Three defence contractors are circling for the Defence Support Group as it prepares for privatisation.
Defence minister Peter Luff told parliament that BAE systems, Babcock, and General Dynamics have all made approaches.
BAE and Babcock have already had informal meetings with MoD officials, Luff said. The DSG provides maintenance repairs and replacements of a wide range of military equipment, including small arms, large aircraft and armoured fighting vehicles.
The group was scheduled for privatisation in last year’s Strategic Defence and Security Review.
It employs 3,000 people and operates from 12 sites, generating annual revenue of around £200m.
The government hopes to make over 500 million pounds in the Spending Review period from the sale of a number of defence assets, including DSG, the Marchwood Sea Mounting centre, and the Defence stake in the telecommunications spectrum.
The SDSR proposed £4.3bn of non-front line savings in total.