THE Ministry of Defence is to fully outsource its 10,000-strong non-operational 'white fleet' with the potential £1 billion-plus 10-year contracts to be awarded next year. The MoD's fleet - which excludes the 2,800 RAF 'white fleet' vehicles already outsourced to Lex Vehicle Leasing - will be broken down into five separate contracts on a regional basis - Scotland, central Britain, London, the south and south west.

The MoD said the first three contracts - for Scotland, central Britain and London - were expected to be signed early next summer with the contract for the south following three months later and the south west contract following before the end of 1999. The decade-long contracts covering cars, vans, minibuses, coaches and commercial vehicles used by the Army, Navy and RAF will be some of the most valuable awarded in the fleet arena, with some sources indicating the total value of the contracts at more than £1 billion.

The contracts are potentially some of the most lucrative to be drawn up in the history of the UK fleet market and will turn the MoD's fleet into one of the most efficient in Britain as it turns to the private sector under the Government's Private Finance Initiative. Among those in the running for the contracts are Fleetserv - a new company formed by the consortium of PHH Vehicle Management, Arriva Plc and Ryder and advised by Schroders - GE Capital Fleet Services, which has joined forces with sister company TLS Vehicle Rental, and Lex Vehicle Leasing.