On 1 April 1991 the Defence Research Agency (DRA) was set up incorporating in one organisation the Royal Aerospace Establishment (RAE), the Admiralty Research Establishment (ARE), the Royal Armament Research and Development Establishment (RARDE), and the Royal Signals and Radar Establishment (RSRE). The DRA was established as an executive Agency of the Ministry of Defence (MOD) under the government's Next Steps Initiative.
Having thus brought together its four non-nuclear research establishments, MOD then brought together various elements concerned with testing and evaluation, creating on 1 April 1992 the Directorate General of Test and Evaluation. DGT&E, the responsibility of the Deputy Under Secretary of State (Defence Procurement), was an amalgamation of various range and test facilities. These included the Proof and Experimental Establishments hitherto under the control of the Master General of the Ordnance (MGO), the Aeroplane and Aircraft Experimental Establishment (A&AEE) at Boscombe Down (which was already under DUS(DP)), DRA Pyestock (previously the National Gas Turbine Establishment (NGTE), RAE Propulsion Department from 1983), and various ranges that had been incorporated into DRA only a year earlier.
Then on 1 April 1995 a further major amalgamation occurred, creating the Defence Evaluation and Research Agency (DERA). DERA incorporated DRA and DGT&E, along with the Chemical and Biological Defence Establishment (CBDE), the Defence Operational Analysis Centre (DOAC), the Centre for Human Sciences (CHS), and the British Underwater Test and Evaluation Centre (BUTEC). DERA's initial structure comprised four operating divisions: CBDE, DRA, CDA (Centre for Defence Analysis), and DTEO (Defence Test and Evaluation Organisation).
In 1998, the Strategic Defence Review recommended a Public Private Partnership (PPP) arrangement as the best means of maximising the strategic value and operational cost effectiveness of the United Kingdom's defence research capabilities. Accordingly, during 2000/2001 DERA was split into two organisations. The business areas to be retained by MOD were grouped as R-DERA (i.e. Retained), while those considered appropriate for operation in a fully commercial environment became New-DERA.
New-DERA was re-structured to facilitate involvement by the private sector and, comprising the greater part of DERA, was re-created as the QinetiQ Group, a wholly government-owned UK plc, in July 2001. R-DERA was meanwhile re-named as the Defence Science and Technology Laboratory (Dstl) and continued as an MOD agency, handling certain areas of research which it had been decided should remain within the public sector.