The Defence Infrastructure Organisation is looking for a private sector business partner to help run procurement and up-keep assets under a contract said to be worth up to £400m.

The MoD hopes long-term partnering with industry will enable DIO to harness private sector expertise to create a world-class professional organisation at the best cost to the taxpayer.

Philip Hammond, defence secretary, said: “Our search for a strategic business partner is expected to extend the capability of the DIO further by allowing it access to private sector skills and innovation.

“This is an example of where the private sector can add significant value in working with the public sector through a long-term strategic partnering arrangement to deliver benefits for both parties.

“In this regard, DIO is at the forefront of a larger Transformation Programme across Defence, as recommended by Lord Levene in his 2011 report.

He said: “If this type of partnering arrangement proves successful, it offers the potential for further use in other parts of Defence in future.

DIO plans to issue the three selected consortia an invitation to negotiate (ITN) in the next few weeks, with a winner due to be selected next summer.

The consortia will be asked to further prove that they can provide the MOD with the right skills and expertise, before the DIO makes a final decision regarding their preferred Strategic Business Partner next summer.

However, a contract will only be awarded if it can be found to provide value for money to the MOD and the taxpayer.