Recommendations & Conclusions
6 items
4
Recommendation
Twenty-Second - Improving the performan…
Not Addressed
The Department continually fails to learn from its mistakes. The Department has been delivering equipment programmes for decades and has overseen many expensive failures. There have been at least 13 formal reviews of defence procurement policy over the last 35 years which have provided the Department with opportunities to take …
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The Department continually fails to learn from its mistakes. The Department has been delivering equipment programmes for decades and has overseen many expensive failures. There have been at least 13 formal reviews of defence procurement policy over the last 35 years which have provided the Department with opportunities to take stock and learn from experience. We were therefore shocked to learn that the Department had only established a central register of learning from experience (LFE) in December 2020. Experience shows that there is a need for reflection and openness earlier in the process to avoid further catastrophes like Ajax. This does not convince us that the Department aspires to achieve a radical step-change in performance. We are encouraged by the Department’s Strategic Partnering Programme (SPP) initiative launched in 2018 to transform its relationships with industry. We recognise its strategic intent, but are disappointed with its lack of ambition in forecasting only £160 million in savings over the next ten years—less than 0.1% of its forecast Equipment Plan spend. The Department told us that it Improving the performance of major defence equipment contracts 7 expects efficiencies to amount to hundreds of millions of pounds as the programme matures, but until it develops scalable plans and can clearly attribute improvements to its interventions, it is cautious about the scale of potential success. Recommendation: The Department should provide the committee with a clear plan on how it will draw on LFE and how its SPP and associated initiatives will generate the level of savings that would be expected from work that is intended to transform the procurement of hundreds of billions of pounds of equipment.
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Government response AI summary
The government describes existing systems for learning from experience (LfE) and ongoing efforts to standardise LfE information, along with established Strategic Partnering and Category Management Programmes and an Acquisition and Approvals Transformation Programme. However, it does not commit to providing the specific clear plan requested …
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HM Treasury
1
Conclusion
Twenty-Second - Improving the performan…
Not Addressed
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Ministry of Defence (the Department) and Defence Equipment & Support on improving the performance of major equipment contracts.1
Government response AI summary
The government's response is a boilerplate introductory statement confirming it is responding to the Committee's report, without addressing any specific content.
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HM Treasury
8
Conclusion
Twenty-Second - Improving the performan…
Not Addressed
We questioned the Department in detail on the Ajax programme to procure armoured reconnaissance vehicles for the Army. In 2014, the Department agreed a deal with General Dynamics United Kingdom (GDUK) to procure 589 vehicles - down from an initial requirement of 761 vehicles. The Department decided to overlap the …
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We questioned the Department in detail on the Ajax programme to procure armoured reconnaissance vehicles for the Army. In 2014, the Department agreed a deal with General Dynamics United Kingdom (GDUK) to procure 589 vehicles - down from an initial requirement of 761 vehicles. The Department decided to overlap the ‘demonstration’ and ‘manufacture’ stages of the programme in pursuit of savings and a quicker timetable, but this led to a 15-month renegotiation. The resultant baselining of the contract in 2019 included some concessions on capability by the Department. In April 2021, a review by the Infrastructure and Projects Authority raised serious concerns about the Department’s ability to deliver the programme.20 A significant problem facing the programme has been the discovery of noise and vibration issues adversely affecting soldiers’ health during equipment trials. The Department told us that soldiers were first reporting sick with vibration-related symptoms in the middle of 2020, and that anecdotal reports of the issue go back as far as December 2019.21 The Minister for Defence Procurement has since told Parliament that in December 2018 the Army imposed restrictions on the use of the vehicles in relation to vibration and identified that a design upgrade was needed. Although the Department’s analysis is ongoing, it has decided to offer hearing tests to 310 service personnel, while its work to establish any other vibration-related health effects is ongoing.22 Despite the length of time the Department has known about this issue, there is still no definitive information on the source of the noise and vibration.
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Government response AI summary
The government's response is boilerplate text acknowledging its report and listing other relevant reports, but it does not address the Committee's detailed observations and concerns regarding the Ajax programme.
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HM Treasury
9
Conclusion
Twenty-Second - Improving the performan…
The Department had told the NAO that it considered initial operating capability achievable by the end of June 2021, but in our public evidence session, witnesses could not tell us when some sort of capability will be secured, even in broad terms.23 The Department told us it has commissioned an …
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The Department had told the NAO that it considered initial operating capability achievable by the end of June 2021, but in our public evidence session, witnesses could not tell us when some sort of capability will be secured, even in broad terms.23 The Department told us it has commissioned an external review of the Department’s route to full operating capability in 2025 and committed to write to us once it had a clearer understanding on timescales.24 The Minister for Defence Procurement told Parliament that, as at September 2021, it was not possible to set a realistic timescale for the vehicles’ entry into operational service.25
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HM Treasury
13
Recommendation
Twenty-Second - Improving the performan…
Across the 20 projects and programmes examined by the NAO, 14 are being procured partly or wholly non-competitively, despite the fact that ‘competition by default’ has been departmental policy for nearly a decade. In only four of these cases was this due to ‘sovereignty capability’ requirements, whereby the government must …
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Across the 20 projects and programmes examined by the NAO, 14 are being procured partly or wholly non-competitively, despite the fact that ‘competition by default’ has been departmental policy for nearly a decade. In only four of these cases was this due to ‘sovereignty capability’ requirements, whereby the government must source capabilities from specific suppliers due to the need to protect the UK’s national security interests or operational advantage.31 In the absence of competition, there is a risk that the Department will continue to award further contracts to poorly performing suppliers. The Cabinet Office’s recent green paper on public procurement proposes that it should be easier to take into account past supplier performance when awarding future contracts.32 Sharing risks with suppliers
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HM Treasury
16
Conclusion
Twenty-Second - Improving the performan…
The Department has ambitions to improve delivery performance through use of ‘agile’ procurement—delivery methods where the requirement and solutions are developed collaboratively in discrete steps with flexibility around requirements, cost and schedule. However, delivery teams found that agile approaches were incompatible with the Department’s emphasis on certainty of output and …
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The Department has ambitions to improve delivery performance through use of ‘agile’ procurement—delivery methods where the requirement and solutions are developed collaboratively in discrete steps with flexibility around requirements, cost and schedule. However, delivery teams found that agile approaches were incompatible with the Department’s emphasis on certainty of output and cost. Two of the Department’s digital programmes teams—New Style of IT (Deployed) and Morpheus—identified a range of shortcomings in their early adoption of agile approaches. These included learning by trial and error, a lack of shared understanding of what will be delivered, customers’ reluctance to accept trade-offs in capability to improve the speed of delivery, suppliers’ lack of experience with the approach, and difficulties when agile programmes need to join up with programmes being delivered traditionally.40 Learning from experience
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HM Treasury