The decision means that Biss Lancaster, which has handled recruitment PR for the MoD since 2004, will cease to work on the account. The new contract is due to commence next September, with full implementation planned for 2012. One source suggested that the consortium's decision was connected to the ongoing public sector cuts and downwards pressure on fees.
It is understood another consortium, G4S Secure Solutions, has also withdrawn. This leaves just the Prospector Group, which includes Fishburn Hedges, and The Capita Group, which includes Hill & Knowlton, still in the running.
The news comes after Defence Secretary Liam Fox announced that some of the most severe cuts to civil service numbers could fall on the MoD. Fox made it clear he wanted resources to go to the front line and not to backroom staff as he tries to find savings of up to 20 per cent.
The RPP is a broad procurement exercise that is seeking to identify a private sector consortium to work alongside the Army on a range of services including IT, customer management, assessment and advertising.
Colonel Andrew Chapman, who is overseeing the RPP, confirmed to Marketing magazine that marketing was being viewed as a 'very small part' of the overall review.
MoD recruiting group PR manager Julie Evans said: 'Biss Lancaster remains our retained national PR agency, as it has been since 2004, producing PRWeek Gold Award winning campaigns, until September 2011.'
Biss Lancaster chairman Graham Lancaster declined to comment, explaining that his firm was not the lead agency in the consortium.
The Mulberry Group would not comment, citing an MoD non-disclosure agreement.