8.03
9 www.corporatewatch.org/newsletter/issue11/isue11_part1.htm, accessed 27.8.03
10 www.thecarlylegroup.com/eng/company/index.html, accessed 27.8.03
11 www.hereinreality.com/carlyle.html accessed 15.8.03
12 The Observer, 'MoD allows Carlyle Deal with Strings', 15.9.02

Company Websites (including subsidiaries & joint ventures)

QinetiQ

[Published: September 2003]